The federal government spends over $650 billion annually on contracts with private businesses. That’s not grants—that’s actual procurement of goods and services that federal agencies need to operate.
From office supplies to IT services, construction to consulting, janitorial services to advanced manufacturing, the government buys from businesses of all sizes. Small businesses receive over $150 billion of this spending through set-asides and preferences designed to help them compete.
This sounds like opportunity. And it is—for businesses that understand the process, have realistic expectations, and are willing to navigate the bureaucracy.
But most businesses that try to break into government contracting fail or give up. Not because they’re not qualified, but because they approach it wrong. They think it’s like commercial work with bigger checks. It’s not.
Here’s the real process for getting your first government contract—the registration requirements, where to find opportunities, why your first contract will probably be a subcontract, and the timeline you should actually expect.
The Registration Gauntlet You Must Complete First
Before you can even bid on federal contracts, you need to complete several registrations. This isn’t a formality—it’s a mandatory barrier to entry that takes weeks to complete.
Step 1: Get a DUNS Number (Now UEI). The Data Universal Numbering System (DUNS) number is being replaced by the Unique Entity Identifier (UEI) through SAM.gov, but the concept is the same: you need a unique identifier for your business.
- Free to obtain
- Apply through SAM.gov
- Instant or takes 1-2 business days
Step 2: Register in SAM.gov (System for Award Management). This is the central database of businesses that want to contract with the federal government. Without active SAM registration, you cannot receive a federal contract.
Requirements:
- Complete business information
- Tax identification details
- Banking information for electronic payments
- NAICS codes (North American Industry Classification System—what your business does)
- FSC/PSC codes (Federal/Product Service Codes—what you sell to the government)
- Representations and certifications (dozens of questions about your business)
Timeline: Plan for this to take 10-15 business days to fully activate. The initial registration is faster, but full validation takes time.
Cost: Free, but you may encounter scam websites charging for “registration assistance.” Don’t pay. SAM.gov registration is always free.
Step 3: Register for Login.gov. This is the authentication system for accessing federal contracting websites including SAM.gov and beta.SAM.gov. You need multi-factor authentication set up.
Step 4: Determine Your Small Business Certifications. Several programs provide competitive advantages to small businesses:
- Small Business (SB): Most businesses with under 500 employees qualify, though standards vary by industry
- 8(a) Business Development: For socially and economically disadvantaged small businesses (mostly minority-owned)
- HUBZone: For businesses in Historically Underutilized Business Zones
- Woman-Owned Small Business (WOSB): Self-certification for woman-owned businesses
- Service-Disabled Veteran-Owned (SDVOSB): For veterans with service-connected disabilities
- Veteran-Owned Small Business (VOSB): For veteran-owned businesses
Each certification has specific eligibility requirements and provides access to set-aside contracts. Research which apply to you and complete certifications through certify.sba.gov.
Step 5: Create Capability Statements. A capability statement is a one-page document (front and back) that summarizes:
- What your business does
- Your past performance and experience
- Your certifications and qualifications
- Your NAICS and PSC codes
- Your contact information and unique identifiers (CAGE code, DUNS/UEI)
This is your marketing document in government contracting. You’ll send it to contracting officers, prime contractors, and include it with bids.
Where to Actually Find Opportunities
Once registered, you need to find opportunities you can actually bid on.
SAM.gov Contract Opportunities (formerly FedBizOpps). This is the primary public database of federal contracting opportunities. Search by:
- NAICS codes
- Keywords
- Set-aside type (small business, 8(a), WOSB, etc.)
- Agency
- Place of performance
Filter aggressively. You’ll see thousands of opportunities, most of which aren’t relevant to you.
Agency-Specific Portals. Many agencies have their own procurement systems:
- GSA eBuy (for GSA Schedule holders)
- VA’s Acquisition Forecast
- DOD’s procurement websites
- Individual agency forecast pages
Subcontracting Databases. Large prime contractors are required to meet small business subcontracting goals. They actively seek small business partners. Find them through:
- Dynamic Small Business Search (DSBS) at dsbs.sba.gov
- Agency matchmaking events
- Prime contractor websites and small business liaison offices
Networking and Relationships. Unlike commercial sales where you can win business purely on merit, government contracting is heavily relationship-driven. Attend:
- Industry days (agencies host events to meet potential contractors)
- Small business conferences
- Agency small business office hours
- Matchmaking events
- Local Procurement Technical Assistance Centers (PTACs)
The businesses that win consistently in government contracting invest heavily in relationship building.
Why Your First Contract Will Probably Be a Subcontract
Here’s the reality most beginners don’t understand: winning a prime contract (direct contract with the government) as a brand-new contractor with no past performance is extremely difficult.
Past performance is king. Federal contracting heavily weighs past performance. If you’ve never performed on a government contract, you start with a massive disadvantage against businesses that have track records.
Bonding and financial capacity requirements. Many contracts require performance bonds, payment bonds, or proof of financial capacity. New businesses often can’t meet these requirements.
Complexity of prime contracts. Prime contracts come with compliance burdens, reporting requirements, and administrative overhead that overwhelm inexperienced contractors.
The subcontracting path is easier and smarter:
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Build past performance. Subcontracts count as government contracting experience. After 1-2 successful subcontracts, you have the track record to bid on primes.
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Learn the system. Working under a prime contractor teaches you the compliance requirements, reporting systems, and nuances of federal work without bearing full responsibility.
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Lower risk. If you screw up as a subcontractor, the prime absorbs some of that risk. If you screw up as a prime, you’re fully liable.
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Access to larger opportunities. Prime contractors need small business partners to meet their subcontracting goals. They actively recruit you.
How to find subcontracting opportunities:
- Register in DSBS and mark yourself available for subcontracting
- Identify prime contractors who win contracts in your area (check USAspending.gov to see who’s winning)
- Reach out with your capability statement
- Attend industry events where primes are looking for small business partners
- Join industry associations where prime-sub relationships form
Plan to do 1-3 subcontracts before seriously pursuing prime contracts. This builds credibility and knowledge.
The Realistic Timeline for Your First Contract
Government contracting is slow. Painfully slow. Adjust your expectations.
Month 1-2: Registration and setup. Complete SAM.gov, certifications, and capability statements.
Month 2-4: Market research and relationship building. Identify target agencies and opportunities. Attend industry days. Connect with contracting officers and primes. Learn who’s buying what.
Month 4-8: Subcontract pursuit. Actively market to prime contractors. Respond to teaming requests. Get included on bids as a subcontractor.
Month 8-12: First subcontract award. If you’ve been active and built relationships, you might land your first subcontract within the first year. Could be sooner, could be longer.
Month 12-24: Build track record. Perform excellently on your subcontracts. Build relationships. Gather testimonials and performance documentation.
Month 24+: Pursue prime contracts. With past performance established, you can compete for small prime contracts with realistic chances of winning.
This is a 2-3 year process, not a quick win. Businesses that treat government contracting as a strategic long-term initiative succeed. Those looking for fast revenue usually fail.
The Types of Contracts Best for Beginners
Not all government contracts are created equal. Some are far more accessible to new contractors than others.
Micro-purchases ($10,000 or less). Small purchases can sometimes be made without formal competition. These are easy entry points but won’t generate meaningful revenue.
Simplified acquisitions ($10,000-$250,000). These have less stringent requirements and faster timelines. Good for building experience.
Small business set-asides. Contracts reserved exclusively for small businesses. You’re competing against similarly-sized firms, not large corporations.
Services contracts over goods. Service contracts (consulting, maintenance, professional services) are often more accessible than complex product/manufacturing contracts.
Local and regional opportunities. Contracts with place-of-performance in your area reduce logistical complexity and let you leverage local relationships.
Avoid as a beginner:
- Contracts requiring extensive bonding
- Highly technical or specialized requirements you can’t meet
- Contracts with short response times if you’re unfamiliar with the process
- IDIQs (Indefinite Delivery Indefinite Quantity) contracts that require extensive past performance
The Compliance Reality You Must Accept
Government contracting comes with compliance requirements that don’t exist in commercial work.
You must:
- Follow Federal Acquisition Regulation (FAR) requirements
- Maintain specific insurance (often higher limits than commercial work)
- Track labor hours and costs meticulously
- Allow government audits of your books
- Comply with socioeconomic requirements (hire veterans, small businesses, etc.)
- Report subcontracting plans and achievements
- Follow wage determination requirements (Davis-Bacon, Service Contract Act)
- Maintain cybersecurity standards (CMMC for DOD work, NIST 800-171)
- Register in additional systems (PIEE, WAWF, others depending on agency)
This administrative burden is real and costs money. Budget 10-20% of contract value for compliance and administrative overhead on your first contracts.
The Pricing Reality: Government Work Doesn’t Always Pay More
There’s a myth that government contracts pay better than commercial work. Sometimes true, often not.
Reality:
- Government contracting is price-competitive. Low bidder often wins on commoditized services.
- Margins can be thin, especially on larger contracts with experienced competition.
- Payment terms are better (usually 30 days) than commercial (often 60-90 days).
- But the compliance costs eat into margins.
Don’t pursue government contracting solely because you think it pays better. Pursue it because:
- It provides steady, reliable work
- It builds credibility and reputation
- It diversifies your customer base
- It opens doors to larger opportunities
- The mission aligns with your values (serving the public)
If your only motivation is money, commercial work might be more profitable with less hassle.
How to Actually Win: The Proposal Fundamentals
When you bid on a contract, your proposal needs to address three core elements:
Technical approach: How will you perform the work? What’s your methodology? Why is your approach sound?
Past performance: What relevant experience do you have? Provide references, contract examples, and testimonials. (This is where subcontracts help.)
Price: What will it cost? Break down labor, materials, overhead, and profit. Be competitive but realistic.
Government contracting officers evaluate proposals based on these criteria, weighted differently depending on the solicitation.
Key principles:
- Follow the instructions exactly. RFPs are detailed. Do exactly what they ask, in the order they ask, with the format they specify.
- Answer every question. If the RFP asks 30 questions, answer all 30. Missing one can disqualify you.
- Be specific, not vague. “We will provide excellent service” is worthless. “We will respond to all service requests within 4 hours and resolve 95% within 24 hours” is specific.
- Demonstrate understanding. Show that you understand the agency’s mission, challenges, and requirements.
The Support Resources You Should Use
You don’t have to figure this out alone. Free and low-cost resources exist to help small businesses navigate government contracting.
Procurement Technical Assistance Centers (PTACs). These are government-funded centers that provide free or low-cost counseling on government contracting. They offer:
- Registration assistance
- Opportunity identification
- Proposal reviews
- Training and workshops
Find your local PTAC at aptac-us.org. Use them. They’re underutilized and incredibly valuable.
Small Business Development Centers (SBDCs). Provide business counseling including government contracting guidance. Free.
Agency Small Business Offices. Every federal agency has a small business office charged with helping small businesses access opportunities. They host events, provide guidance, and can connect you with contracting officers.
Mentor-Protégé Programs. SBA and individual agencies run programs where established contractors mentor small businesses. These relationships provide training, teaming opportunities, and credibility.
The Bottom Line
Getting your first government contract is a marathon, not a sprint. It requires:
- Completing registrations (2-4 weeks)
- Building relationships (3-12 months)
- Starting with subcontracts (6-18 months)
- Performing excellently and building track record (12-24 months)
- Pursuing prime contracts (24+ months)
This is a 2-3 year journey from “I want to do government contracting” to “I have a steady pipeline of federal work.”
Businesses that succeed treat government contracting as a strategic business development initiative with dedicated resources and long-term commitment.
Businesses that fail treat it as a side hustle they can dabble in when commercial work is slow.
If you’re willing to invest the time, navigate the bureaucracy, and build relationships, government contracting can provide stable, high-volume work that scales your business.
If you want quick revenue or aren’t willing to learn a new system, stick with commercial clients.
The opportunity is real. The process is accessible. The timeline is longer than you think. Plan accordingly.
