Getting Started with Government Contracts

Government contracting is one of the most overlooked revenue streams for small and mid-size businesses. The U.S. federal government alone spends over $700 billion annually on contracts, and state and local governments add hundreds of billions more. Unlike private-sector deals that can fall through without warning, government contracts come with legally binding payment terms and predictable timelines. If you have never pursued a government contract before, this guide walks you through every step from registration to your first proposal.

Why Government Contracting?

There are a few compelling reasons why businesses of all sizes should consider government contracts as part of their revenue strategy.

Stable, recession-resistant revenue. Government agencies have budgets that are allocated years in advance. Even during economic downturns, most agencies continue spending on essential services. While private-sector clients may cut budgets or delay projects, government contracts provide a steady pipeline of work.

Guaranteed payment. The federal government is legally required to pay its contractors. The Prompt Payment Act mandates that agencies pay invoices within 30 days or owe interest. State and local governments have similar statutes. You will never chase an unpaid invoice the way you might with a private client.

Large contract values. Many government contracts are substantial, often ranging from tens of thousands to millions of dollars. Even small, simplified acquisitions (under $250,000 at the federal level) represent meaningful revenue for a growing business.

Small business preferences. The federal government sets annual goals to award at least 23% of prime contract dollars to small businesses. Many agencies have dedicated offices focused on helping small businesses compete. Certifications like 8(a), HUBZone, Women-Owned Small Business (WOSB), and Service-Disabled Veteran-Owned Small Business (SDVOSB) unlock set-aside contracts where only certified firms can compete, drastically reducing your competition.

Long-term relationships. Once you successfully deliver on a government contract, you build past performance references that make it easier to win future work. Many agencies prefer to continue working with proven vendors, and contract vehicles like IDIQs (Indefinite Delivery, Indefinite Quantity) can provide years of ongoing task orders.

Who Can Bid?

Almost any legally registered business can bid on government contracts. There is no minimum size requirement. Sole proprietors, LLCs, S-corps, and C-corps are all eligible. You do not need prior government experience to submit your first bid, though having relevant commercial experience in your field is important.

The main requirements are straightforward: you need a legal business entity, a tax identification number (EIN), and registration in the System for Award Management (SAM.gov) for federal work. State and local contracts may have their own registration portals, but the barrier to entry is generally low.

Some contracts require specific certifications, security clearances, or bonding (especially in construction). But the vast majority of government work, from IT services to janitorial contracts to office supplies, is open to any qualified business that meets the solicitation requirements.

Step 1: Get Your Unique Entity Identifier (UEI)

Before you can register on SAM.gov or bid on any federal contract, you need a Unique Entity Identifier (UEI). The UEI replaced the DUNS number in April 2022 as the standard identifier for entities doing business with the federal government.

The good news is that the UEI is now assigned directly through SAM.gov during registration, at no cost. You no longer need to go through a third-party provider. When you begin your SAM.gov registration, the system will either assign you a new UEI or allow you to validate an existing one.

What you will need: Your legal business name, physical address, EIN (tax ID number), and information about your business structure. Have these ready before you start the registration process to avoid delays.

Step 2: Register on SAM.gov

The System for Award Management (SAM.gov) is the official government portal where all entities that do business with the federal government must register. Registration is free and mandatory. Without an active SAM.gov registration, you cannot be awarded a federal contract.

The registration process takes about 30-60 minutes to complete, but validation can take 7-10 business days (sometimes longer during peak periods). Plan ahead and do not wait until you find a contract to start registering.

During registration, you will:

• Provide your business details (name, address, EIN, structure)
• Receive or validate your UEI number
• Select your NAICS codes (North American Industry Classification System) which describe the types of work you perform
• Select your PSC codes (Product and Service Codes) for the specific products or services you offer
• Identify your business size based on SBA standards for your NAICS codes
• Complete representations and certifications
• Designate an Electronic Business Point of Contact (EB POC)

Important: Your SAM.gov registration must be renewed annually. Set a calendar reminder 60 days before expiration. An expired registration means you cannot receive contract awards or payments.

Step 3: Research Opportunities

This is where many businesses struggle. Government procurement opportunities are published across hundreds of different websites. Federal opportunities appear on SAM.gov (formerly FBO.gov), but state, county, and city contracts are scattered across individual agency portals, third-party platforms like BidSync, Bonfire, PlanetBids, and PublicPurchase, and sometimes buried in local newspaper legal notices.

Manually checking all of these sources is not realistic for most businesses. This is exactly the problem that ProcureTap solves. We aggregate procurement bids from over 290 government sources into a single searchable database, updated every six hours. Instead of checking dozens of websites daily, you search once and find every relevant opportunity across federal, state, and local agencies.

When evaluating an opportunity, consider:

• Scope of work: Does this match your capabilities and experience?
• Contract value: Is it worth the effort to prepare a proposal?
• Set-aside status: Is it restricted to certain business types?
• Due date: Do you have enough time to prepare a competitive response?
• Location: Can you perform the work where it is required?
• Evaluation criteria: What matters most to this agency, price, technical approach, or past performance?

A common mistake is bidding on everything. Be selective. A well-crafted proposal for a contract you are genuinely qualified for will always beat a hastily written response to a contract that is a stretch.

Step 4: Understand the Solicitation Document

The solicitation document (whether it is an RFP, RFQ, or IFB) is the single most important thing you will read during the bidding process. Every requirement, every deadline, and every evaluation criterion is spelled out in this document. Proposal evaluators will score your response against exactly what is written here.

Key sections to focus on:

• Statement of Work / Performance Work Statement: Describes exactly what the agency needs. Read it three times.
• Instructions to Offerors: Tells you exactly how to format and submit your proposal. Follow these to the letter.
• Evaluation Criteria (Section M): Reveals how proposals will be scored. This is your roadmap, structure your proposal to address each criterion directly.
• Clauses and provisions: Legal requirements you must comply with. Pay attention to clauses about insurance, bonding, certifications, and labor standards.
• Questions period: Most solicitations have a period where you can submit written questions. Use it. Clarify anything ambiguous. The answers are shared with all bidders, so your questions also reveal what competitors are thinking about.

Step 5: Write Your Proposal

Your proposal is your sales pitch, but it is one governed by strict rules. Unlike a commercial sales presentation where you can freestyle, a government proposal must follow the exact format and content requirements specified in the solicitation.

Structure your proposal to match the evaluation criteria. If the solicitation says proposals will be evaluated on (1) Technical Approach, (2) Past Performance, and (3) Price, your proposal should address those areas in that order, with the most effort devoted to the highest-weighted factor.

Be specific and concrete. Instead of saying "we have extensive experience," write "we completed 14 similar projects for [agency name] between 2021 and 2024, with an average customer satisfaction rating of 4.8/5.0." Evaluators are looking for evidence, not claims.

Do not assume the evaluator knows your company. Write as though the reader has never heard of you. Spell out your qualifications, your approach, and why your solution meets their needs, every single time.

Step 6: Submit and Follow Up

Submit your proposal before the deadline, no exceptions. Late proposals are almost always rejected without review, regardless of quality. Build in a buffer of at least 24 hours to account for technical issues with submission portals.

After submission, you may have opportunities to provide clarifications or participate in discussions (for negotiated procurements). Respond promptly and completely to any requests from the contracting officer.

If you do not win, request a debrief. Federal agencies are required to provide debriefs to unsuccessful offerors who request them. A debrief tells you how your proposal scored, where you were strong, and where you fell short. This feedback is invaluable for improving your next proposal.

Common Mistakes to Avoid

• Waiting until the last minute to register on SAM.gov. Registration takes days to weeks. Start now, even if you are not ready to bid yet.
• Bidding on contracts outside your expertise. Agencies want specialists, not generalists. Focus on what you do best.
• Ignoring page limits and formatting requirements. If the solicitation says 25 pages, single-spaced, 12-point font, anything beyond those limits may be discarded unread.
• Copy-pasting boilerplate from old proposals. Evaluators can tell when a proposal is generic. Tailor every response to the specific solicitation.
• Underpricing to win. The lowest price does not always win, and pricing too low suggests you do not understand the scope. Price realistically based on the work required.
• Not attending pre-bid conferences. These meetings offer valuable insights into what the agency really wants. Attend every one you can.
• Failing to ask questions during the Q&A period. If anything in the solicitation is unclear, ask. Guessing wrong can cost you the contract.
• Giving up after one loss. Most companies do not win their first bid. Government contracting is a long game. Each proposal you write makes you better at the next one.