The federal government spends over $700 billion every year buying goods and services from private businesses. A big chunk of that money is legally set aside for small businesses. Yet most small business owners have no idea how to get a piece of it.
If you run a legitimate business, you can bid for government contracts. You do not need political connections, a lobbyist, or an enterprise-level operation. You just need to know how the system works and put in the effort to show up properly.
This guide breaks it down in plain English.
Why Government Contracting Is Worth Your Attention
Government contracts are stable, often recurring, and pay reliably. Unlike chasing private clients, a federal or state contract can lock in predictable revenue for one to five years. Many contracts get renewed automatically if you perform well.
The federal government has a goal of awarding at least 23% of all prime contract dollars to small businesses each year. There are also specific carve-outs for businesses owned by women, veterans, service-disabled veterans, and people in underutilized areas. If you qualify for any of those categories, your odds get better fast.
Beyond federal contracts, state and local governments buy constantly too. City hall needs IT support. The county needs landscaping services. The school district needs catering. If you provide a service or product that a government agency could use, there is a contract out there with your name on it.
Step 1: Get Your Business Registered Properly
Before you can bid on federal contracts, you need to be registered in the System for Award Management (SAM.gov). This is the federal government’s official vendor database, and it is free to register. You will need your Employer Identification Number (EIN), your business bank account information, and a NAICS code that describes what your business does.
NAICS codes are the federal classification system for industries. Every type of business has one. Look yours up on the SBA’s contracting guide to make sure you use the right one. Using the wrong code means your bids land in the wrong category.
SAM registration needs to be renewed annually. Set a reminder so it does not lapse. An expired SAM registration means you cannot receive contract awards, even if you win a bid.
Step 2: Understand the Small Business Set-Aside Programs
The federal government runs several formal programs that give small businesses a competitive edge:
- 8(a) Business Development Program: For businesses owned by socially and economically disadvantaged individuals. Provides mentorship, access to sole-source contracts, and set-aside competition for up to nine years.
- HUBZone Program: For businesses located in historically underutilized business zones. Provides a 10% price evaluation preference in full-and-open competition and access to set-aside contracts.
- Women-Owned Small Business (WOSB) Program: For businesses at least 51% owned and controlled by women. Opens up set-asides in specific industries where women are underrepresented.
- Service-Disabled Veteran-Owned Small Business (SDVOSB): For businesses owned by veterans with a service-connected disability. One of the most favorable designations in federal contracting.
- Small Disadvantaged Business (SDB): A broader designation that affects evaluation in some contracts and contributes toward agency goals.
You apply for most of these through SAM.gov or specific SBA portals. Research which ones you qualify for before you start bidding.
Step 3: Find Contracts to Bid On
All federal contract opportunities above $25,000 are posted on SAM.gov. You can search by keyword, NAICS code, agency, and location. Set up saved searches and email alerts so new opportunities hit your inbox.
For contracts under $25,000, agencies often use simplified purchasing procedures and may contact vendors directly from vendor lists. Getting on those lists requires outreach, which we will cover below.
Also check:
- USASpending.gov: Shows you what agencies have spent money on in the past. This tells you where the demand is before you even start bidding.
- State procurement portals: Every state has its own vendor registration and bid announcement system. Look up your state’s purchasing office.
- Local government websites: City and county governments often post RFPs (requests for proposal) on their own sites rather than central portals.
Step 4: Learn How to Read and Respond to an RFP
A Request for Proposal (RFP) is the government’s formal ask for bids. It lays out what they need, the timeline, the budget range (sometimes), evaluation criteria, and submission requirements. Reading one for the first time feels like reading a legal document written by a committee, because it basically is.
Here is how to approach it:
- Read the Statement of Work (SOW) first. This is the heart of the RFP. It tells you exactly what the government wants done. If you cannot do the SOW, stop reading.
- Note the evaluation factors. Most RFPs tell you how they will score submissions. Often it is a mix of technical approach, past performance, and price. Price is almost never the only factor.
- Look for small business preferences. Some RFPs are set-asides, meaning only qualifying small businesses can bid. Others are open competition but award preference points to small businesses.
- Ask questions. Almost every RFP includes a question-and-answer period. Use it. Contracting officers appreciate engaged bidders and often clarify things that change your whole approach.
When writing your proposal, be specific and mirror the language of the RFP. Agencies want to see that you actually read their document. Vague proposals get scored low even when the company behind them is perfectly capable. Think of your proposal the same way you would write a winning business proposal for a private client — it has to speak directly to what they care about.
Step 5: Build Past Performance Before You Bid Big
Past performance is one of the most heavily weighted factors in government contracting. Agencies want to see that you have done this before and done it well. If you are brand new, you do not have past performance. That is a real obstacle, but it is not a wall.
Here is how to build it from zero:
- Start with subcontracting. Larger prime contractors are required to give small businesses subcontracting opportunities on many federal contracts. Find primes in your industry and approach them. Doing solid work as a sub gets your name into the government system with a performance record attached.
- Target smaller contracts first. Micro-purchases (under $10,000) and simplified acquisitions (under $250,000) have less rigorous past performance requirements. Win a few of those and use them as references.
- Lean on private-sector work. Government evaluators will consider relevant commercial experience as a stand-in for past performance when you are new to contracting. Highlight it specifically.
Step 6: Get In Front of Contracting Officers Before the RFP Drops
The best government contractors do not just respond to RFPs. They build relationships before the solicitation ever gets published. Agencies do market research before they write an RFP, and businesses that have already introduced themselves have a head start.
How to make those connections:
- Attend agency small business events. Most federal agencies have a small business office and host outreach events, vendor days, and matchmaking sessions. These are specifically designed to connect contracting officers with potential vendors.
- Contact the agency’s OSDBU. The Office of Small and Disadvantaged Business Utilization exists at most agencies to help small businesses get into the contracting pipeline. Reach out directly.
- Use LinkedIn and industry associations. Government acquisition professionals attend the same conferences as private-sector folks. Showing up in the right rooms matters, just like it does when you are sizing up your competition in any other market.
Use Your Resources
You do not have to figure this out alone. The SBA has a dedicated contracting division with free resources, training, and counselors. Procurement Technical Assistance Centers (PTACs) are federally funded offices located in most states that provide free one-on-one help to businesses trying to win government contracts. They will review your proposals, help you register, and coach you through your first few bids at no cost.
You might also consider getting outside help with proposal writing if the contracts you are pursuing are large. Experienced proposal writers know the formats, the language, and the evaluation tricks that can separate a winning bid from a losing one. Platforms like Fiverr connect you with freelance proposal writers and government contracting specialists who can sharpen your submissions without the overhead of a full-time hire.
And consider putting together a formal advisory board that includes someone with government contracting experience. Having even one advisor who has navigated this world before can save you months of trial and error. Learn how to build a business advisory board that actually moves the needle.
The Long Game
Most small businesses do not win their first bid. Or their second. Government contracting is a long game. The businesses that succeed are the ones who treat every proposal as a learning experience, debrief with the contracting officer after a loss, and come back stronger next time. Debriefs are your right by law. Request them. The feedback is often remarkably direct.
The upside once you break through is significant. A single five-year contract with a federal agency can transform your revenue baseline. Many small businesses have built everything around reliable government income, using it as the foundation that lets them take risks and grow in other areas.
The government is not some impenetrable institution. It is a massive buyer that is legally required to give small businesses a fair shot. Your job is to show up prepared.
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