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Winning Government Contracts for Small Businesses

government contracts for small businesses

Government contracts offer a lucrative opportunity for small businesses to secure stable revenue streams and establish themselves in the market. As the largest customer in the world, the U.S. government is obligated to consider buying from small businesses to prevent monopolization and promote economic growth.

Small businesses can take advantage of several programs and resources to navigate the complex landscape of government contracting. The Small Business Administration (SBA) provides assistance and support, helping businesses understand the requirements and bidding process.

In this comprehensive guide, we will explore the benefits of government contracting for small businesses, how to qualify for contracts, different types of contracts available, and strategies to increase the chances of winning contracts. We will also discuss subcontracting and teaming opportunities, as well as the potential for government contracting in Canada.

Key Takeaways:

  • Government contracts are a significant financial opportunity for small businesses.
  • Small businesses can benefit from set-aside contracts exclusively reserved for them.
  • The Small Business Administration (SBA) provides resources and assistance to small businesses pursuing government contracts.
  • Small businesses must meet basic eligibility requirements and comply with regulations to qualify for government contracts.
  • Types of government contracts for small businesses include set-aside contracts, sole-source contracts, and subcontracting opportunities.

Benefits of Government Contracting for Small Businesses

Winning government contracts provides several significant benefits for small businesses. By securing government contracts, small businesses can tap into a lucrative financial opportunity. The government is the largest buyer of goods and services in the world, offering small businesses a vast market to supply their products or services to.

A key advantage of government contracting is the potential for a reliable source of income. Once a small business successfully secures a government contract, it can often lead to continued orders and a stable revenue stream. This provides small businesses with the financial stability they need to grow and expand their operations.

In addition to the financial benefits, government contracts also level the playing field for small businesses. By creating opportunities exclusively for small businesses, the government helps prevent larger competitors from dominating the market. This fosters fair competition and encourages diversity and innovation.

Furthermore, government contracts offer opportunities for disadvantaged socio-economic groups. Small businesses owned by minorities, women, veterans, and other underrepresented groups can take advantage of government preference programs that provide additional support and assistance in securing contracts.

g is a valuable avenue for small businesses to explore. It not only presents financial opportunities and stability but also promotes fair competition and provides support for small businesses from various socio-economic backgrounds.

Benefits of Government Contracting for Small Businesses
Financial opportunity as the largest buyer of goods and services
Reliable source of income with continued orders
Prevents larger competitors from dominating the market
Opportunities for disadvantaged socio-economic groups

How to Qualify for Government Contracts

Small businesses seeking government contracts must first determine their eligibility by evaluating specific requirements. The Small Business Administration (SBA) plays a critical role in helping small businesses assess their eligibility and navigate the government contracting process. To qualify for government contracts, small businesses must meet basic criteria, including adherence to size standards determined by the SBA. Compliance with government regulations that govern the procurement process is also essential.

Here are the key steps to qualifying for government contracts:

  1. Determine eligibility based on size standards established by the SBA.
  2. Ensure compliance with government regulations governing government contracting.
  3. Register with the System for Award Management (SAM) to participate in government contracting opportunities.
  4. Review and understand the specific requirements outlined in the solicitation.
  5. Obtain any necessary licenses, permits, and insurance required for the contract.
  6. Seek assistance from the SBA and other resources to navigate the qualification process.

The SBA provides valuable guidance and resources to help small businesses understand the eligibility criteria and requirements for government contracts. Small businesses should consult the SBA’s website or reach out to their local SBA office for personalized assistance.

Types of Government Contracts for Small Businesses

Small businesses have the opportunity to win various types of government contracts that can provide them with valuable revenue and growth opportunities. Here are the different types of contracts available:

1. Set-Aside Contracts

Set-aside contracts are exclusively reserved for small businesses. These contracts can be specific tasks or entire contracts set aside for small businesses to compete for. Set-aside contracts are designed to promote economic development, job creation, and support the growth of small businesses in government contracting.

2. Sole-Source Contracts

Sole-source contracts are awarded directly to one specific small business without a competitive bidding process. These contracts are typically awarded when only one small business is capable of fulfilling the requirements due to their unique expertise, resources, or qualifications. Small businesses awarded sole-source contracts have a significant advantage in securing government business.

3. Subcontracting on Federal Prime Contracts

Small businesses can also participate in subcontracting on federal prime contracts. Prime contracts are contracts that are directly awarded by the government to larger contractors. Subcontracting allows small businesses to work as suppliers or service providers for prime contractors. This provides small businesses with opportunities to gain experience and build relationships with larger contractors, expanding their capabilities and improving their chances of winning future prime contracts.

By understanding the different types of government contracts available, small businesses can strategically position themselves to take advantage of government contracting opportunities and grow their business.

How to Win Government Contracts for Small Businesses

To increase the chances of winning government contracts, small businesses should follow several key strategies:

  1. Thoroughly research the federal marketplace: Small businesses should take the time to understand the needs and requirements of government agencies. By researching the federal marketplace, businesses can identify opportunities that align with their capabilities and expertise.
  2. Utilize resources provided by the SBA: The Small Business Administration (SBA) offers various resources and programs to assist small businesses in government contracting. These resources can provide valuable guidance and support throughout the contracting process.
  3. Learn from successful contractors: Studying the strategies and best practices of successful government contractors can provide insights and tips for winning contracts. Small businesses can attend networking events and conferences to learn from experienced professionals.
  4. Develop a strong proposal: A well-prepared and persuasive proposal is critical to winning government contracts. Small businesses should carefully analyze the contract requirements and tailor their proposal to showcase their understanding of the government’s needs and their ability to deliver quality work on time and within budget.
  5. Build a strong network: Networking with other government contractors, agency personnel, and industry professionals is essential. Building relationships within the government contracting community can lead to valuable partnerships, teaming opportunities, and potential contract referrals.

By implementing these strategies and leveraging available resources, small businesses can enhance their competitiveness in government contract bidding.

Tips for Developing a Strong Proposal

When developing a proposal for a government contract, small businesses should keep the following tips in mind:

  • Thoroughly read the solicitation: It’s crucial to carefully review the solicitation documents to understand the government’s requirements and evaluation criteria.
  • Showcase expertise and past performance: Highlighting relevant experience and successful past performance can demonstrate the small business’s ability to meet the contract requirements.
  • Address the government’s needs: Clearly articulate how the small business’s products or services will address the government’s needs and provide tangible benefits.
  • Follow instructions and provide complete documentation: It’s important to strictly adhere to the solicitation instructions and provide all requested documentation, ensuring nothing is overlooked.
  • Proofread and edit: Carefully review the proposal for any errors or inconsistencies. A well-written, error-free proposal reflects professionalism and attention to detail.

By incorporating these tips, small businesses can craft a compelling proposal that stands out among competitors.

Advantages of a Strong Proposal Tactics for Writing a Winning Proposal
  • Increased likelihood of winning the contract
  • Ability to highlight unique strengths and capabilities
  • Improved perception of the small business’s professionalism and expertise
  • Thoroughly understand the requirements and evaluation criteria
  • Clearly demonstrate understanding of the government’s needs
  • Provide compelling evidence of past performance and qualifications

Registering for Government Contracts

Small businesses interested in government contracts must register with the System for Award Management (SAM). SAM is a government-wide online portal that allows businesses to register as contractors and search for business opportunities. During the registration process, businesses must provide their North American Industry Classification System (NAICS) codes and determine if they qualify for contracting assistance programs. They must also ensure they have the necessary licenses, permits, and insurance.

Steps to Register for Government Contracts
1. Access the System for Award Management (SAM) website.
2. Create an account and provide your business information.
3. Determine your North American Industry Classification System (NAICS) codes.
4. Determine if your business qualifies for contracting assistance programs.
5. Ensure you have the necessary licenses, permits, and insurance.
6. Complete the registration process and submit your information.

Registering with SAM is essential for small businesses seeking government contracts. It allows businesses to showcase their capabilities and access a wide range of contracting opportunities. By accurately providing the required information and ensuring compliance with regulations, small businesses can position themselves for success in the government contracting marketplace.

Finding Government Contract Opportunities

Small businesses looking for government contract opportunities have several resources at their disposal to identify relevant solicitations. One such resource is SAM.gov, a comprehensive online portal that allows businesses to search for government contracts. By utilizing the search engine on SAM.gov, businesses can filter and browse through a wide range of government solicitations.

Additionally, small businesses can explore other avenues to find government contract opportunities. These include:

  1. Reviewing agency budgets: By analyzing agency budgets, small businesses can identify potential government purchasing needs and upcoming contracts.
  2. Monitoring expiring contracts: Paying attention to contracts nearing expiration can present opportunities for small businesses to compete for upcoming contract renewals.
  3. Examining capital spending plans: Understanding the government’s capital spending plans can provide insights into upcoming projects and associated contracting opportunities.
  4. Attending networking events: Networking events specific to government contracting can help small businesses establish connections with key decision-makers and prime contractors.
  5. Seeking guidance from government contracting assistance centers: Government contracting assistance centers offer valuable resources, workshops, and guidance to help small businesses navigate the world of government contracting.

Benefits of Using SAM.gov for Contract Opportunities

The utilization of SAM.gov as a primary resource for government contract opportunities offers several advantages to small businesses:

  • Time-saving: SAM.gov provides a centralized platform where businesses can efficiently search for and filter through various solicitations, saving significant time compared to manually searching individual agency websites.
  • Comprehensive database: SAM.gov houses a vast database of government contracting opportunities, ensuring that small businesses have access to a wide range of potential contracts.
  • Convenience: The user-friendly interface of SAM.gov makes it easy for businesses to navigate and locate the specific opportunities suited to their capabilities and areas of expertise.
  • Access to additional resources: SAM.gov also offers access to other useful resources, such as contracting forecasts, contract award histories, and information about small business preference programs.

By leveraging the power of SAM.gov and exploring other avenues for contract opportunities, small businesses can position themselves for success in the competitive government contracting market.

Writing Winning Proposals for Government Contracts

When it comes to government contracting opportunities, writing a compelling proposal is key to standing out and securing contracts for small businesses. The proposal is your chance to showcase your understanding of the government’s needs and your ability to deliver a solution. Here are some essential strategies to help you craft a winning proposal:

  1. Thoroughly read the solicitation: Before crafting your proposal, make sure to carefully read the solicitation documents provided by the government agency. Understanding the requirements, evaluation criteria, and any specific instructions is crucial to tailor your proposal effectively.
  2. Showcase your understanding: Demonstrate your comprehension of the problem or need outlined in the solicitation. Clearly articulate how your small business can address the government’s requirements, providing specific details on your proposed solution.
  3. Follow instructions meticulously: Pay close attention to the instructions provided in the solicitation. Answer each question and provide all requested documentation accurately and thoroughly. Failing to adhere to the instructions can result in your proposal being disqualified.
  4. Highlight past performance: Emphasize your small business’s relevant past performance in similar projects. Provide evidence of successful outcomes and customer satisfaction to showcase your capability to meet the government’s needs.
  5. Include certifications: If your small business holds any certifications or qualifications relevant to the contract, make sure to highlight them in your proposal. Certifications can demonstrate your expertise and set you apart from competitors.
  6. Present a compelling value proposition: Clearly articulate the unique value your small business brings to the table. Explain how your offering is superior, more cost-effective, or provides additional benefits compared to other potential contractors.

By following these strategies and investing time in crafting a strong proposal, your small business can position itself as a competitive candidate for government contracts. Remember, attention to detail, alignment with the solicitation requirements, and effective communication of your qualifications are crucial to winning government contracts.

Teaming and Subcontracting Opportunities in Government Contracts

Small businesses looking to expand their presence in government contracting can take advantage of teaming and subcontracting opportunities. These partnerships allow small businesses to collaborate with larger companies and gain access to a broader range of contracts, enhancing their chances of success.

Teaming up with larger businesses provides small businesses with valuable resources, expertise, and established relationships within the government contracting community. This opens doors to larger-scale projects and contracts that may have been out of reach otherwise. By joining forces, small businesses can leverage their unique capabilities and strengths to deliver comprehensive solutions to government agencies.

Moreover, subcontracting for prime contractors offers another avenue for small businesses to participate in government contracts. Prime contractors are typically responsible for managing larger contracts and often subcontract smaller portions of the work to specialized small businesses. This subcontracting arrangement allows small businesses to work on government contracts without the challenges of competing directly for prime contracts.

Subcontracting is an excellent opportunity for businesses that are just starting in government contracting. It allows them to gain experience, build credibility, and establish a track record of successful project delivery. These accomplishments can position small businesses for future prime contracting opportunities, paving the way for their growth and expansion in the government contracting industry.

Teaming and subcontracting opportunities present numerous benefits for small businesses, such as:

  • Gaining access to larger, more complex contracts
  • Enhancing capabilities through collaboration with experienced partners
  • Establishing relationships with key stakeholders and decision-makers
  • Increasing exposure and visibility within the government contracting community

Small businesses interested in teaming or subcontracting should extensively research potential partners and assess their compatibility and alignment with their business goals and values. Collaboration and effective communication are vital for the success of these arrangements, ensuring clear roles, responsibilities, and expectations are established from the outset.

By exploring teaming and subcontracting opportunities in government contracts, small businesses can leverage the strengths of others while experiencing growth and expansion within the government contracting landscape.

Government Contracting Opportunities in Canada

Expanding into the Canadian government contracting market can offer lucrative opportunities for small businesses to diversify and grow their operations. Understanding the Canadian market landscape and identifying target buyers are essential steps to pursue government contract opportunities in Canada. Market intelligence tools can be valuable resources to track federal, provincial, and municipal spending areas and identify key decision-makers in the Canadian government procurement process.

Preparation and Understanding the Canadian Bidding Process

Successfully winning government contracts in Canada requires proper preparation and a comprehensive understanding of the Canadian bidding process. Small businesses should familiarize themselves with the specific regulations, requirements, and procedures for government procurement in Canada. This includes understanding the legal framework, bid evaluation criteria, and contract award processes. Diligent research and professional guidance can help small businesses navigate the intricacies of the Canadian government contracting landscape.

To ensure a competitive advantage when bidding for Canadian government contracts, small businesses should pay attention to factors such as:

  • Compliance with procurement regulations and policies
  • Understanding the needs and priorities of Canadian government buyers
  • Developing a robust proposal that meets the specific requirements
  • Offering competitive pricing and value

By carefully preparing and tailoring their bids to meet Canadian government expectations, small businesses can position themselves favorably in the competitive Canadian government contracting market.

Key Factors for Success in Canadian Government Contracting

When pursuing government contracting opportunities in Canada, small businesses should consider the following key factors for success:

  1. Localized Networking: Building relationships and network connections within the Canadian government procurement community can provide valuable insights, partnerships, and subcontracting opportunities.
  2. Supplier Diversity Programs: Canadian government agencies may have supplier diversity programs in place for small businesses, women-owned, minority-owned, or Indigenous-owned businesses. Small businesses should research and explore these programs for increased opportunities.
  3. Understanding Provincial Opportunities: Canadian provinces have individual government procurement practices and priorities. Small businesses should research and understand specific opportunities and requirements at the provincial level.
  4. Aligning with Canadian Priorities: Canadian government contracting often prioritizes areas such as sustainability, innovation, and economic development. Small businesses should emphasize their capabilities and value proposition in these areas.

Evaluating the Canadian Government Contracting Landscape

Before entering the Canadian government contracting market, small businesses should evaluate the competitive landscape and assess their readiness. Factors to consider include:

  • The level of competition from other small and large businesses
  • The demand and growth potential in the Canadian market sectors relevant to the small business
  • The financial resources and capabilities required to fulfill Canadian government contracts

Conducting thorough market research and seeking expert advice can help small businesses make informed decisions regarding their entry into the Canadian government contracting market.

Pros of Canadian Government Contracting Cons of Canadian Government Contracting
Access to a well-regulated and transparent procurement process Navigating complex procurement regulations and requirements
Potential long-term contracts and recurring revenue streams Increased competition from local and international businesses vying for government contracts
Opportunities for growth and expansion into the Canadian market Initial investment in market research, bid preparation, and adaptations to Canadian regulations

By carefully evaluating the benefits and challenges, small businesses can determine if pursuing Canadian government contracting is a strategic and feasible endeavor for their operations.

Resources for Government Contracting Success

When it comes to government contracting, small businesses can access a range of valuable resources to enhance their chances of success. These resources provide guidance, support, and access to crucial information. Whether it’s counseling from the Small Business Administration (SBA), market intelligence tools, or networking opportunities, small businesses have various avenues to explore. Let’s take a closer look at some of these resources:

1. Small Business Administration (SBA)

The Small Business Administration plays a vital role in helping small businesses excel in government contracting. The SBA offers counseling and assistance to small business contractors, providing them with valuable insights and guidance throughout the contracting process. By leveraging the resources and expertise of the SBA, small businesses can navigate the complexities of government contracting more effectively.

2. GovWin IQ

GovWin IQ is a powerful market intelligence tool that can greatly benefit small businesses in their pursuit of government contracts. This tool provides valuable insights and information on government projects, contract opportunities, and potential leads. By leveraging GovWin IQ, small businesses can stay ahead of competitors, identify relevant government projects, and position themselves strategically for success.

3. Networking Events and Government Contracting Assistance Centers

Networking events and government contracting assistance centers are excellent platforms for small businesses to connect, collaborate, and learn from experienced contractors and industry experts. These events and centers provide opportunities to build relationships, gain industry insights, and receive guidance on navigating the government contracting landscape. By participating in networking events and accessing support from government contracting assistance centers, small businesses can enhance their chances of securing valuable contracting opportunities.

By utilizing these resources, small businesses can maximize their potential in the government contracting arena. Whether it’s leveraging counseling services from the SBA, utilizing market intelligence tools like GovWin IQ, or engaging with the government contracting community, these resources provide the necessary support and guidance to achieve contracting success.


Government contracting offers tremendous opportunities for small businesses to thrive and grow. By understanding the requirements and leveraging available resources, small businesses can increase their chances of success in securing government contracts. The Small Business Administration (SBA) provides valuable assistance and guidance throughout the contracting process, ensuring small businesses are well-prepared.

Developing strong proposals that showcase a deep understanding of the government’s needs and a track record of delivering on time is crucial. Small businesses can also benefit from teaming and subcontracting opportunities, allowing them to gain valuable experience and expand their capabilities.

Both federal and state governments offer various programs and set-aside contracts to support small businesses. These programs, such as the small business preference programs and set-aside contracts, help level the playing field and create opportunities specifically for small businesses.

With the right preparation, strategy, and perseverance, small businesses can succeed in the government contracting market and secure sustainable revenue streams. Government contracts can provide a reliable source of income, support economic development, and contribute to job creation, making them an attractive opportunity for small businesses seeking growth and success.

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