Federal contracting offers businesses a unique path to stability, growth and purpose by partnering with one of the world’s largest and most reliable clients—the U.S. government. Each year, billions of dollars in federal contracts are awarded to companies of all sizes, fueling innovation, strengthening national infrastructure and supporting key industries ranging from defense to healthcare.
For small businesses, it’s a chance to expand their reach, gain long-term revenue and build credibility in competitive markets. However, success in the GovCon world requires more than ambition. It demands knowledge.
Understanding how the contracting process works, from registration and compliance to bidding and performance, is critical to securing and maintaining government work. By becoming educated on federal procurement rules and best practices, entrepreneurs can navigate the system effectively, avoid costly mistakes and best position their businesses to thrive in one of the most rewarding sectors of the American economy.
What Is Government Contracting?
Individuals or firms who enter into a contract with any government department or agency to perform a specified task, provide labor and materials, or sell goods and services, are known as federal contractors. A federal subcontractor is a business that works with another business that has direct government contracts.
Why Is Government Contracting Important?
The federal government needs to acquire products and services in order to perform public and essential services. These include those required for public safety, national security, health, infrastructure and social services.
Who Can Be a Government Contractor?
Basic Requirements for Government Contracts
- Meet eligibility and registration requirements
- Obtain Unique Entity Identifier and North American Industry Classification System, or NAICS, codes through SAM.gov
- Ensure your business meets the Small Business Administration size standards
Action step: Register your company on SAM.gov, the federal government’s official contract opportunity website, and verify all information is accurate and complete
- Understand and follow contracting principles
- Federal contracting emphasizes transparency, fairness and responsibility
- Contractors must adhere to the Federal Acquisition Regulation, or FAR, and other applicable laws
Action step: Review FAR guidelines and establish internal compliance procedures before bidding
- Prepare for compliance and performance requirements
- Secure necessary cybersecurity certifications, such as Cybersecurity Maturity Model Certification, or CMMC, for Department of Defense contracts
- Organize all required documentation and maintain detailed records for audits
Action step: Conduct a cybersecurity readiness assessment and implement controls that meet federal standards
By completing registration, aligning with core contracting principles and maintaining compliance readiness, your business will be positioned to successfully pursue and manage federal government contracts.
How to Get Started
- Prepare strategically before entering GovCon
Government contracting offers stability and profit potential, but success requires preparation. Businesses should evaluate whether federal contracting aligns with their goals, strengths and capabilities before committing
- Leverage small business assistance programs
Programs such as the SBA 8(a) business development program, Women-Owned Small Business, HUBZone and Veteran-Owned Small Business provide valuable support, mentoring and access to set-aside contracts that can give new contractors a competitive edge
- Master registration, research and compliance
Registration with SAM.gov, obtaining your Unique Entity ID, NAICS and Commercial and Government Entity codes, and understanding FAR are fundamental. Compliance and market research are critical for identifying the right agencies, competitors and opportunities
Action steps
- Assess your readiness
Make sure GovCon aligns with your business goals, strengths and capacity. Evaluate whether your company can handle the financial, regulatory and operational demands - Register your business
Obtain your UEI and NAICS and CAGE codes before completing registration on SAM.gov. This is required before you can bid on any federal contract - Apply for small business certifications
Explore programs like the SBA 8(a), WOSB, HUBZone, and Veteran-Owned Small Business programs. These certifications provide access to set-aside contracts and mentoring opportunities - Research your market
Identify target federal agencies and study their spending patterns. Use tools like SAM.gov, Dynamic Small Business Search and GSA forecast tools to find opportunities that match your capabilities - Learn how to write strong bids
Carefully read each request for proposal, follow every instruction, price competitively and proofread before submission. Precision and compliance are key to winning contracts - Build relationships and visibility
Attend networking events and industry summits, such as those hosted by the Potomac Officers Club, and maintain a professional presence on LinkedIn. Building credibility and connections is vital in the GovCon community
✅ In summary: Evaluate → Register → Certify → Research → Bid → Network.
Following these steps will position your business to successfully enter and grow in the government contracting industry.
How to Find Government Contracts
- Learn how the federal contracting system works
GovCon follows strict rules under the FAR, which governs how agencies buy goods and services. Understanding these rules is crucial before pursuing contracts - Know where to find contract opportunities
The main hub for federal contract listings is SAM.gov. State and local governments also post opportunities on their own procurement portals. Some contracts are set aside for specific small businesses programs, such as HUBZone, WOSB and SDVOSB - Understand the main contract types
Federal contracts come in various forms—such as fixed-price, cost-reimbursement, incentive and indefinite-delivery contracts. Each of these have different levels of risk and reward
Action Steps
- Study the basics of FAR
Learn the Federal Acquisition Regulation to understand the rules governing how agencies procure goods and services - Register on SAM.gov
Create an account, complete your business profile and search for open opportunities using filters for your industry and size classification. - Identify set-aside opportunities
Check whether your business qualifies for small business programs and focus your bids accordingly - Explore contract types before bidding
Assess which contract types; such as fixed-price or cost-reimbursement, among others; best fit your risk tolerance and capacity - Look beyond federal work
For state and local contracts, register with your state or city’s procurement website. For example: Virginia or Fairfax County portals
✅ In short: Learn the system → Register on SAM.gov → Target the right set-asides → Match contract types to your strengths → Expand to state/local levels.
Government Contracting Alternatives
What is a Subcontractor?
- What is subcontracting?
Subcontracting is the practice of hiring an outside company or individual to perform specific tasks or services that are part of a larger project or contract - Subcontracting is the best entry point into GovCon
Becoming a subcontractor allows small businesses to enter the federal market with less risk and fewer administrative barriers than prime contracting. It’s a great way to build experience, credibility and a specialized GovCon portfolio - Success depends on specialization, compliance and networking
To stand out, you must identify your niche expertise, legally register your business, understand your rights and responsibilities, and actively pursue opportunities through government portals and industry events. Those offered by the Potomac Officers Club are great opportunities to generate new subcontracting business - Protect yourself legally and financially
Review all subcontracting contracts carefully, especially compensation, flow-through and indemnification clauses. Secure appropriate insurance coverage, such as commercial general liability, to safeguard your business
Action Steps
- Define your expertise
Decide which specialized skills or services you can offer to prime contractors, such as IT, construction, logistics or healthcare, to name a few. - Register and comply
- Legally register your business and pay required taxes
- If applicable, qualify for small business programs through the SBA
- Understand the rules
Learn subcontracting rights, small business policies, and relevant regulations under the FAR and the Code of Federal Regulations - Find opportunities
Regularly check:- SBA’s SubNet
- GSA’s Subcontracting Directory
- SAM.gov for open federal opportunities
- Network and build relationships
Attend events like the Potomac Officers Club summits to connect with prime contractors and government agencies - Review contracts carefully
Have an attorney review terms for payment, flow-through and indemnification to ensure your rights are protected - Get insured
Obtain CGL insurance or equivalent coverage before starting any project
Bidding and Winning Contracts
Key Takeaways
- A strong, focused proposal is essential to winning contracts
GovCon success starts with submitting a clear, compliant and well-researched bid proposal that matches your company’s strengths. Avoid bidding on every opportunity. Target only those that fit your expertise and capacity - Market research and compliance are critical
Understanding your competition, reading the RFP thoroughly and ensuring your bid meets all FAR and formatting requirements are key to credibility and selection. - Use the right platforms to find opportunities
Government contract solicitations and subcontracting opportunities are primarily found on SAM.gov, SubNet and the GSA Schedule—all vital tools for identifying viable projects and building your GovCon reputation
Action Steps
- Target the right opportunities
- Focus only on contracts that align with your company’s core strengths and experience
- Avoid overbidding or underbidding. Research fair market pricing on usaspending.gov
- Do your homework
- Research competitors using the DSBS tool
- Study awarded contracts to understand pricing, performance standards and client expectations
- Perfect your proposal
- Read the RFP carefully and follow every instruction
- Keep your proposal clear, specific and consistent in format
- Include a precise plan to meet the agency’s needs and demonstrate value.
- Register properly before bidding
- Obtain your federal tax ID and NAICS code and register your business on SAM.gov
- Complete your SBA profile to be listed in the DSBS for added visibility
- Explore multiple avenues for work
- Monitor SAM.gov, SubNet and GSA schedule contracts regularly
- Consider subcontracting under larger primes to gain experience and build your GovCon portfolio
✅ In short:
Focus your bids → Research competitors → Perfect your proposal → Register & comply → Pursue opportunities strategically.
Final Summary
Key Takeaways
- Multiple contract types offer diverse opportunities
The federal government awards various contract types, such as set-asides, joint ventures, fixed-price, cost-reimbursement and indefinite-delivery contracts. Each of these cater to different business sizes and risk levels. Small businesses can gain entry through competitive or sole-source set-asides and subcontracting. - Transparency and accessibility are central to GovCon
Federal contracts are public records with some exceptions for sensitive business information. The government maintains open access to contract data, awarded projects and future opportunities to ensure fair competition - Several key platforms list contract opportunities
The main portals to find and track government contracts include SAM.gov, USASpending.gov, SubNet, Small Business Search and the GSA Multiple Award Schedule. Each platform serves a specific purpose, from finding open bids to researching past awards.
Action Steps
- Identify the right contract type for your business
- Learn about set-aside, fixed-price and cost-reimbursement contracts
- Choose opportunities that match your capacity and risk tolerance
- Register and build your profile
- Register your business on SAM.gov and Small Business Search through the SBA
- Complete your profile accurately to appear in federal contractor listings
- Search for opportunities regularly
- Check SAM.gov for new solicitations and open bids.
- Use USASpending.gov and the GSA Forecast of Contracting Opportunities to research trends and past awards
- Explore SubNet if you’re starting out and want to gain experience as a subcontractor
- Pursue local and DOD Opportunities
- Visit your state or city procurement office for local contracts.
- Check SAM.gov and the official DOD website
✅ In short:
Understand contract types → Register and profile your business → Use federal platforms to find and track opportunities → Start locally or as a subcontractor to gain GovCon experience.
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