The U.S. government is the world's largest purchaser of goods and services, awarding hundreds of billions of dollars in federal contracts each year. Your physical security business can be very successful with just B2B contracts, but to elevate your organization to the next level, you will want to pursue government contracts. It can be highly profitable, improve credibility, and put you on the map for even higher gains. You can also feel good knowing that because of your physical security work, the local law enforcement can be freed up to focus on more pertinent issues.
It can be intimidating pursuing a contract with the government, bidding against other credible companies, and following suit to all standards the government lays out for you. But we've broken it down into three simple steps so you can feel confident in taking on this endeavor.
Start with the basics: What are government contracts?
The U.S. government is the world's largest customer. It buys all types of products and services and is required, by law, to provide opportunities for small businesses. These opportunities, or "set-asides," usually require a competitive bidding process in which each company competes for the contract with the government. Sometimes, two or more small businesses can compete for a contract by forming a joint venture. For more information on the types of contracts and minority advantages, go here.
Step One: Become a Compliant Government Contractor
The first step in your journey to becoming a governmental contract rockstar is legally qualifying as a small business and registering as a government contractor. Then you can start looking for prime or subcontracting opportunities with the federal government.
- Prime contractors bid on and win contracts directly from government agencies.
- Subcontractors join prime contractor teams, usually to provide a specific capability or product.
The Small Business Association (SBA) has broken down the foundational requirements for becoming a government contractor into five simple steps:
- Get proper registrations and I.D. numbers: You will receive a UEI when registering with SAM at SAM.gov. Entities doing business with the federal government must use the UEI created by the system.
- Meet size standards: Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as small businesses. However, there are exceptions by industry. You can view these in Title 13 Part 121.201 of the Code of Federal Regulations (CFR) or the SBA's table of small business size standards.
- Register with SAM: Using SAM, you'll be able to certify that your business is eligible for contracts that are reserved for small businesses.
- Maintain compliance: Regulations covering government contracting programs for small businesses are listed in 13 CFR 125.
- Cybersecurity requirements: Each Department of Defense request for proposal will list a Cybersecurity Maturity Model Certification (CMMC) level required to bid the work.
Step Two: Stand Out
Like any competition, this war is about setting your company apart from the rest, even if you provide the same services as the next guy. Many factors go into deciding who wins in a competitive contract bid war. The government has streamlined the process and ensured it is a fair playing ground for all businesses. With that being said, the General Services Administration (GSA) has found that companies with the following assets tend to have higher chances of winning a government contract:
- Companies with two years of experience working with federal contracts as prime or subcontractors.
- Businesses that have contacts and relationships within the federal contracting community.
- Business owners who work with a mentor who is a successful GSA contractor.
- Companies that attend GSA seminars and workshops on contracting.
- Businesses that invest between $80K—$130K to find and manage the initial government contract.
We also recommend securing a contract with the U.S. General Services Administration (GSA) — the government agency that connects government buyers with contractors. Securing a contract with the GSA is also called "getting onto the GSA Schedule," which means you've been approved to do business with the government. See the size standards and other rules and responsibilities on the SBA website.
Note: While we don’t cover GSA regulations in our webinar on Government Contracting, we feel it’s important to include it here so you have the whole picture.
Step Three: Find and Win Bids
It can be overwhelming to look for open government contracts. Thankfully, the process has been streamlined, and the U.S. Gov has made the process easy for both sides of the coin.
To be found: Government agencies use Dynamic Small Business Search (DSBS) to find small business contractors for upcoming contracts. SBA maintains the DSBS database. The information you provide when registering your business in the SAM is used to populate DSBS, so you should create a comprehensive business profile.
To find: Federal business opportunities for contractors are listed at SAM.gov. SubNet is a database of subcontracting opportunities posted by large contractors looking for small businesses to serve as subcontractors.
The certification process and eligibility for set-asides vary from contract to contract, so keep your business profile updated in the System for Award Management (SAM). Check the certification requirements on each contracting program's page for specific details.
Your physical security company will benefit largely from becoming a Prime or Subcontractor for the government. The rules and regulations may be strict, but they are designed to rule in your favor. For more information on how to become a government contractor, how to win bids, and how to stay compliant, visit these resources:
US Chamber of Commerce Article