Starting a New Business after the Pandemic

Small Business Federal Government Contracting Opportunities

Editor-in-Chief: Dawntey Jensen (“DJ”)

Date: May 21, 2021

The United States government purchases trillions of dollars of products and services from organizations from very large businesses to very small ones.  The opportunity to be a vendor for the federal government can be beneficial to your business. This article identifies what steps are involved so your business can become a federal contractor.

  1. Register your business:  This involves formally filing the legal documents needed to officially be able to call your business a business. This process can be conducted with an attorney or you can peruse websites like https://www.nolo.com which have boilerplate contracts and submission processes that may be less expensive for business owners who are budget conscious. Nolo has various types of contracts that can help you decide on your business structure (such as, Limited Liability Corporation, S-Corporation, Limited Liability Partnership) and/or the state of Incorporation (such as, Delaware, Nevada, or your state of residence).
  2. EIN:  Employer Identification Number is like having a Social Security number for your business. An EIN is provided free of charge by visiting the IRS website https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
  3. DUNS number:  Is a unique nine-digit identification number that is provided to each (physical) location of your business.  DUNS numbers are provided by Dun & Bradstreet and are free of charge and can be completed online here https://fedgov.dnb.com/webform/pages/CCRSearch.jsp
    • Documents needed:
      • Legal name
      • Headquarters name and address
      • List any or all DBA (Doing Business As) or other names your business is known by
      • Physical address, city, state, zip code
      • Mailing address, if different from the physical address
      • Telephone number
      • Contact name and title
      • Number of employees at physical location
      • Is it a home-based business?
  4. NAICS Code:  The North American Industry Classification System code is used to categorize a business’ type of product or service numerically.  You can select a primary NAICS code and have other multiple NAICS codes that identify other product or services offered by your business.  Selecting the appropriate codes can be searched online but the United States Census (also free) website enables a search by keywords that returns the NAICS code https://www.census.gov/naics/
  5. Size Standards:  In order to be considered a small business a business must qualify as ‘small’.  The NAICS code selected determines what are the specific dimensions for a “small business”.  Generally, if your business has less than 500 employees and less than $7.5 million in gross annual revenue it is deemed to me a small business. For specific limits the SBA has a size standards tool which may be helpful https://www.sba.gov/size-standards/
  6. Register with SAM:  SAM (System for Award Management) is a free service. Essentially is the database system used by federal employees to search for contractors. If you want your business to provide products or services to the government than you must register with SAM https://www.sam.gov/SAM/
  7. Maintain Compliance:  Lastly, it is expected that all contractors adhere to the rules and regulations required by federal government’s purchasing process which is governed by the Federal Acquisition Regulation, for small businesses 13 CFR 125  https://www.ecfr.gov/cgi-bin/text-idx?SID=50ff66d5d1cc9357d5f4ce114fcc5c79&mc=true&node=pt13.1.125&rgn=div5

Summarily, being able to sell products or services to the federal government can be beneficial to small businesses but the process to enroll as a government contractor can take time. But depending on your business objectives it could very well be worthwhile.

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