Government Contracting: A Beginner's Complete Guide
The federal government is the world's largest buyer, spending over $700 billion annually on contracts. Here's how to start winning your share.
Why Government Contracting?
The U.S. federal government spends over $700 billion annually on contracts for everything from IT services and construction to consulting and supplies. Unlike commercial markets where relationships and brand recognition drive sales, government contracting is built on transparent, competitive processes that give new entrants a fair shot.
The government is also legally required to award a percentage of contracts to small businesses — approximately 23% of all federal prime contracts. Programs like the 8(a) Business Development, HUBZone, and Service-Disabled Veteran-Owned Small Business set-asides create reserved opportunities specifically for qualifying small businesses.
Getting Started: Registration and Prerequisites
Before pursuing your first government contract, you need to complete several registrations. First, register your business at SAM.gov (System for Award Management). SAM registration is free and mandatory — no company can receive a federal contract without active SAM registration. During registration, you'll receive a Unique Entity Identifier (UEI) and select your NAICS codes.
Identify the correct NAICS codes for your business. These six-digit codes classify your industry and determine your small business size standard. Choosing the right NAICS codes affects which opportunities you can pursue and which set-aside programs you qualify for.
Consider pursuing relevant certifications: 8(a) for disadvantaged small businesses, HUBZone for businesses in historically underutilized areas, SDVOSB for service-disabled veteran-owned companies, and WOSB for women-owned small businesses. Each opens doors to reserved contract opportunities.
Finding Opportunities
All federal contract opportunities over $25,000 must be publicly posted on SAM.gov (formerly FedBizOpps). Set up saved searches using your NAICS codes and keywords relevant to your services. Monitor the site daily — response deadlines can be tight.
Beyond SAM.gov, use USASpending.gov to research existing contracts and spending patterns in your area. Agency forecast sites show upcoming procurements that haven't been formally solicited yet. Attend industry days and pre-solicitation conferences to learn about upcoming opportunities and meet contracting officers.
Start small. Micro-purchases under $10,000 and simplified acquisitions between $10,000 and $250,000 have faster processes and less competition. These smaller wins build your past performance record for larger pursuits.
Understanding the Procurement Process
Government procurement follows a structured process governed by the Federal Acquisition Regulation (FAR). The basic flow is: the government identifies a need, develops requirements, issues a solicitation (RFP/RFQ), evaluates proposals, selects a winner, and awards the contract.
Proposals are evaluated against criteria defined in the solicitation. Common factors include technical approach (how you'll do the work), past performance (proof you've done similar work), management approach (how you'll run the project), and price/cost (what you'll charge). Understanding how your proposal will be evaluated is the single most important factor in writing a winning response.
Award decisions can be challenged through the protest process. Unsuccessful offerors are entitled to a debriefing explaining why they weren't selected. Use these debriefings to improve future proposals.
Subcontracting: A Smart First Step
Many companies start their government contracting journey as subcontractors to established prime contractors. Subcontracting lets you gain past performance on federal contracts, learn the procurement process from experienced partners, build relationships with government clients, and generate revenue while building your prime contracting capabilities.
Find subcontracting opportunities through the SBA's SUBNet database, prime contractor small business liaison officers, industry networking events, and your Procurement Technical Assistance Center (PTAC). Every PTAC offers free counseling for businesses seeking government contracts.
As you accumulate past performance and build customer relationships, you can transition to prime contracting. Many successful government contractors started as subcontractors and grew into prime contractor roles over 2-3 years.
Building Your Proposal Capability
Winning government contracts requires a repeatable proposal process. Start by building a content library of your best responses, past performance narratives, resumes, and boilerplate sections. This library becomes your competitive advantage — teams that can reuse and adapt proven content produce better proposals faster.
Invest in proposal management tools that automate compliance tracking, content search, and document production. Manual processes are slow, error-prone, and don't scale. Proposerly's AI-powered platform can parse RFP requirements, match them against your content library, and generate draft responses — letting your team focus on strategy and differentiation rather than starting from scratch.