How to Start a Government Contracting Business

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By Jacob Maslow

  • Learn the ropes of government contracting and be on your way to success
  • Get access to lucrative contracts that can set your business up for years to come
  • Understand what’s involved in the bidding process so that you can submit proposals with confidence
  • Get insider tips from those who have successfully navigated these waters before you

Starting a government contracting business can be daunting, but it can also be a great way to set yourself up for success. Government contracts provide an opportunity to make money by providing goods and services to the federal or state governments. With the right preparation and knowledge of the process, you could tap into lucrative government contracts and make your entrepreneurial dreams come true. In this guide, we’ll cover everything you need to know about starting a government contracting business, from understanding the regulations and paperwork involved in submitting bids to finding sources of financing. We’ll also look at how you can find out what types of contracts are available and how you can best position yourself for success when bidding on them. Let’s get started!

SWOT Analysis of a Government Contracting Business

Before you dive into the world of government contracting, you must understand your strengths and weaknesses. A SWOT analysis is a great way to do this. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This kind of analysis can help you identify what resources and skills you have access to that could give you an advantage when competing for contracts. It can also show areas where you may be vulnerable or exposed due to a lack of knowledge or experience.


  • Knowledgeable in the specific services being provided
  • Able to offer competitive pricing and quality service
  • Experienced staff with expertise in navigating regulations


  • Limited resources compared to larger competitors
  • Lack of experience in government contracting processes
  • Limited access to financing and capital


  • Ability to tap into the large and growing market of federal, state, and local contracts
  • Potential for long-term success through repeat business and word-of-mouth referrals


  • Intense competition from established companies with more resources
  • Complex regulations that require extensive knowledge to navigate successfully

Here are five easy steps you can follow to get started in this business:

  1. Prepare your business
  2. Get your business known
  3. Do research
  4. Learn how to write bids for government contracts
  5. Be persistent

We have explained these five steps in detail in this post so you can start your government contracting business without hassle.

What You Are Going to Need

To start a government contracting business, you need to do the following things:

  • Plan your construction contractor business.
  • Define your construction contract brand.
  • Get construction contractor business insurance.
  • Set your business phone number.
  • Open a business bank account.
  • Get necessary permits and insurance.

Step 1: Prepare Your Business

System for Award Management

You must register on the System for Award Management (SAM) to have a successful government contracting business. It’s a platform where government agencies find qualified and trustworthy contractors.

Also, small business teaming partners and large contract holders find qualified subcontractors on this platform. That’s why all the vendors are encouraged to register themselves at SAM to get basic agreements, payments, contracts, and more.

Remember that only SAM-qualified companies are fit to become government contractors. Here’s what you need to prepare before the registration:

#1 Unique Entity ID (UEI)

The federal government has upgraded from requiring contractors to request DUNS Numbers to UEI. You must first get UEI at An easy guide on requesting UEI is available on the government website.

#2 North American Industry Classification Code (NAICS Code)

To register for SAM, you also need NAICS Codes, as it represents your company’s industry. Contracting officers use this code to know about your business and decide whether your company should get the contract.

You can easily apply and get your NAICS Codes online. Make sure you select a code that closely describes your business so contracting officers make the right decision. If your business falls under two or more categories, you can choose more NAICS Codes.

#3 Core Business Information

Core Business Information includes basic business details like mailing address, business structure, physical address, start date, and more.

#4 Financial Information

You need to give your essential financial information to quality for the SAM. Ideally, the government asks for financial information about your preferred payment method. Plus, this information comes in handy when setting up EFT.


CAGE and NCAGE codes are nothing but identifiers that the government assigns. US entities get the CAGE Codes, whereas businesses outside the USA and territories get NCAGE Codes.

Once a US-based company registers for the website, it automatically gets the CAGE Code. However, companies outside the USA must request this code before registering at the website.

Small Business Administration

Besides this, you can prepare your company for government contracting business by getting a Small Business Administration (SBA) certificate. This certificate will allow you to increase the visibility of your business in the federal marketplace.

SBA is an official federal agency that helps promote and protect small businesses. It also monitors several contracting assisting programs, including

#1 8(a) Business Development Program

This program is designed to help small businesses win local, federal, and state contracts. It allows small businesses to compete for set-aside contracts.

All the participating businesses of SBA get one-on-one training with compliance experts and Business Opportunity Specialists. The training lets the companies know about their business capacity to compete for federal contracts.

#2 Women-Owned Small Business Program

As women face discrimination in most industries, this program offers them the best contracting opportunities. It gives women-owned small businesses preference for full competition in government contracts.

#3 HUBZone Program

You can apply for HUBZone if your business is located in a Historically Underutilized Business Zone and 35% of your employees live there.

#4 Veteran Assistance Programs

Retired veterans who own small businesses can take advantage of this program to start their careers. This program can compete for government contracts for set-asides or small businesses.

Step 2: Get Your Business Known

Not only do you need to register for SAM, but you must also get your company known. Build a portfolio and solid reputation for your firm so it becomes trustworthy.

Here’s how you can get your business known:

#1 Attend Networking Events

It’s not easy to have an initial conversation with a government agency. Having meaningful connections is the easiest way to get your foot in the door. Correct networking allows you to meet someone who can help you in the first step of your career.

SBA organizes networking and training events throughout the year so the companies can gain meaningful connections. These networks are both international and local.

One such event is ChallengeHER, which mainly helps small women-owned businesses get in touch with federal agencies. This event encourages more women to enter the federal government’s supply chain and have stable careers.

Besides this, you can also participate in Vendor Outreach Sessions organized by different agencies to encourage small businesses. It also helps women-owned firms and HUBZone by offering them helpful information.

Before you go to your next networking event, try creating an elevator pitch to explain your business. Your pitch needs to be engaging, short, and memorable.

#2 Build Social Media Presence

Along with attending networking events, you need to build the social media presence of your company. It will allow you to reach your targeted audiences and know about the market trend.

Platforms like Facebook and LinkedIn help you have a solid social media presence. Plus, these platforms assist you in getting in touch with great contracting professionals.

Step 3: Do Research

You must research your targeted customers to start a successful government contracting business. This way, you can understand the services and products that customers want. Then depending on their requirement, you can narrow down your offerings and targets.

Federal agencies have OSDBU to help small businesses find the best contracting opportunities. That means you don’t have to search high and low to know about the latest contracting work.

But before you check the OSDBU agency website, research how it performs for small businesses. In your interaction with OSDBU, you can discuss Vendor Outreach Sessions and when they are organized. Understand how your services and products can help the agency’s goal.

Step 4: Learn How to Bid for Government Contracts

You can only make your government contracting business successful by writing impressive bids. Your bid is the ticket to beckoning a government contractor. Here’s how you can write impressive bids.

#1 Choose The Right Federal Contracts

You need to be corrected if you send out contract bids in masses, hoping to get selected in one. It’s a wasteful way. Instead, you should write bids only for contracts that align with your business’s strengths and goals.

#2 Analyze RFP Document

RFP (Request for Proposal) document is one of the few ways the federal government solicits contract proposals. While it’s lengthy, you should read it entirely because it includes everything you need to know to draft a better contract bid.

In the RFP document, you need to consider B, C, L, and M sections. Then, follow the instructions mentioned in the RFP document and create a winning proposal. Neglecting the necessary instructions can get your contract proposal eliminated.

#3 Create Bid Outline

You must create an outline for your bid, ultimately speeding up your writing. Make sure you consider the necessary factors during proposal writing, like a statement, portfolio, capability statement, plan, and identity.

After creating the outline, you need to price your goods and services. Be mindful of the prices because you can neither be too low nor high.

Low prices might invite financial instability in the later stages and create doubt about your quality. At the same time, high prices might drive away government contractors. Try to price yourself in a way that helps you have a good reputation while justifying the cost.

After creating the outline, you need to review the proposal so your proposal doesn’t get rejected due to technical issues. Ask someone to catch the errors before they reach out.

Step 5: Be Persistent

Government contract business can help you have a stable career, but it requires hard work and determination. There is no secret formula to help you secure a contract.

Thus, you need to put in the effort and energy. You might only get contracts if you are persistent in your efforts. Determination and persistence will boost your business and take it to new heights of success.

What We Like and Dislike about a Government Contracting Business


  • It provides stability and growth in terms of getting established.
  • You can invest less money in the business and get more returns from government contracts.
  • Government contracting opportunities help you to explore new markets and reach out to new customers.


  • It is a complex process that involves a lot of paperwork, administration, research, and other activities before getting your proposal accepted by the government.
  • Limited access to resources as you need to bid for specific contracts to be selected as a supplier or contractor.
  • Building trust with government agencies is challenging as they are very cautious while selecting contractors/suppliers. This means it takes time to establish yourself in the market.

Interaction with OSDBU

The Office of Small and Disadvantaged Business Utilization (OSDBU) helps small businesses secure federal contracts. They organize Vendor Outreach Sessions to provide information on government contracting opportunities for small businesses. The sessions are organized in different parts of the country, allowing you to understand how your services and products can help the agency’s goal. Attending these sessions is a great way to gain more knowledge about the government contracting business, improving your chances of winning contracts. You can also look up the different resources provided by OSDBU, such as training programs, seminars, webinars, conferences, and more. This will help you stay updated on any changes or new requirements in the industry while keeping you informed about the latest opportunities.

Final Thoughts

Starting a government contracting business seems challenging and tricky at first. But once you are aware of the steps to be taken to start this business, you can do it.

We have simplified the process of starting a government contracting business so you can become eligible for the best opportunities. Make the necessary preparation and enhance your writing skills to start your business.


Does a government contracting business need to be registered?

Yes, you must register your business with SAM (System for Award Management) and other relevant agencies before bidding on contracts. This registration helps the federal government identify eligible bidders.

Can I start a government contracting business without any experience?

Yes, you can start a government contracting business without any prior experience. However, it is recommended that you have some industry knowledge or partner with someone who understands the process. This will ensure that you are better prepared when submitting bids.

What type of legal documents do I need for my government contracting business?

You should have all the necessary paperwork in place before starting your business. This includes company formation documents, tax information forms, and contracts. Make sure you have all the necessary documents ready before submitting any bids.

Can I bid on multiple contracts?

Yes, you can bid on multiple contracts at a time. However, it is vital to ensure you have enough resources and staff to take them on. Otherwise, it could lead to financial instability in the later stages of your business.

Can I use the same bid for multiple contracts?

No, you cannot reuse the same bid for multiple contracts. Each contract requires a unique approach, and you must tailor your bid to meet its specific requirements. Make sure you read and understand the instructions of each contract before submitting your bid.

Do I need to have existing clients to start a government contracting business?

No, you do not need existing clients to start a government contracting business. However, having existing clients can help show potential government contractors that your services are reliable and trustworthy. This could benefit your chances of winning bids in the long run.

What are the benefits of starting a government contracting business?

Starting a government contracting business can provide you with stability and help boost your overall income. You will also have the chance to work on exciting projects, create valuable connections, and gain access to new opportunities. Additionally, such businesses usually offer attractive salaries and job security.

Do I need particular skills or qualifications to start my government contracting business?

No, you do not need any special skills or qualifications to start your government contracting business. However, it is recommended that you know relevant topics such as economics, finance, marketing, law, accounting, and more. This can give you an edge over competitors when bidding for contracts.

How long does it take to start a government contracting business?

It can take up to 30 days to complete the process of starting a government contracting business. This includes registering with SAM, acquiring all necessary paperwork, and submitting bids. You must ensure you understand every step to successfully set up your business.




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