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The business industry has been facing a lot of trouble for the last couple of years due to COVID-19. As a result, several small companies broke out. But the government contracting business remains firm. Moreover, government contractors enjoy benefits like fair salaries, timely payments, fixed work timings, and steady jobs. Therefore, it is best to start a government contracting business. Below are some tips for contractors and an updated guide to starting a government contracting business in 2022:

Get All Licenses and Permits

The government keeps a tab on the companies with which they are working. Therefore, ensure that you have a regulation-compliant business, and it must have all licenses and permits to prove its fair working.

Register with System Award Management

System for Award Management (SAM) is a common platform for government contractors and federal agencies. Government agencies publish open contracts for bidders, and contractors can bid for them on this website. However, always keep in mind that SAM-registered entities can only qualify for such agreements.

The following are some documents you must prepare before registration:

  • Unique Entity ID (UEI)
  • North American Industry Classification Code (NAICS Code): A special set of codes representing the nature of your business.
  • Core Business Information: It includes your mailing address, business structure, physical address, organization start date, and other business details.
  • Financial Information: It includes details regarding your payment mode. Government can also ask you to set up an Electronic Funds Transfer (EFT).
  • CAGE / NCAGE Code: These codes are identifiers for industries like defense.

Look for Federal Contracting Opportunities


It would be best to learn to scout for government contract opportunities. You can explore it at the website of the system for award management.

Make your Business Popular

Creating a good reputation is a crucial task. However, making your business popular can be daunting, especially if you are new and don’t know where to start. But don’t panic; you can get your business known by attending networking events and building your social media presence with contracting professionals.

Try Subcontracting


Becoming a government contractor can be difficult, especially for small businesses. But you can try subcontracting first as its requirements are not much. Subcontractors are not directly related to government agencies. Instead, they support prime contractors to complete a federal contract.

Learn Bidding for Government Contracts

Getting a contract is a ticket to becoming a full-fledged government contractor. So, below are some tips for writing a bid that can help you to board the plane of government contracting:

  • Select federal contracts that are suitable for your business strengths or goals.
  • Go through the Request for Proposal (RFP) document to learn about a contract opportunity— task, budget, timeframe, and other related details.
  • Strictly follow all the instructions of the RFP document to avoid the elimination of your contract proposal.
  • Make a bid outline to prevent your proposal from being derailed. Consider factors like your business identity, portfolio, capability statement, and plan for the contract.
  • While pricing, learn about market prices. Your price can not be too low or too high. Always remember that the federal government is searching for contractors who can do quality work within justifiable costs.
  • Review final proposal to avoid errors and contract discard due to technicalities. 

To Sum Up

This was an updated guide to starting a government contracting business in 2022. The federal government provides great opportunities, especially for small-scale industries. So, prepare well to become eligible for contracts and become a government contractor. Then, once you make a solid foundation, sharpen your writing skills to get a contract.

Linda Rawson, who is the founder of DynaGrace Enterprises (dynagrace.com), an 8(a) graduate and EDWOSB, contributed to the content of this blog. She is the founder of GovCon-Biz. For further information, please connect with Linda on LinkedIn, or contact her at (800) 676-0058 ext 101.

Please reach out to us at GovCon-Biz should you have any questions.

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