For many businesses, contracting with the U.S. government represents a significant opportunity for stable and often long-term revenue. However, doing business with the federal government comes with unique requirements, procedures, and compliance obligations. Whether you’re a small startup or an established company considering entering the federal market, understanding the basic steps to becoming a government contractor is essential.
Here’s a legal overview of the fundamental steps to get started:
1. Understand Federal Contracting Basics
Before diving into the registration process, it’s important to understand how government contracting works. The U.S. government is the world’s largest buyer of goods and services. Federal contracts range from supplying office supplies to building infrastructure to providing professional services.
The Federal Acquisition Regulation (FAR) governs how federal agencies acquire goods and services. Contractors must comply with these rules, as well as agency-specific supplements.
2. Obtain a Unique Entity ID and Register with SAM
To do business with the federal government, your company must first:
- Obtain a Unique Entity Identifier (UEI) – As of April 2022, the federal government replaced the DUNS number with the UEI, which you can obtain through SAM.gov.
- Register in the System for Award Management (SAM) – SAM registration is mandatory for all contractors seeking federal contracts. This process includes submitting basic company information, selecting applicable NAICS codes (which classify your business’s industry), and certifying compliance with various federal regulations.
3. Determine Small Business Status and Set-Asides
If your business qualifies as a small business under SBA size standards (based on your NAICS codes), you may be eligible for set-aside contracts. Special categories include:
- Woman-Owned Small Business (WOSB)
- Service-Disabled Veteran-Owned Small Business (SDVOSB)
- HUBZone Business
- 8(a) Business Development Program participants
To pursue these opportunities, consider obtaining the relevant certifications from the U.S. Small Business Administration (SBA).
4. Develop a Capability Statement
A capability statement is a concise, targeted document that outlines your company’s qualifications, past performance, core competencies, and differentiators. This is often a critical tool when introducing your business to government buyers or prime contractors.
5. Explore Opportunities and Bid on Contracts
There are several ways to find and pursue government contracting opportunities:
- Contract Opportunities on SAM.gov – This is the primary portal for federal solicitations over $25,000.
- GSA Schedules – If your product or service is in demand across multiple agencies, you may benefit from getting on a General Services Administration (GSA) Schedule, which streamlines the procurement process.
- Subcontracting – Many companies begin as subcontractors to established primes, which can help build experience and credibility in the federal market.
6. Understand Compliance Obligations
Government contractors must comply with various regulations, including:
- Labor laws (e.g., Service Contract Act, Davis-Bacon Act)
- Equal employment opportunity obligations
- Cybersecurity requirements (especially under DFARS and NIST standards for DoD contracts)
- Ethics and anti-kickback rules
You should establish internal compliance policies and consult with legal counsel to ensure your operations align with federal expectations.
7. Keep Registrations and Certifications Current
Once you’re registered and active in government contracting, it’s critical to:
- Update your SAM registration annually
- Maintain certifications and eligibility status
- Track performance metrics and customer feedback
- Stay informed of regulatory changes
Final Thoughts
Becoming a U.S. government contractor is not a one-step process — it requires legal and administrative diligence, strategic planning, and ongoing compliance. Partnering with experienced advisors, legal counsel, or procurement consultants can streamline your entry into this lucrative market. For companies ready to invest the time and resources, government contracting offers a pathway to sustained business growth and stability.