How Small Business Can Win Government Contracts

Small business are really the foundation of any economy, but in recent times it has been at cross roads with the economic down turn which has reduced drastically the ability of regular clients to spend money on small business.

However, in the article below you will find tips on how you can turn around the situation by sourcing contracts from the Federal government. There lots of things small businesses like yours can do for the government. Read the below article to find out how you can take advantages of all the jobs the government has to offer and stay afloat while the economy struggles to revive. Enjoy.

Three Best Ways to Win a Government Contract

By RAYMUND FLANDEZ

More small businesses are looking to make the federal government a client, since it's a smart way to diversify sources of revenue when regular clients aren't biting. The U.S. government is the largest buyer of goods and services in the world, spending $500 billion last year. And that's not including the additional $787 billion in stimulus-bill related contracts. Last year, the federal government awarded small businesses $93.3 billion in prime contracts – although it missed a 23% goal mandated by Congress. (See related story, U.S. Misses Target for Small-Business Contracts.)

While dealing with red tape can be arduous, there are ways to make the process go more smoothly. Experts say your business has to be ready for this kind of work; sound accounting systems and experienced contract attorneys must be in place to make sure your business is protected and doesn't fail to meet the government's expectations. The challenge, still, is how to maneuver your way into the system and find a governmental need that your business can provide.

Here are three best ways to win a government contract.

1. Do your homework. Try to find out which local businesses are getting government contracts, what kind of work they're doing and which agencies are handing them out. You can do this at USASpending.gov or FBO.gov (a.k.a. FedBizzOpps.gov). The next step is to register your small business with the federal government at the Central Contractor Registration, or CCR.gov, says Lourdes Martin-Rosa, American Express Open adviser on government contracting. There you can sign up for the required Dun & Bradstreet number to get started. This way, different agencies can easily view you as a legitimate small-business contractor. In addition, get to know the appointed small-business specialists who are at every level of the federal government, Ms. Martin-Rosa says. They may be able to connect you with a good source directly. "Small businesses need to understand that there are tools and resources that are available to them," she says. "They just need to learn how to actively go in there and find the opportunity." Another good guide is from the Small Business Administration at www.sba.gov/fedcontractingtraining.

2. Work with others who have experience. It's a steep learning curve, so consider partnering with another business that has been doing federal contracting work for years or be one of its subcontractors. Lynn Sutton, managing principal of Kairos Consulting Worldwide LLC of Chicago, recently received her first government contract in September last year for $1.26 million with the Department of Defense. She couldn't have done it without teaming up with another local business, which had done some federal contracting work for two to three years prior and had informed Ms. Sutton about the opportunity, she says. The other business helped her management-consulting firm navigate the contracting process, and now shares the contract. "It was life-changing, a huge turning point for the company [as] companies on the private sector are really tightening their belts," she says. Her company recently got an extension of the contract, which now totals $2 million, to September 2010.

3. Use other resources to your advantage. If appropriate, get your small business certified in a category that may give you an edge, such as woman-owned, minority-owned, veteran-owned, or in a poor economic area called a HUBZone. Each agency is required to hand at least 23% of all federal contracts to these groups. "Help them make their small-business goals," says Babs Doherty, president and chief executive of Eagle Ray Inc. of Chantilly, Va. Her woman-owned management-consulting service company, which specializes in standards compliance and software testing, has been doing subcontracting work since 2002 and has become a primary contractor for the Coast Guard in the past few years. One good resource for women-business owners is GiveMe5.com, a program to educate 200,000 women on federal contracting opportunities and created by American Express Open and Women Impacting Public Policy.

Write to Raymund Flandez at raymund.flandez@wsj.com