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How to Become a Government Contractor

Explore the requirements to become a government contractor. Learn about the business, registration and certification criteria that can help you start a career in government contracting. View article »

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  • 0:01 Government Contractors
  • 1:29 Establish a Business
  • 2:28 Register
  • 3:21 Become Certified
  • 3:50 Submit a Bid
  • 4:15 Get Help

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Video Transcript

Government Contractors

Degree Level Varies by position
Experience Varies with type of contract; contracts often awarded based on past performance
Licensure and Certification Varies with contract type
Key Skills Negotiating and cost estimating skills; skills and knowledge appropriate to the particular contract service
Median Salary (2016) $55,000 (2016 median for contractors with 1-4 years of experience)

Source: U.S. Small Business Administration, Payscale.com

Government contractors provide products and services for local, state and federal governments. Government agencies offer contracts to businesses across all industries. For example, private contractors fill a variety of needs in medical services, research and development, utilities and construction, among other areas. Business owners must build a track record of successful experience and then navigate a detailed process to become eligible for government contracts.

Work environments for government contractors can vary and depend largely upon the services that they provide. Some may work in office settings, acting as consultants on computer projects, while others might provide security services for overseas bases. Salaries received from government contracts are generally higher than in the free market. Successful completion of a service contract with the government may lead to more work in the future.

Educational experience and certification requirements also vary by job. Government contractors must meet specific guidelines set out by government agencies. However, most can benefit from having excellent cost estimating and negotiating skills. According to Payscale.com, in November 2016, government contractors with 1-4 years of experience typically earn a median salary of $55,000 a year. Let's take a look at some of the professional and educational steps involved in obtaining government contracts.

Step 1: Establish a Business

The United States government offers contracts to both sole proprietorships and corporations. A certain number of government contracts are set aside for small businesses. The United States Small Business Administration reports that the federal government alone buys nearly $100 billion dollars worth of goods and services from small businesses each year. This does not include state and local government purchases that amount to many more dollars.

It is important for government contractors to create a track record of success. Government agencies often base part of their decision on the referrals of previous companies. Companies must also meet eligibility criteria related to size and tax status, along with other requirements.

Success Tip:

  • Build a network. It is important for government contractors to network with government procurement agents who can serve as advocates. Networking with other contractors can provide entrepreneurs with tips on how to navigate the bidding process.

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Step 2: Register

Once entrepreneurs have acquired a business reputation and contracts, they can let the government know that they are ready to earn contracts. Registering for federal government contracting requires a series of steps that include obtaining identification numbers related to a company's industry and credit. Companies must also register through Central Contractor Registration, the federal government's contractor database, and obtain past performance evaluations. Small businesses must register separately with their state and local governments to become eligible for state and local government contracts.

Success Tip:

  • Attend expos and trade shows. Federal and local governments often host events, trade shows and seminars to help companies apply for government contracts. These events help small businesses navigate the contracting process by offering advice, providing a point of contact and answering questions.

Step 3: Become Certified

The United States government awards a minimum number of contracts to small business owners that are members of underserved communities, such as low-income neighborhoods in both urban and rural areas. Contracts are also offered to companies owned by veterans and women-owned and minority-owned companies. Businesses located in certain geographical regions may also qualify. Becoming certified as one of these small businesses may give owners receive a competitive edge when applying for government contracts.

Step 4: Submit a Bid

Small businesses can find contracting opportunities by using online databases. They must then follow the directions for submitting a bid. Each agency has its own steps and requirements. Submitting a bid can be a complicated process with detailed requirements. Not meeting the requirements can be grounds for disqualification. Contractors can use federal and local resources to assist with submitting bids.

Step 5: Get Help

Government agencies often have very strict rules and aggressive auditing requirements. Consider seeking out a consultant who is familiar with the requirements and standards needed to successfully fill government needs. If consulting services seem too expensive, visit a Procurement and Technical Assistance Center (PTAC). This resource, provided by the Small Business Administration, has branches throughout the country and can offer assistance in matching a contractor's talents to the government's needs.

Let's review. Government contractors who have between 1-4 years of experience may earn a median annual salary of $55,000. To earn a government contract, they must establish a business, register through Central Contractor Registration, become certified and submit a bid.

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