Step-by-step guide on how to become a government contractor

​Diving into the world of government contracting can open up a wealth of opportunities for your business. Interestingly, the federal government is the largest purchaser of goods and services in the U.S. And it’s always on the lookout for reliable small businesses to fulfill its diverse needs. But how do you tap into this lucrative market? In this guide, we’ll explain how to become a government contractor, find new opportunities, and position your business to win bids. Even if you’re new to federal contracting.

Why government contracting could be your business’s golden ticket?

Before we dive into the how-to, let’s talk about why this is such a game-changer. 

• Reliable paychecks: The federal government spends over $600 billion annually on its budget–from paper clips to cybersecurity services. And they pay their bills on time, every time.
• Level playing field: About 23% of all federal contracts are set aside specifically for small businesses. That means you’re not competing against corporate giants.
• Long-term relationships: Win one contract, deliver well, and you’ve got a foot in the door for years of repeat business.
• Diverse contracting opportunities: Whether you’re in IT, the construction industry, janitorial services, or manufacturing, there’s likely a government agency that needs what you offer.

Now, I know what you’re thinking: “This sounds great, but isn’t government contracting super complicated?” Well, it need not be if you know exactly how to go about it. Let’s break the process down into manageable steps. 

Step 1: Find out if your business qualifies for government contracting

The first step is to determine if you qualify as a small business.

Understand size standards (No, this isn’t about your office space)

The government has very specific definitions of what counts as a “small business.” These size standards vary by industry and are based on either:

• Number of employees (typically under 500)
• Average annual receipts (usually under $7.5 million)

Pro tip: Use the SBA’s Size Standards Tool. It’s like a decoder ring for government contracting eligibility.

Find your NAICS code (your business’s government ID)

The North American Industry Classification System (NAICS) code is how the government categorizes businesses. Think of it as your business’s “genre” in the government’s eyes.

For example:

• IT consulting = 541511
• Commercial cleaning = 561720
• Construction = 236220

Pro tip: You can actually select multiple codes if your business does different things. More codes = more potential opportunities.

Take care of the basic requirements checklist

Before going further, make sure you:

• Are a for-profit business
• Operate in the United States.
• Are in good legal and financial standing
• Have all your business licenses in order

Step 2: Understand your government contractor registration roadmap

Get your UEI (your business’s government Social Security Number)

First things first, you need a Unique Entity ID (UEI). This replaced the old DUNS number system, but serves the same purpose: it’s how the government identifies your business.

Pro tip: To get your UEI, head to SAM.gov and click “Register an Entity.” It’s free and takes about 10 minutes.

Start the SAM registration process (your gateway to contracts)

SAM (System for Award Management) is where the magic happens. This is your official profile in the government’s vendor system.

Here’s what you’ll need:

• Your business’s legal name and address
• EIN (Employer Identification Number)
• Bank account information (for payments)
• Your NAICS codes

Pro tip: There are companies that will charge you hundreds of dollars to do this registration for you. Don’t fall for it! The process is free if you do it yourself.

Get special certifications that can give you an edge

Certain contracts are set aside for specific types of businesses. These include:

• Women-Owned Small Business (WOSB)
• Veteran-Owned (VOSB) or Service-Disabled Veteran-Owned (SDVOSB)
• HUBZone (for businesses in historically underutilized areas)
• 8(a) Business Development Program (for disadvantaged businesses)

Pro tip: Getting certified in one of these programs can significantly increase your chances of winning contracts. The application processes vary, but the SBA’s certification portal is a good starting point.

Step 3: Hunt for the right opportunities (without losing your mind)

Master SAM.gov (your contract hunting ground)

SAM.gov is where most federal opportunities are posted. But with thousands of listings, it can sometimes feel overwhelming. But, don’t lose hope.

Pro tip: Use the “Advanced Search” feature, filter by your NAICS codes, look for “Set-Aside” opportunities (these are reserved for small businesses), and set up email alerts for new opportunities in your category.

Demystify the subcontracting secret (get your foot in the door)

Many small businesses start as subcontractors to larger prime contractors. It’s like getting a government contract with training wheels. Don’t shy away from it.

Here’s where to find these opportunities:

• The SBA’s SubNet system
• Industry events and matchmaking conferences
• Direct outreach to primes in your field

Learn about agency-specific opportunities

Some federal agencies have their own contracting systems:

• GSA Schedules: Great for recurring service contracts
• Defense Logistics Agency: For DoD-related work
• NASA SEWP: For IT products and services

Step 4: Craft winning bids (without pulling your hair out)

Understand the different types of solicitations

Not all government bids are created equal:

• RFQ (Request for Quotation): Simple price quotes
• RFP (Request for Proposal): More complex, requiring technical solutions
• IFB (Invitation for Bid): Strictly price-based, lowest bidder wins

Create a killer proposal

Here’s what separates the winners from the also-rans in the hundreds of proposals:

• Executive summary (make them want to read more)
• Technical approach (show you understand their needs)
• Management plan (prove you can deliver)
• Past performance (remember case studies beat vague promises)
• Pricing (should be competitive but realistic)

Be mindful of the mistakes that could sink your bid

• Missing small details (page limits, font sizes, exact formatting requirements)
• Generic proposals (remember to tailor each submission to the specific opportunity)
• Underestimating compliance requirements (read the fine print!)
• Waiting until the last minute (SAM.gov can be slow during peak times)

Pro tip: The government cares more about value than just low price. A well-justified higher bid often beats a suspiciously low one.

Step 5: Deliver like a pro (and set up for more work)

Get through the first 90 days

The first few months of a government contract are critical:

• Document everything
• Over-communicate with your contracting officer
• Meet every deliverable on time or early

Understand that compliance is essential

Depending on your contract, you might need to:

• Get DCAA compliant (for DoD work)
• Implement cybersecurity standards
• Maintain specific insurance coverage

Pro tip: Build compliance costs into your bids from the beginning.

Turn a small win into a sustainable business

The real money in government contracting comes from:

• Contract extensions (many opportunities are structured for multiple years)
• Past performance references (it’s gold for winning new work)
• Relationship building (remember contracting officers talk to each other)

How to become a government contractor: Key takeaways

Being a federal contractor isn’t for everyone. It requires patience, attention to detail, and persistence. But if you’re willing to learn the system, it can transform your business. The best course of action is to start small to build your experience, leverage free reliable resources, and not be discouraged–it often takes several attempts to land that first contract.

Remember to chalk out a solid plan:

• Check your eligibility (size standards and NAICS codes)
• Register as a government contractor (set aside 2-3 hours)
• Research opportunities (start small with under $25k “micro-purchases”)
• Network (attend local PTAC events)
• Bid strategically (prioritize quality over quantity)

By understanding this process, you’ll be well on your way to securing contracts that can significantly contribute to your business’s growth and success. So, what are you waiting for? Your first government contract could be just a few months away.

Written by Ramona Sinha. March 28, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.