How to Get Government Contracts: A Step-by-Step Guide for Small Businesses

How government contracting works for small businesses

The federal government buys under written rules, mainly the Federal Acquisition Regulation (FAR) and each agency’s supplement to it. An agency describes what it needs, businesses respond, and a contracting officer awards the contract using the criteria the solicitation spelled out. There is no application to “become” a contractor; you become one by winning an award.

Small businesses have a structural advantage. By law, the government aims to award at least 23% of prime contract dollars to small businesses each year, with further goals of 5% for women-owned, 5% for service-disabled veteran-owned and 3% for HUBZone small businesses. In fiscal year 2025, SBA reported that agencies sent nearly 28% of prime contract dollars, about $179 billion, to small businesses.

Two mechanisms do most of that work. Set-asides limit a competition to small businesses, or to a certified group such as women-owned firms. Simplified acquisition lets agencies buy smaller amounts with lighter procedures. A new contractor can use both.

The dollar thresholds worth knowing

• Micro-purchase threshold: $15,000. Below it, a buyer can purchase without collecting competing quotes, often with a government purchase card.
• Simplified acquisition threshold: $350,000. Up to this amount agencies can use simplified procedures, and purchases above the micro-purchase level are generally reserved for small businesses when the contracting officer expects at least two of them to compete on price and quality.
• Above the simplified acquisition threshold. Larger buys use fuller procedures, but many are still set aside for small businesses after market research.

Both thresholds rose on October 1, 2025, from $10,000 and $250,000, under the FAR Council’s five-year inflation adjustment.

Step 1: Set up a business that can take federal work

You don’t need a particular entity type to become a government contractor. Sole proprietors can register in SAM.gov and win awards. Many owners still form an LLC or corporation for liability protection and cleaner books; our guide on whether you need an LLC covers the trade-offs, and how to start an LLC for government contracts walks through the filing.

Before you register anywhere, get these in place:

• A legal name and physical address. SAM.gov validates both, and a post office box can’t be your physical address.
• A taxpayer identification number. Most businesses use an EIN from the IRS. The name tied to it must match what you enter in SAM.gov exactly.
• A business bank account. Federal payments go by electronic funds transfer, so registration asks for routing and account numbers.
• Bookkeeping that tracks job costs. You will price bids from your real labor, materials and overhead, so you need numbers you trust.

Step 2: Register in SAM.gov and get your UEI

SAM.gov is the government’s registration system. Registering assigns your Unique Entity ID (UEI), the identifier that replaced the DUNS number in April 2022, plus a CAGE code. It is also where you make the representations and certifications agencies rely on when they award to you.

• It’s free. There is no charge to get a UEI, register or renew.
• Choose an “All Awards” registration. That type lets you bid on contracts; the “Financial Assistance Only” type is for grants and loans.
• Allow at least ten business days. SAM.gov tells new registrants to plan for that long after submitting, and longer if your tax ID or CAGE validation fails.
• Renew every 365 days. A lapsed registration can keep you from receiving an award, so put the date on your calendar.

The form asks for your NAICS codes, size information, banking details and points of contact. It also asks whether you accept credit cards. If you can, say yes: many small federal purchases are paid with a government purchase card. Our SAM.gov registration guide goes field by field.

Step 3: Choose NAICS codes and confirm you count as small

NAICS codes describe industries. Every federal solicitation is assigned one NAICS code, and that code’s SBA size standard decides whether you count as small for that bid. A janitorial company will usually live under 561720 (Janitorial Services); an IT services firm might list 541512 (Computer Systems Design Services) and a few related codes.

Size standards are set as average annual receipts or as a number of employees, depending on the industry. For receipts, SBA generally averages your latest five completed fiscal years; for employees, the average over the past 24 months. You can be small under one code and not under another, so check each code you list.

1. Start from work you’ve actually done. Agencies care about relevant experience, so lead with codes that match your revenue today.
2. See how buyers classify that work. Search past awards for your service and note which codes contracting officers used.
3. Keep the list short. A primary code plus a handful of secondary ones keeps your searches and your capability statement focused.

In August 2026 SBA proposed regrouping size standards into broader industry categories and raising some limits. It is a proposal, not a final rule, so confirm the current table before you represent your size. The NAICS code guide covers the selection process in detail.

Step 4: See which set-asides and SBA certifications fit

Being small opens the first door: small business set-asides. SBA certifications open narrower doors with fewer eligible competitors. You don’t need any certification to bid on small business set-asides or on open competitions.

The 8(a) program has changed more than any other. A final SBA rule effective September 10, 2026 removed the presumption of social disadvantage for individually owned firms, so applicants now have to document it with evidence. Firms owned by tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations are not affected by that change. If 8(a) is on your list, talk to an APEX Accelerator counselor before you apply.

For eligibility details, see SBA certifications and how small business set-asides work.

Step 5: Find federal contracts for small business that match your work

SAM.gov Contract Opportunities is the main federal listing. Agencies generally must post contract actions expected to exceed $25,000 there. Anyone can search; a free account lets you save searches, get email alerts and follow notices so you see amendments.

• Filter hard. Search by your NAICS codes, the set-aside types you qualify for, place of performance and notice type.
• Watch sources sought notices. They are market research, not solicitations, but answering one can help persuade a contracting officer to set the real buy aside for small businesses.
• Read agency forecasts. Acquisition.gov links to each agency’s procurement forecast of upcoming buys.
• Study past awards. Contract award data, which now lives in SAM.gov (sign-in required) since FPDS’s public search closed in February 2026, and USAspending.gov show who won similar work, for how much and when it ends.

Many purchases under $25,000 never reach SAM.gov at all; a buyer may simply ask a few vendors for quotes. That is why a complete SAM.gov profile, a capability statement and a relationship with an agency’s small business office matter even before you see a posting.

If daily searching turns into a chore, tools like BidForge watch SAM.gov and score new notices against your NAICS codes, certifications and past work, then send a weekday briefing. Either way, our guide on how to find government contracts covers searching, reading notices and deciding what to bid.

Step 6: How to bid on government contracts

Solicitations come in a few forms. A request for quotation (RFQ) is common for simpler buys and is often decided mostly on price. A request for proposal (RFP) is used for negotiated buys and usually includes a technical evaluation. An invitation for bid (IFB) is a sealed-bid process won by the lowest responsive, responsible bidder. The government contracting glossary explains these and other terms.

Read the whole solicitation before you write

Note the due date, time and time zone; how to submit; the question deadline; and every attachment. Many RFPs put proposal instructions in a Section L and evaluation criteria in a Section M; commercial buys often put the same content in an instructions provision and an evaluation provision. Find both either way.

Turn the instructions into a checklist

List every requirement, page limit and format rule, then map each one to the place in your response that answers it. A proposal that ignores an instruction can be rejected without being evaluated. Proposal tools such as BidForge build this compliance matrix from the solicitation and recheck the draft as you edit, but you still review and submit it yourself.

Price from real costs

Build the price from labor, materials, overhead and profit. Service solicitations often include a wage determination that sets minimum pay and benefits for some job categories, and your price has to cover it. Bidding below cost to win can leave you with a contract that loses money every month.

Submit early and watch for amendments

Agencies change solicitations through amendments, which you often must acknowledge. Upload a day early, confirm receipt, and remember that late offers are generally not accepted. Our guide on how to write a government proposal goes deeper on structure and review.

Step 7: Build past performance and relationships

Past performance is the government’s main way to judge risk. In negotiated competitions an offeror with no relevant record can’t be rated favorably or unfavorably on that factor, so having none does not disqualify you. A solid record still helps, and you can build one several ways:

• Use your commercial and state or local work. The FAR lets agencies consider private and non-federal references when they are relevant.
• Subcontract to a prime. Under SBA rules, a small first-tier subcontractor on a prime contract with a subcontracting plan can request a past performance rating from the prime and use it in its own bids.
• Team or form a joint venture. The SBA Mentor-Protégé Program lets a small protégé and an experienced mentor form a joint venture that can bid on set-asides the protégé qualifies for.
• Market before the posting. Send a one-page capability statement to agency small business offices, attend industry days and answer sources sought notices in your codes.

Our guide to winning your first federal prime contract covers these strategies in depth.

How to get government contracts faster: free help and mistakes to avoid

You don’t have to learn all of this alone. APEX Accelerators, formerly known as PTACs, are funded through the Department of Defense and provide mostly free, one-on-one help with registration, finding bids and reviewing proposals. Small Business Development Centers, Women’s Business Centers and Veterans Business Outreach Centers also counsel contractors. See free government contracting help to find yours.

The same mistakes sink new contractors again and again:

• Bidding on everything. Ten focused bids usually teach you more than fifty scattered ones.
• Letting SAM.gov lapse. An expired registration can cost you an award you already won.
• Missing an amendment. Follow every notice you bid on so changes reach you.
• Ignoring format rules. Page limits, fonts and file types are requirements, not suggestions.
• Pricing without the wage determination. On service work, it sets a floor your price must cover.

Frequently asked questions