Getting Started with Government Contracts: Complete Guide
Learn how to start bidding on government contracts. Step-by-step guide covering registration, certifications, finding opportunities, and winning your first contract.
Government contracting represents one of the largest market opportunities for businesses in the United States. With over $600 billion in contracts awarded annually, both federal and state governments purchase everything from IT services to janitorial supplies from private companies.
The best part? Government agencies are required to give preferential treatment to small businesses, with set-asides and programs designed specifically to help small contractors compete and win contracts. Whether you are a solo consultant or a growing company, government contracts can provide stable, recurring revenue.
This guide will walk you through everything you need to know to get started with government contracting, from initial registration to winning your first contract.
Government contracts offer several advantages over traditional commercial work:
Stable Payment: Government agencies are reliable payers. Once you complete the work, payment is virtually guaranteed (though it may take 30-60 days).
Recurring Revenue: Many government contracts include option years, providing 3-5 years of predictable revenue from a single win.
Small Business Advantages: Unlike commercial markets where you compete against huge corporations, government contracting has set-aside programs that reserve contracts exclusively for small businesses.
Market Size: The federal government alone spends over $600 billion annually, with state and local governments adding hundreds of billions more. Nearly every product and service category has opportunities.
Growth Potential: Start with smaller contracts to build past performance, then use that track record to compete for larger opportunities.
Key Tips:
- Start with contracts under $250,000 where competition is lighter
- Focus on agencies that align with your expertise
- Build relationships with contracting officers at target agencies
Before you can bid on government contracts, you'll need to complete several registrations. The process can take 2-4 weeks, so start early:
SAM.gov Registration (Required for Federal)
SAM.gov (System for Award Management) is the master database for federal contractors. You'll need:
- DUNS number (now called UEI - Unique Entity Identifier)
- Tax ID (EIN)
- Bank account information
- NAICS codes for your business categories
- Processing time: 7-10 business days
State Portal Registration (Required for State/Local)
Each state has its own vendor registration portal. Visit our state portals directory to find your state's registration system. Most states require:
- Business license
- W-9 form
- Insurance certificates
- State tax ID
Beta.SAM.gov Login.gov Account
You'll need a Login.gov account to access SAM.gov and federal contracting systems. Set this up first as it is required for most federal systems.
Key Tips:
- Set aside 3-4 hours to complete SAM.gov registration
- Keep your SAM registration active by renewing annually
- Use the same email address for all government registrations
Small business certifications give you access to set-aside contracts with reduced competition. You do not need certifications to bid, but they significantly improve your chances.
SBA Small Business Size Standards
First, confirm you qualify as a small business under SBA size standards. These vary by NAICS code and are based on either:
- Annual revenue (typically $7.5M - $41.5M depending on industry)
- Number of employees (typically 500-1,500 employees)
Set-Aside Certifications
Consider applying for these certifications if eligible:
- 8(a) Business Development Program: For disadvantaged businesses, offers sole-source contracts up to $4M and exclusive bidding opportunities
- HUBZone: For businesses in historically underutilized zones, check the HUBZone map
- Women-Owned Small Business (WOSB): For businesses at least 51% owned by women
- Service-Disabled Veteran-Owned (SDVOSB): For businesses owned by veterans with service-connected disabilities
Key Tips:
- Apply for certifications before you need them - processing can take 30-90 days
- Start with the easiest certification you qualify for to start bidding on set-asides
- Maintain documentation to prove your eligibility (ownership records, tax returns, etc.)
Once registered, you can start finding opportunities. Government agencies post all contract opportunities publicly, so you have the same access as large corporations.
Federal Opportunities
- SAM.gov Contract Opportunities: The main federal marketplace (formerly FedBizOpps)
- GSA eBuy: For GSA Schedule holders
- Agency-specific portals: Some agencies like DOD have their own systems
State & Local Opportunities
Each state has its own procurement portal where agencies post bid opportunities. Visit our states directory to find:
- State procurement portals
- Registration requirements
- Active bid opportunities
- State-specific set-aside programs
How to Search Effectively
Filter opportunities by:
- NAICS codes that match your business
- Contract size (start with under $250K)
- Set-aside type (if you are certified)
- Location (some contracts require local presence)
Market Research
Don't just search randomly. Research agencies that frequently buy your products/services:
- Review past awards on USAspending.gov
- Identify agencies with high spending in your categories
- Check agency forecast websites for upcoming opportunities
Key Tips:
- Set up saved searches with email alerts on SAM.gov
- Focus on 2-3 agencies rather than trying to bid on everything
- Look for contract re-competes where incumbent pricing is public
Government bids can be intimidating, but start with smaller opportunities to learn the process.
Read the Solicitation Carefully
Every bid includes a solicitation document that tells you exactly what the government wants. Key sections:
- Statement of Work (SOW): What needs to be done
- Evaluation criteria: How they'll score bids
- Submission requirements: What documents to include
- Deadline: When to submit (often non-negotiable)
Respond to Every Requirement
Government evaluators cannot make assumptions. If they ask for three references, provide exactly three references. If they want a compliance matrix, include it. Missing requirements can get you disqualified.
Pricing Strategies
- For new contractors, competitive pricing is crucial
- Research what similar contracts awarded for (check USAspending.gov)
- Factor in all costs: labor, materials, overhead, profit
- Consider bidding at cost or low margin on your first contract to build past performance
Submission
Most bids are submitted electronically through:
- SAM.gov (federal)
- State procurement portals (state/local)
- Agency-specific systems
Submit early to avoid last-minute technical issues. Agencies cannot accept late submissions, even by one minute.
Key Tips:
- Use the government's evaluation criteria as an outline for your proposal
- Have someone else review your bid before submission
- Save all bid documents - you can reuse sections for future opportunities
If You Win
Congratulations! Here's what happens next:
Performance Tips
- Communicate proactively with the contracting officer
- Document everything
- Submit invoices promptly (use the prescribed format)
- Meet all deadlines
- Ask questions if anything is unclear
If You Don't Win
Don't get discouraged. Winning rates for new contractors average 5-10%. Here's what to do:
Use our GovContractScout platform to find opportunities matched to your business and track your pipeline.
Key Tips:
- Your first contract builds the past performance needed for bigger wins
- Consider subcontracting on larger contracts while building your track record
- Join industry days and networking events to meet contracting officers
Once you have won your first contract, focus on building a sustainable government contracting business:
Build Past Performance
Your past performance record is your most valuable asset. Perform well on every contract, even small ones, to build the track record needed for larger opportunities.
Expand Certifications
Add more certifications to access more set-aside opportunities. The 8(a) program is particularly valuable for competitive advantages.
Get on GSA Schedule
A GSA Schedule allows federal agencies to purchase from you without full competitive bidding. Learn more in our GSA Schedule guide.
Network with Agencies
Attend industry days, small business conferences, and agency outreach events. Building relationships with contracting officers and program managers increases your win rate.
Consider Teaming
Partner with other contractors as a prime or subcontractor. Teaming allows you to bid on larger contracts and gain experience in new areas.
Use Technology
Government contracting involves tracking many opportunities, deadlines, and requirements. Tools like GovContractScout can help you stay organized and find the best opportunities for your business.
How long does it take to win your first government contract?
Most new contractors bid on 5-15 opportunities before winning their first contract, which typically takes 6-12 months from starting the registration process. However, this varies widely based on your industry, competition, and bid quality. Some contractors win within 3 months, while others take 18+ months.
Do I need special certifications to bid on government contracts?
No, you can bid on unrestricted (full and open) contracts without any certifications. However, small business certifications like 8(a), HUBZone, WOSB, or SDVOSB give you access to set-aside contracts with less competition, significantly improving your chances of winning.
How much does SAM.gov registration cost?
SAM.gov registration is completely free. The government never charges for registration. Be cautious of third-party services that charge fees to help with registration - you can complete the process yourself for free at SAM.gov.
What is the easiest type of government contract to win as a beginner?
Start with smaller contracts under $250,000, preferably set-aside for small businesses in your certification category. Service contracts are often easier to win than product contracts because they require less capital investment. State and local contracts can also be less competitive than federal contracts.
Can I bid on government contracts as a sole proprietor or do I need to incorporate?
You can bid as a sole proprietor, LLC, corporation, or partnership. However, most contractors incorporate (LLC or corporation) for liability protection and to appear more established to evaluators. Some certifications like 8(a) require specific ownership structures.
How does government payment work?
Government agencies typically pay within 30 days of receiving a proper invoice, though it can take up to 60 days. Payment is reliable once invoices are accepted. You'll need your banking information registered in SAM.gov for electronic payment. Some contracts offer progress payments or advance payments for small businesses.
What if I bid too low and can't perform the contract profitably?
Unfortunately, you're still obligated to perform at the bid price. Government contracts are legally binding. This is why accurate cost estimation is critical. If you genuinely cannot perform, you can discuss options with the contracting officer, but this damages your past performance record. Always include contingencies in your pricing.
Do I need a security clearance to work on government contracts?
Most government contracts do not require security clearances. Clearances are primarily needed for classified defense and intelligence work. However, you may need to pass a background check for certain contracts. The solicitation will always state if clearances are required.
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