There is a biblical parable that says, “But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it” (Luke 14:28, NLT).

Whether you share my faith or not, the truth in Luke’s statement is undeniable. It’s especially true in federal contracting.

Never take on a government project for which you do not have enough financial or human capital to complete.

Your access to capital is one of the factors Contracting Officers look at to determine your responsibility as a prospective contractor before awarding contracts to your company.

If you do not have adequate financial resources to perform a contract, or the ability to obtain them, agencies may assign a higher risk level in doing business with you.

It’s one thing to disqualify yourself from an opportunity before you access your ability to perform. It’s quite another to convince yourself to pursue a contract you know you lack the resources to complete successfully.

In the first instance, it’s a lack of confidence or perhaps a lack of clarity in your approach. But in the second instance, it is outright hubris—plain and simple.

You must consider the costs of doing business with the federal government and, more specifically, the costs of working with each agency or subagency.

Every agency has a different mission, budget, and contract requirements. Just because you can perform a contract for one agency doesn’t mean you’ll be successful with others.

Once you understand the costs and know what resources you’ll need to perform, the next step is to register to do business with the federal government.

No duh, right? You already know you must register your company in SAM. That’s nothing new. But what does registering entail?

Getting registered on SAM.gov involves:

• Determining whether you will compete for federal contracts or grants.
• Providing sufficient information to complete your firm’s business profile.
• Selecting the right NAICS codes to define your product or service.
• Identifying applicable product and service codes (PSCs).
• Establishing a comprehensive small business profile.

Registering in SAM is a must if you want to compete for federal contracts. Agencies cannot award your firm a contract unless you have a unique entity identifier, which you will receive when you register.

However, it is equally important to set up your profile so federal agencies can easily find your company.

Are you like most business owners who randomly select NAICS codes, hoping to attract federal buyers? Or do you only provide the minimum information required?

By establishing a comprehensive and complete profile, you help federal agencies find your company through SAM.gov. Moreover, you enable other entities to research you, especially when looking to establish strategic partnerships.

Performing federal contracts is a huge responsibility. It requires a great deal of investment in time, commitment, and human and financial resources.

Like many small businesses, you face challenges capturing contract opportunities due to limited resources, capacity constraints, and a lack of brand awareness. Not being able to obtain loans, bonds, or other sureties can limit opportunities.

However, the right teaming strategy will help you overcome such challenges. You can demonstrate your ability to obtain the necessary resources to perform contracts through subcontracting.

But not just with any firm but rather through strategic partnerships.

Developing strategic partnerships with similarly situated small businesses allows you to leverage other companies’ resources, enhancing your competitiveness and maximizing federal contract opportunities.

The federal government establishes annual goals to set aside 23% of prime contracts to small businesses. To ensure small businesses are the primary beneficiaries of these set-aside dollars, the government places limitations on subcontracting efforts.

Partnering with similarly situated small businesses not only enhances your capacity to deliver on contractual obligations but also enables you to pursue federal contracts more effectively.

The key is establishing these relationships before you start pursuing contract opportunities. Don’t wait until the proposal is due to start looking for businesses to partner with. This approach is certainly not strategic, and the results are rarely promising.

Strategic partnerships are pivotal to competing for federal contracts and exceling in contract performance. By collaborating with like-minded firms, you can leverage collective strengths, mitigate individual weaknesses, and unlock new avenues for success in the federal marketplace.

In the federal contracting arena, competition is fierce, and requirements are stringent. You must understand your company’s capabilities and limitations to have a fighting chance.

Recognizing your unique strengths and weaknesses can be the difference between winning your next contract or coming up short again…and again.

To understand your company’s capabilities and limitations:

1. Identify areas where you excel and target contracts that align with your strengths to increase your chances of winning and positioning your company in the federal marketplace.

2. Be realistic about what your company cannot feasibly deliver and avoid pursuing contracts outside your capacity or expertise. It’ll help reduce the risk of failure or damage to your company’s reputation.

3. Allocate your resources to areas where your company thrives to enhance productivity and maximize the potential for successful outcomes.

When communicating your capabilities to agencies, whether in a Capability Statement or a proposal:

• Be honest and transparent. Acknowledge your limitations upfront. Highlight how you mitigate your limitations through strategic partnerships and innovation.
• Showcase your company’s unique approach to overcoming challenges, using your limitations to drive creative solutions that set you apart from competitors.
• Identify niche markets where your company excels. Focus on specialized knowledge and experiences where you have a competitive edge to convey your limitations as assets rather than liabilities.

Understanding your company’s capabilities and limitations is essential in the competitive landscape of federal contracting. It will help you identify and appeal to your ideal federal buyers more effectively.

Finding the right contract opportunities can be daunting when looking to do business with the federal government. However, a strategic approach to identifying federal agencies that actively buy and use your product or service can increase your chances of success.

Yes. Before competing for federal contract opportunities, you should know which agencies buy what you sell.

Market research is vital to understanding the demand for your product or service within the federal government. Use government databases, such as SAM.gov, USASpending.gov, and FPDS.gov, to identify agencies purchasing similar products or services.

Previous acquisition history provides critical insight into federal spending trends. It will tell you which agencies buy what product or service and the methods used to procure them.

The data tells you when the contract was established and for how long, which helps you understand when the agency may have a need for the product or service in the future.

While researching past contract awards is essential, attending industry days, trade shows, and networking events can often be more beneficial. These events put you in front of your ideal federal buyer, allowing you to establish connections and gain insight into the agency’s procurement needs.

Diligent market research and strategic engagement with federal agencies will help you pinpoint your ideal buyer. By identifying the agencies that purchase or use your product or service, your marketing efforts will be more focused and direct. As a result, your chances of securing federal contracts will increase.

Even if you’ve identified your ideal buyer, you still have to convince the agency that your company can fulfill its needs. You must be able to demonstrate your ability to meet the agency’s 

A proven track record of successful performance shows your ability to meet the agency’s requirements.

So, you want to be a federal contractor.

I mean, you are still reading this article. It’s safe to assume you’re serious about this endeavor.

You understand the costs, risks, effort, and commitment required to succeed. Yet, you’re all in and focused on the right thing—the opportunities.

But before venturing into the complex landscape of government procurement, it is important to establish a strong commercial track record of performance.

Having experience in the commercial market builds credibility and demonstrates your capabilities. It also instills confidence in your ideal buyer. When agencies have a high level of confidence in your ability to perform, they tend to assign lower risk levels.

 A satisfactory record of integrity and business ethics is another factor agencies consider when determining your responsibility as a prospective contractor.

To build the agency’s confidence in your brand, your commercial experience must demonstrate the following traits:

• Business Ethics and Integrity. Prioritize ethical business practices and demonstrate unwavering integrity in all your dealings.

• Quality Products or Services. Consistently deliver high-quality products or services to build a positive reputation in the commercial market.

• Reliability and Dependability. Deliver products and services on time and within budget to reinforce customer trust, credibility, and loyalty.

• Customer-oriented. Understand customer needs and provide exceptional service that carries over to the federal marketplace.

Establishing a track record of performance in the commercial market is crucial to your success in federal contracting. Since there are rules pertaining to contract performance, it’s important to understand the laws, regulations, and policies that govern federal contracting.

In federal contracting, familiarity with laws, regulations, and policies is not just beneficial—it’s imperative.

You don’t need to be a legal expert or memorize every statute verbatim. But you must have a solid comprehension of the governing rules.

Federal regulations exist to ensure fairness, transparency, and accountability. If you understand the rules, you can establish operational parameters to minimize risks of non-compliance.

However, failure to comply with regulatory requirements can have severe consequences. Ignorance is not an excuse.

Demonstrating a solid understanding of the federal acquisition regulation (FAR) and other statutory requirements can establish credibility with Contracting Officers and better position you to navigate complex procurement processes.

Stay current on federal contracting laws, regulations, and policies as you pursue contract opportunities. Don’t hesitate to seek guidance from a legal professional.

Familiarity with federal contracting laws and regulations is not optional—it’s foundational for success.

Make it a habit to research and integrate regulatory requirements into your contracting solution. You must prioritize compliance to maintain a competitive edge in today’s landscape.

Federal contracting is not easy! But it doesn’t have to be overly complicated.

You increase your chances of success in the federal marketplace significantly if you understand the importance of:

• Considering the costs of doing business with the government.
• Registering your company in SAM.
• Developing strategic partnerships with other small businesses.
• Knowing your capabilities and limitations.
• Identifying federal agencies that buy your product or service.
• Establishing a track record of successful performance.
• Being familiar with governing procurement laws and regulations.

Several FREE resources are available to help you navigate federal contracting, such as DoD’s APEX Accelerators and Procurement Center Representatives. These government-led services can help determine if federal contracting is right for your business.

Following the guidance outlined in this article can ease your transition into government contracting, establish credibility with your ideal buyer, and increase your chances of long-term success.