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6 Tips for Procuring Government Contracts if you are a Small Veteran Owned Business

6 Tips for Procuring Government Contracts if you are a Small Veteran Owned Business

April 23, 2024

The United States government is the world's largest purchaser of goods and services ensuring small businesses are awarded 23% of federal contracting dollars annually. Here are six tips for procuring government contacts if you are a Veteran Owned Small Business (VOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB).

First, you want to ensure your business qualifies as a “Veteran Owned Small Business” or “Service-Disabled Veteran-Owned Small Business” for government contracting by way of the size standard tools provided by the Small Business Association (SBA).

To become certified with the SBA as a VOSB or SDVOSB, your company must meet these criteria:

  • Be considered a small business, as defined by the size standard corresponding to any North American Industry Classification System (NAICS) code listed in the business’s System for Award Management (SAM) profile. The SBA generally categorizes a small business as a manufacturing company with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million.
  • Must not have less than 51% of the business owned and controlled by one or more veterans.
  • To be certified as an SDVOSB, you must have no less than 51% of the business owned and controlled by one or more veterans rated as service-disabled by the VA.
  • For veterans who are permanently disabled and can’t manage the business’s daily operations, their company can still qualify if their spouse or appointed caregiver is helping to manage the business affairs.
  • To see a complete list of eligibility requirements, refer to the Federal Register.

Register with the System for Award Management (SAM)

To be eligible to bid for government contracts, you are required to register your business in the federal government’s System for Award Management. SAM is a database that government agencies use to locate contractors. Once registered, you create an in-depth and accurate business profile.

The Small Business Administration describes your small business profile in SAM as "like a resume." Therefore, you want to ensure your profile is comprehensive and detailed so it can be found during searches by government agencies.

You also want to learn about the types of available contracts for small businesses. These include sole-source set-aside contracts, joint ventures, and competitive set-aside contracts.

Networking with other small veteran-owned businesses

Consider seeking events focusing on government contracting or government-related procurement of goods and services in general. At these events, you may get to meet and interact with other veteran-owned small business owners who have experience researching, identifying, and bidding on contracts. No matter how much you learn about something from books or in school, there are nuances when dealing with the real world that can only be learned through experience, either through you or through word of mouth from a networking contact. This is one way networking could be highly beneficial.

Identifying government purchasing trends

According to Bloomberg, the federal government is expected to see record contract spending, potentially surpassing $750 billion. Spending drives growth, IT, and R&D, where trends can be realized and are ones that prospective small business owners may want to keep an eye on. Some of these include:

  • Contract Spending Trends

There have been noticeable increases in best-in-class (BIC) contract spending, which helps to speed up procurement and keep pricing consistent.

  • Funding for outdated IT

There are 24 major government agencies, all regularly vying for an IT makeover. Government agencies typically spend over $100 billion annually on their IT. Outdated IT systems create costly maintenance issues and lead to cybersecurity vulnerability, among other problems.

  • Staying compliant within an evolving landscape

As the world and policy change and evolve, contractors must review their ability to manage unexpected disturbances in the supply chain, environment-related risks and blowback, and the capability to navigate litigation should something arise. Pushes for new policy and change are a regularly occurring theme with predictable and unforeseen implications.

Consult a financial professional

Procuring government contracts as a VOSB or SDVOSB has the potential to be beneficial. Still, like anything else, without the proper research, planning, and forecasting, you could find yourself swimming in a sea of financial problems and operating challenges. A financial professional can help to guide you in a direction that works for you and your business.

 


Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

Sources:

Basic requirements | U.S. Small Business Administration (sba.gov)

How to Procure Government Contracts for Your Veteran-Owned Small Business (linkedin.com)

HOW TO: Government Contracting for Your Veteran-owned Business | U.S. Small Business Administration (sba.gov)

Trends in Government Contracting | Bloomberg Government (bgov.com)

Veteran contracting assistance programs | U.S. Small Business Administration (sba.gov)

This article was prepared by LPL Marketing Solutions

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