Government Contracting 101: Your First Steps to Federal Revenue

The U.S. government is the largest buyer of goods and services in the world, spending over $600 billion annually on contracts. For small businesses, this represents an enormous opportunity—but getting started can feel overwhelming. This guide breaks down exactly what you need to do to enter the federal marketplace.

Why Sell to the Government?

Before diving into the how, let's talk about the why. Government contracts offer several unique advantages:

• Reliable payment: The government pays its bills. Net 30 is standard, and payment issues are rare.
• Long-term relationships: Once you're in, repeat business is common.
• Set-asides for small business: 23% of federal contracts are reserved for small businesses.
• Predictable processes: While complex, the rules are published and consistent.

Step 1: Get Your DUNS Number (Now UEI)

The first thing you need is a Unique Entity ID (UEI), which replaced the DUNS number in 2022. This 12-character identifier is free and required for all federal contracting.

To get your UEI, register at SAM.gov. The process takes about 10 minutes, and you'll receive your UEI immediately.

Step 2: Register in SAM

The System for Award Management (SAM) is the federal government's vendor database. You cannot bid on contracts without an active SAM registration.

Key things to know about SAM:

• Registration is free—never pay a third party to do this for you
• Processing takes 2-8 business days
• You must renew annually
• Your registration must be "active" to bid on contracts

Step 3: Determine Your NAICS Codes

North American Industry Classification System (NAICS) codes describe what your business does. You'll select these during SAM registration, and they determine which contracts you can bid on.

Most businesses have 1-5 NAICS codes. Choose codes that:

• Accurately describe your primary business activities
• Have strong contracting opportunities
• Match your size standards for small business set-asides

Step 4: Find Contracting Opportunities

Once you're registered, you need to find opportunities. The main platforms are:

• SAM.gov: The primary source for federal contracts over $25,000
• SubNet: For subcontracting opportunities
• Agency-specific portals: Like DIBBS for DLA contracts

Step 5: Understand the Competition

Before bidding, research your competition. Use USAspending.gov to see:

• Who wins contracts in your NAICS codes
• What prices they're charging
• Which agencies buy what you sell

Common Beginner Mistakes

Avoid these pitfalls that trip up new contractors:

• Bidding on everything: Focus on opportunities that match your capabilities
• Ignoring set-asides: If you qualify for small business programs, use them
• Pricing too low: Government buyers care about value, not just the lowest price
• Missing deadlines: Late proposals are automatically rejected

Next Steps

Getting started in government contracting takes patience, but the rewards are worth it. Start with SAM registration this week, then begin researching opportunities in your industry.

For businesses interested in Defense Logistics Agency contracts specifically, our DLA course provides step-by-step guidance through the entire process—from DIBBS navigation to winning your first award.

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