April 2003      Vol. 12, No. 4  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Doing Business with the Federal Government: Is this a Market for Your Business?
If you are online and like to research and sort through technical information, you might be able to do business in the lucrative government procurement industry.


Government procurement is big business – more than $200 billion is spent annually for products and services. The federal government purchases a wide range of products and services, from goods that stock supermarket shelves, computer systems, and meals for the military, to machinery, utensils, multi-media production, and office supplies.

Selling to the federal government can be a large market niche for many small businesses, but it requires research before deciding whether or not to enter.

Working closely with federal agencies and the nation’s leading large contractors, the Small Business Administration (SBA) works to ensure that small businesses obtain a fair share of government contracts and sub-contracts. According to the Small Business Act, 23 percent of all dollars purchased are to come from small businesses and five percent from women-owned businesses.

One thing to remember is that by SBA standards, “small business” is very large. A manufacturing business with fewer than 500 employees may be considered “small.”

When looking to see if there is a place for you in the federal market, consider that this is electronic commerce. You must have email and Internet access. Notification of opportunities for contracts of over $25,000 may be received via email. Contracts under that amount may require direct marketing to federal offices. The government awards all contracts on the basis of competition.

Four steps are basic to understanding the procurement procedure:

  1. Learn about the procurement online market. We provide an extensive list of websites to help you learn more.
  2. Visit websites to learn whether or not there is a place for you to compete.
  3. Register online for bid notification and to be eligible to submit a bid. We include registry sites in the insert mentioned above.
  4. Submit your bid.

Selling to the federal government is, in some ways, similar to selling to the private sector. While federal procurement procedures may have a different set of rules and regulations, many of the same marketing techniques and strategies you already employ may be applicable here. Don’t neglect to use your common business sense.

Here are tips for doing business in the federal procurement arena:

  • Get to know the agency and understand the context in which your product or service could be used.
  • Obtain available information on past awards, quantities, costs, and awarders.
  • Become known to potential purchasers.

As one does research, one should consider working as a subcontractor to a large business that holds a federal contract. Refer to the websites that list subcontracting on the insert for more leads.

 Contact: For questions about selling to the federal government, get in touch with Dwight Johnson at the SBA Office of Government Contracting in Omaha, Dwight.Johnson@sba.gov , 402.221.7206, or Mike Hall at the NBDC Procurement Technical Assistance Center in Omaha, MikeHallNEPTAC@netscape.net , 402.595.3511.
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