Government Contracting 101

Are you new to the Government Contracting market?

If so, there are a few essential things to know before you begin.

The government is not just one entity. Federal, State, and Local government agencies have their own unique policies and buying practices, and you will want to know as much as you can about your potential customer.

The federal government is the largest purchaser of goods and services in the world, and they buy almost everything. California is one of the top states for federal contract spending, with approximately $50 billion annually spent with California-based firms.

You must be registered with the appropriate government entity

  • Federal Government: www.SAM.gov
  • California State Government: www.caleprocure.ca.gov
  • Local Government: Registration systems vary; look up the relevant procurement site, or ask a PTAC Counselor for specific guidance.

Get Certified

There are many small business certifications that you may qualify for. The following is a list of these certifications and basic requirements for each.

Federal Small Business Programs

SMALL BUSINESS (SB) – Located in U.S, organized for profit, independently owned & operated, not dominant in field of operations in which it is bidding on Government contracts, AND meets Small Business Administration (SBA) size standards. Size standard is based upon the North American Industrial Classification Standard (NAICS) assigned to the specific procurement dependent upon product/service purchased. More information can be found at www.sba.gov.

WOMAN-OWNED SMALL BUSINESS (WOSB) – Small Business, at least 51% owned by a woman or women. Management & daily business operations must also be controlled by women owners.

8(A) SMALL DISADVANTAGED BUSINESS – The 8(a) Business Development Program is available to socially and economically disadvantaged individuals.  If accepted into the program, 8(a) certification can only last for a period of 9 years, but allows agencies to make sole-source awards.

HISTORICALLY UNDERUTILIZED BUSINESS ZONE (HUBZONE) – Small Business, owned & controlled at least 51% by U.S. citizens, SBA-certified as a HUBZone concern (principal office located in a designated HUBZone & at least 35% of employees live in a HUBZone).

SERVICE-DISABLED VETERAN OWNED SMALL BUSINESS (SDVOSB) and VETERAN-OWNED SMALL BUSINESS (VOSB) – Small Business, veteran-owned as defined in 38 USC 101(2), at least 51% owned by 1 or more veterans, with management/daily operations controlled by 1 or more veteran owners. For SDVOSB, veteran owner(s) must have a 0% – 100% service-connected disability as defined in 38 USC 101(16) & documented on DD 214 or equivalent. In the case of veteran with permanent & severe disability, the spouse or permanent caregiver of such veteran may also qualify.

California State Small Business Programs (more info at http://www.dgs.ca.gov/pd/Programs/OSDS.aspx

SMALL BUSINESS (SB) – In order for a small business to be eligible for certification, the small business must meet the following requirements:

Be independently owned and operated; not dominant in field of operation;  principal office located in California; Owners (officers, if a corporation) domiciled in California; and, including affiliates, be either,

  • A business with 100 or fewer employees; an average annual gross receipts of $15 million or less, over the last three tax years;
  • A manufacturer with 100 or fewer employees; or,
  • A microbusiness. A small business will automatically be designated as a microbusiness, if gross annual receipts are less than $3,500,000; or the small business is a manufacturer with 25 or fewer employees.

DISABLED VETERAN BUSINESS ENTERPRISE (DVBE) – To be certified as a DVBE, your firm must meet the following requirements: Business must be at least 51% owned by one or more disabled veterans; daily business operations must be managed and controlled by one or more disabled veterans

For DVBE certification purposes, a “disabled veteran” is:

  • A veteran of the U.S. military, naval, or air service.
  • The veteran must have a service-connected disability of at least 10% or more.
  • The veteran must reside in California.

DISADVANTAGED BUSINESS ENTERPRISE (DBE) – DBE is a US Department of Transportation Program administered by state and local transportation agencies, primarily used in transportation infrastructure projects.

DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations. African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged.  Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis. For more information, visit: http://www.dot.ca.gov/obeo/index.html.