FAQ

• Who are the players (and what are their roles)?

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  Office of Management and the Budget:

  OMB assists the President in overseeing the preparation of the Federal budget and evaluates the effectiveness of agency programs, policies, and procedures, and works to make sure that agency reports, rules, testimony, and proposed legislation are consistent with the President's Budget and with Administration policies. In addition, OMB oversees and coordinates the Administration's regulatory, procurement, financial management, information technology, and information management policies.

  Office of Federal Procurement Policy:

  The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget plays a central role in shaping the policies and practices federal agencies use to acquire the goods and services they need to carry out their responsibilities. OFPP was established by Congress in 1974 to provide overall direction for government-wide procurement policies, regulations and procedures and to promote economy, efficiency, and effectiveness in acquisition processes. OFPP is headed by an Administrator who is appointed by the President and confirmed by the Senate.

  Executive branch of the U.S. government and its agencies:

  The executive branch, through all of the various agencies, enters into contracts and expends funds to achieve their congressionally-defined mission. The agencies include:

  • Department of Agriculture (USDA)
  • Department of Commerce (DOC)
  • Department of Defense (DOD)
  • Department of Education
  • Department of Energy (DOE)
  • Department of Heath and Human Service (HHS)
  • Department of Homeland Security (DHS)
  • Department of Housing and Urban Development (HUD)
  • Department of the Interior (DOI)
  • Department of Justice (DOJ)
  • Department of Labor (DOL)
  • Department of State (DOS)
  • Department of Transportation (DOT)
  • Department of Treasury
  • Department of Veterans Affairs

  
  
  

  Independent Agencies of Note:

  
  
  

  General Services Administration (GSA):

  GSA’s mission is to use expertise to provide innovative solutions for our customers in support of their missions and by so doing, foster an effective, sustainable, and transparent government for the American people. Under the GSA Schedules program, GSA establishes long-term government wide contracts with commercial firms to provide access to millions of commercial supplies (products) and services at volume discount pricing.

  Small Business Administration (SBA):

  The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.

  Prime Contractor:

  Chief contractor who has a contract with the government agency administering a project or job, and has the full responsibility for its completion. A prime contractor undertakes to perform a complete contract, and may employ (and manage) one or more subcontractors to carry out specific parts of the contract. Also called prime vendor.

  Subcontractor:

  Works with the Prime Contractor to complete a specified portion of the contract. The subcontractor in most cases reports to the Prime Contractor. The prime contract (i.e. the contract between the government and its contractors) is governed by the federal common law while the contracts between the prime contractor and its subcontractors are governed by the contract law of the respective states.

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• Who benefits from government contracting?

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  The federal government works in conjunction with private businesses to effectively operate on a daily basis. Not only does the government acquire goods and services from private businesses, it also relies heavily on the private sector for research, innovation, and solutions to problems and opportunities that occur every day.

  While the government conducts business with many of the largest companies in the U.S., they also understand the importance of small and medium-sized businesses to the overall health and growth of the U.S. economy. Small and medium-sized business account for the majority of jobs created in the U.S. annually, and are at the forefront of the various U.S. innovation initiatives. Therefore, the U.S. government has rules and guidelines in place to ensure small and medium-sized businesses are able to compete in and benefit from the opportunities provided through government contracting.

  Beneficiaries from this structure include the U.S. government; small, medium and large-sized U.S. businesses; and the U.S. consumer.

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• Who decides the rules of government contracting?

  back to top Office of Federal Procurement Policy: The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget plays a central role in shaping the policies and practices federal agencies use to acquire the goods and services they need to carry out their responsibilities. OFPP was established by Congress in 1974 to provide overall direction for government-wide procurement policies, regulations and procedures and to promote economy, efficiency, and effectiveness in acquisition processes. OFPP is headed by an Administrator who is appointed by the President and confirmed by the Senate. back to top

• Who protects the interest of a small or medium-sized business?

  back to top The Small Business Administration (SBA) Since its founding on July 30, 1953, the U.S. Small Business Administration has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. SBA provides assistances primarily through its four programmatic functions: Access to Capital (Business Financing) SBA provides small businesses with an array of financing for small businesses from the smallest needs in microlending --- to substantial debt and equity investment capital (venture capital). Entrepreneurial Development (Education, Information, Technical Assistance & Training) SBA provides free individual face-to-face, and internet counseling for small businesses, and low-cost training to nascent entrepreneurs and established small businesses in over 1,800 locations throughout the United States and US territories. Government Contracting (Federal Procurement) In keeping with the mandate of Section 15(g) of the Small Business Act, SBA’s Office of Government Contracting sets goals with other federal departments and agencies to reach the statutory goal of 23 percent in prime contract dollars to small businesses. This office also provides small businesses with subcontracting procurement opportunities, outreach programs, and training. Advocacy (Voice for Small Business) Created in 1978, this Office reviews Congressional legislation and testifies on behalf of small business. It also assesses the impact of the regulatory burden on behalf of small businesses. Additionally, it conducts a vast array of research on American small businesses and the small business environment. The Chief Counsel of this office is appointed by the President of the United States. back to top

• Who is responsible for awarding government contracts?

  back to top Executive branch of the U.S. government and its agencies: The executive branch, through all of the various agencies, enters into contracts and expends funds to achieve their congressionally-defined mission. The agencies include: Department of Agriculture (USDA) Department of Commerce (DOC) Department of Defense (DOD) Department of Education Department of Energy (DOE) Department of Heath and Human Service (HHS) Department of Homeland Security (DHS) Department of Housing and Urban Development ((HUD) Department of the Interior (DOI) Department of Justice (DOJ) Department of Labor (DOL) Department of State (DOS) Department of Transportation (DOT) Department of Treasury Department of Veterans Affairs back to top

• What is government contracting?

  back to top Government contracting (also known as procurement) in the United States is a process whereby an agency authorized by the United States government enters into a formal, contractual relationship with one or more business entities. The terms of this contract define the scope of work, delivery schedule, and parties responsible for various aspects of the agreement. The principles governing government contracting are based on many of the same principles as commercial contracting, but are subject to special laws, regulation, and oversight. back to top

• What is the benefit of government contracting?

  back to top U.S. agencies benefit from contracting with private businesses in a number ways. First, private businesses possess a wide range of abilities and skills, and can therefore provide products, services and solutions to address concerns or needs of the federal government. Second, the U.S. government makes contracting opportunities available to bid on by the public, creating a competitive environment that results in better quality, lower prices, and competitive innovation. Finally, as the government provides revenue to the private sector via contract funding, those revenues directly impact and strengthen the U.S. economy, and strengthen the U.S. government as a result. Private businesses can also benefit in numerous ways through government contracting participation. First, the U.S. government as a consumer represents one of the largest purchasing arms in the entire world. A single government contract can represent a significant portion of a company’s annual revenues. Second, the government has policies in place to ensure payments are made in an efficient manner. The U.S. government represents one of the most consistent, stable sources of revenue available to a business. Finally, the U.S. government supports an environment that provides opportunities to all types of businesses, including those that are considered small, disadvantaged, or non-traditional. This environment provides the most opportunity to the most companies by incorporating policies that level the playing field for its participants. back to top

• What are the opportunities for a small business?

  back to top Due to the desire of the U.S. government to ensure small businesses are able to participate in the government contracting arena, legislation has been passed to ensure those business types are not only able to compete, but in certain cases have inherent advantages over larger businesses when attempting to participate in government contracting. The Federal Acquisition Regulation (FAR) and the Small Business Administration (SBA) are two primary components that work to ensure small business interests are protected. FAR contains the regulations that protect small business interests, and the SBA works as an advocate for small businesses ensuring those rules are adhered to. What is the government looking for when they award a contract? In a general sense, the agencies responsible for determining award winners are looking for companies that have the core competencies to execute their contractual obligations, can demonstrate past work experience to validate their abilities, and offer the best value (price plus quality / delivery of goods and/or services). These agencies are responsible (via goals) to encourage participation in government contracting by small businesses. Specifically, each agency has participation goals for the inclusion of small, disadvantaged, minority-owned, women-owned, and veteran / disabled veteran-owned small businesses. Agencies look for businesses that best meet their production and goaling requirements. back to top

• Where are the rules for government contracting?

  back to top https://www.acquisition.gov/ Integrated Acquisition Environment (IAE) Federal Acquisition Regulations (FAR) Link to Agency Supplemental Regulations https://www.acd.osd.mil/dpap Defense Acquisition Regulation Supplement (DFARS) http://www.business.gov SBA Legal & Regulatory Information http://www.sba.gov/training/courses.html SBA E-business Institute (free online courses) back to top

• Where does government contracting money get spent?

  back to top www.usaspending.gov back to top

• When do government contracts get awarded?

  back to top Government contracts are awarded every day. the number of transactions can range from tens to thousands. To see a summary of daily activity, go to www.fbo.gov and use the filters to look at a specific date range of activity. back to top

• When is the best time to get started in government contracting?

  back to top The best answer is - when your company has value to the government and can deliver a product, service or solution they need. External resources (like FedBizAccess) can help you determine if you are prepared to provide value to the agencies responsible for government contracting. Being able to demonstrate value includes multiple components - you start by researching government spending, building your government profile, and establishing your presence and desire to participate in the government contracting arena. Once you have determined the government has a need for what your business offers and you’ve determined your company meets the standards to compete effectively, it is the right time to pursue government contracting. back to top

• When can I get my first government contracting opportunity?

  back to top The answer to this question depends on a lot of variables, including answers to the following questions: What do you do? Does the government have a need for your product, service, or solution? Do you have a proven track record of stability, success, revenue, and references? What is the best way to get started - as a subcontractor or directly with an agency? Have you completed the necessary certifications and registrations to participate in government contracting? FedBizAccess has designed an “Advisor” program to help you determine the quickest path to finding and winning opportunities in the government contracting marketplace. The Advisor looks at your current company profile, then provides guidance to help you progress. back to top

• Why is government contracting a good source of revenue for my business?

  back to top Depending on what your business does, government contracting can be a valuable source of revenue for a number of reasons:

  1. The government pays its bills on time. If you have a contract with the U.S. Government, you will know with certainty when and how much you are going to be paid.
  2. The government can be your largest customer. The U.S. federal government spent over $530 billion last year for federal contracts. They represent one the largest consumers of U.S. goods and services in the world. If you provide goods, services or solutions needed by the government, they can be a great revenue source.
  3. Government spending consistent in volatile markets. Over the last 10 years, government spending has increased dramatically (from $205 billion in 2000 to $537 billion in 2010). During this time, the U.S. economy and private business sectors have experienced significant volatility. By contrast, the U.S. government has continued to increase spending over that same timeframe.
  4. Government contracting revenues can last indefinitely. If your company can continue to offer value to the U.S. government, the U.S. government will likely continue to come back to you as a contracting resource. The result can be a long-term relationship that provides consistent, sustainable revenue for your company.

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• Why are small businesses given special considerations for government contracting?

  back to top SMALL BUSINESS ACT (Public Law 85-536, as amended) § 1. This Act may be cited as the “Small Business Act.” § 2. (a) The essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation. http://www.sba.gov/sites/default/files/tool_serv_sbact.pdf back to top

• Why should my business consider participating in government contracting?

  back to top Depending on what your business does, government contracting can be a valuable source of revenue for a number of reasons: 1. The government pays its bills on time. If you have a contract with the U.S. Government, you will know with certainty when and how much you are going to be paid. 2. The government can be your largest customer. The U.S. federal government spent over $530 billion last year for federal contracts. They represent one the largest consumers of U.S. goods and services in the world. If you provide goods, services or solutions needed by the government, they can be a great revenue source. 3. Government spending consistent in volatile markets. Over the last 10 years, government spending has increased dramatically (from $205 billion in 2000 to $537 billion in 2010). During this time, the U.S. economy and private business sectors have experienced significant volatility. By contrast, the U.S. government has continued to increase spending over that same timeframe. 4. Government contracting revenues can last indefinitely. If your company can continue to offer value to the U.S. government, the U.S. government will likely continue to come back to you as a contracting resource. The result can be a long-term relationship that provides consistent, sustainable revenue for your company. If your business successfully secures and performs on a government contract, you will be able to add that experience to your company’s resume. back to top

• How do I become registered to participate in government contracting?

  back to top There are a number of steps to take in order to get registered to do business with the government, including: Central Contractor’s Registration (CCR), Dunn and Bradstreet (DUNS) number, CAGE Code, North American Industry Classification System (NAICS) codes, and Online Representations and Certifications Application (ORCA) By registering on FedBizAccess and adding or claiming your company, our “FBA Advisor” will guide you through these steps to ensure you are fully eligible to participate in government work. back to top

• How does government contracting work?

  back to top A number of cost thresholds exist that trigger increasing degrees of complexity in the acquisition process. These thresholds include the micro-purchase threshold, the simplified acquisition threshold, and the commercial items threshold. The micro-purchase threshold, as of August 2007, is generally $3,000, with some exception. No competition or publication requirements are mandated for micro-purchases; generally, the Government Commercial Purchase Card (GCPC) can be used for these purchases under FAR Part 13. From $3,000 to $100,000, agencies may make use of simplified acquisition procedures under FAR Part 13. Blanket purchase agreements, basic ordering agreements, or other contracts may be awarded under simplified procedures, which allow supplies or services to be ordered at a predetermined fair and reasonable price. The simplified acquisition threshold can be increased in certain situations specified in FAR Part 13. For standard contracts equal to or exceeding $100,000, the following process takes place: Acquisition Planning & Market Research Oral Presentations (if required) Negotiations (if required) Award Debriefing (Negotiated acquisitions, if requested) Subcontracting Plan Final Approval (Large business only, if required) Solicitation Advertised Electronically Solicitation Issued Electronically Submit Bids/Proposals Electronically Bids/Proposals Evaluated Performance & Successful Completion back to top

• How does a small or medium-sized business effectively compete for federal contracts?

  back to top The three main factors that help small business compete for federal contracts are socioeconomic criteria, set-asides, and subcontracting requirements. Socioeconomic criteria: Socioeconomic criteria are specific attributes administered and regulated by the SBA that are used to classify your business. These socioeconomic “indicators” are used by the federal government in determining goals for diversity in federal contract awards. The current socioeconomic programs / options include: HUBZone Certification 8(a) Business Development Small Business Certification Women-Owned Small Business Federal Contract Program Veteran & Service-Disabled Veteran Owned Native Americans Alaskan Owned Corporations Native Hawaiian Owned Corporations Set-asides: The purpose of small business set-asides is to award certain acquisitions exclusively to small business concerns. A “set-aside for small business” is the reserving of an acquisition exclusively for participation by small business concerns. A small business set-aside may be open to all small businesses. A small business set-aside of a single acquisition or a class of acquisitions may be total or partial. Subcontracting requirements: A Small Business Subcontracting Plan is required: • From large businesses, when work is performed in U.S., not personal services, • Contracts or modifications >$650,000 ($1.5M for construction), if subcontracting possibilities, • Must be approved before award, • Includes small business goals and designated Small Business Liaison Officer (SBLO) Through the utilization of socioeconomic indicators, the understanding and review of contracts “set-aside” exclusively for small businesses, and the requirement of large Prime Contractors to implement and develop subcontracting plans and relationships, small businesses are able to effectively compete in the government contracting arena. back to top

• How does the government decide which company / companies to award a contract to?

  back to top In a general sense, the agencies responsible for determining award winners are looking for companies that have the core competencies to execute their contractual obligations, can demonstrate past work experience to validate their abilities, and offer the best value (price plus quality / delivery of goods and/or services). These agencies are responsible (via goals) to encourage participation in government contracting by small businesses. Specifically, each agency has participation goals for the inclusion of small, disadvantaged, minority-owned, women-owned, and veteran / disabled veteran-owned small businesses. Agencies look for businesses that best meet their production and goaling requirements. back to top

• How do I find out which government agencies buy my products / services?

  back to top There are a number of ways to approach this question. In a general sense you can get an idea of the budget focus for each agency by reviewing spending forecasts. Each agency documents where they plan to spend money in the current and upcoming fiscal years. Department of Agriculture: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/agriculture.pdf Department of Commerce: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/commerce.pdf Department of Defense: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/defense.pdf National Intelligence Program: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/intelligence.pdf Department of Education: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/education.pdf Department of Energy: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/energy.pdf Department of Health and Human Services: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hhs.pdf Department of Homeland Security: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/homeland.pdf Department of Housing and Urban Development: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hud.pdf Department of the Interior http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/interior.pdf Department of Justice: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/justice.pdf Department of Labor: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/labor.pdf Department of State: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/state.pdf Department of Transportation: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/transportation.pdf Department of the Treasury http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/treasury.pdf Department of Veterans Affairs http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/veterans.pdf Overseas Contingency Operations: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/overseas.pdf Corp of Engineers - Civil Works: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/corps.pdf Environmental Protection Agency: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/epa.pdf National Aeronautics and Space Administration: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/nasa.pdf National Science Foundation: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/nsf.pdf Small Business Administration: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/sba.pdf Social Security Administration: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/ssa.pdf Corporation for National Community Service: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/service.pdf Beyond the overview of agency spending, it will probably be in your best interest to receive consultation from an outside entity to narrow down your focus. Success in government contracting has a lot to do with having a niche, finding a need, and developing a relationship. Repeat that process, and you’ll likely find success. Use the free FedBizAccess Profile and Advisor tools to help you start narrowing your focus. back to top