For businesses looking to diversify their revenue stream or grow their sales, government contracting is a strong path. In 2018, the government posted an average of 2,544 solicitation-related notices per day. (If you’re not familiar with government terms, solicitations are essentially government requests for goods or services.) Additionally, the Government Accountability Office stated that in 2018, more than $550 billion was spent on government contracts for goods and services. To put things into a more recent perspective, the government spent $6.4 billion from February 1 - April 23 of 2020 on COVID-19 response alone. In other words, the government is spending and will continue to spend.
The government has proven to be a reliable customer, and their consistent spending means that government contracting is virtually recession-proof. If you’re considering selling to the government, here are four steps to get you started toward becoming a federal government contractor.
1. Create a SAM User Account.
SAM, or the System for Award Management, is a free website companies use to do business with the government. Businesses use SAM to register their company as an entity, and an account must be made before any business can be done with the government. SAM allows government agencies to search for contractors, or businesses selling to the government, based on information such as size or location.
2. Get Your CAGE Code Assigned.
A Commercial and Government Entity (CAGE) Code is a five-character ID number used within the federal government to identify businesses. Once you register your business in SAM, your information will be submitted to the Defense Logistics Agency (DLA) for CAGE Code assignment. Once your CAGE Code is assigned, SAM applies that ID number to your entity registration.
3. Get Your DD Form 2345 Approved.
The DD Form 2345 is reviewed and certified by the Joint Certification Program (JCP) and allows businesses selling to the government to get access to Department of Defense/Department of National Defense unclassified export controlled technical data. Once your DD Form 2345 is approved, you can bid on a Department of Defense (DOD) solicitation or execute a DOD contract that involves access to this secure information.
4. Obtain a Federal Focus Report.
Once you’ve completed steps 1-3, it’s time to figure out where your company will succeed in government sales. There are 278 different government agencies at the federal level alone. Do you know which ones you will be successful at selling to? That’s where the Federal Focus Report (FFR) comes in. The FFR helps you identify appropriate target agencies, contracting officers, upcoming opportunities, and competitors, leading to a focused government sales plan for your business. With the FFR, your company will have a holistic understanding of how the government is buying your product or service. Need an FFR? Contact us and our research team will put one together for you at a low cost.
These four steps are just the tip of the iceberg when it comes to selling to the government. The process can be intimidating, but there can be big payoffs in the long run. If you’re unsure of where to start or need help becoming a federal government contractor, contact us. Our expert team members are here to guide you throughout every step of the government sales and marketing lifecycle.
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