Succeed in Government Contracting: Harness Spend Research

If you're a small business owner wondering if the world of government contracting is a viable opportunity for your product or service, you're in the right place. In this article, we will walk you through the essential steps to determine whether government contracting aligns with your business goals. 

The Small Business Administration (SBA) has been actively encouraging small businesses to engage with both federal and local governments in the realm of government contracting. However, it's vital to recognize that government contracting isn't for everyone. Several factors come into play, such as government spending in your business industry and your business's readiness. In this article, we'll provide you with a concise guide on conducting research to determine if government contracting is a suitable path for your business and industry. Let's get started.

Step 1: Familiarize Yourself with Your NAICS Code

Before embarking on any research, you must identify your NAICS (North American Industry Classification System) code. If you've been running your business for some time and have filed taxes, you can locate this code in the industry code section of your tax documents. However, if you're new to the business world, don't worry—we've got you covered. We'll guide you on finding your NAICS code, a crucial first step in conducting effective research.

Visit NAICS.com, where you can easily discover your industry code. All you need to do is enter your industry or business keywords into the search bar. For instance, let's say you're a plumber. A quick search reveals that the NAICS code for plumbing services is 238220. Make sure to jot down this code; you'll need it for your research in the next step.

Step 2: Launching Your Research

With your NAICS code in hand, it's time to dive into the research process. Head over to USAspending.gov and, on the homepage, select "Start Searching Awards." Before proceeding, we'll set up some filters to the left to ensure we obtain the most pertinent information.

Keyword: If this is your first venture into government contracting research, it's advisable to leave this field blank initially.

Time: To gauge spending trends, we recommend starting with a 10-year timeframe. However, if your business has been established for a while, a 5-year span may suffice.

Award Type: Select "contracts" since we are specifically looking for government contracts.

Agency and Treasury Agency: For newcomers, it's best to keep these fields blank.

Location: This filter depends on where your business intends to provide services. Start with a broader geographical range and narrow it down after generating the report.

Recipient Type: For a broader perspective, skip this filter to capture a wide range of award recipients.

Award Amount: If you're a small business, begin with contracts valued at $1 million or less, unless your industry (like construction) has a higher threshold.

Industry Code: This is where you enter your NAICS code. For now, focus on your primary industry code, unless your business offers diverse services requiring additional codes.

The other filters can be left untouched for now, as we will delve deeper into specifics once we obtain our initial report.

Step 3: Deciphering the Report

Once you initiate the search, you'll receive a set of results with specific tabs. Let's explore what each tab reveals:

Companies Awarded: This tab provides valuable insights into the length of contracts (usually 1 to 5 years), contract values, and the agencies responsible for the awards. These contracts are exclusively federal.

Time: For our plumbing example, this tab displays spending trends. Plumbing contracts tend to peak in September, so if you're eyeing government contracts, consider applying in the quarter before to increase your chances.

Map: This tab visually represents the geographical distribution of contracts. If your business is based in Los Angeles County, you'll see nearby counties where contracts are awarded. Depending on your willingness to travel, you can identify potential areas for contract opportunities. Keep in mind that state and local contracts may also become available, so targeting these counties could be advantageous.

Categories: Discover which agencies are awarding contracts, with the Department of Defense (DOD) often being a major player. Dig deeper by exploring sub-agencies to gain further insights.

As you peruse the table, you can click on specific awardees to access additional information, including certifications, awarded agencies, codes used, and recent award trends. If a company has recently secured numerous contracts, it may be highly competitive. Conversely, limited awards may present opportunities for small businesses.

Conclusion

Armed with this comprehensive research, you can now formulate a strategy for identifying potential contracting opportunities and the certifications required to pursue them successfully. Don't hesitate to reach out to your local SBDC, such as ours at the University of La Verne, for assistance in applying for specific certifications and navigating the opportunities landscape. 

Keep an eye on our channel for future videos, where we'll delve deeper into performing searches and exploring websites dedicated to contracting opportunity notifications. Government contracting can open new doors for your small business, and with the right information and guidance, you can tap into this lucrative market.