Federal contracting guide
How does a veteran-owned small business start selling to the federal government?
Confirm federal agencies buy what you sell, register your entity in SAM.gov to get a Unique Entity ID, choose accurate NAICS codes and confirm you are small under SBA size standards, then pursue opportunities as a prime contractor or subcontractor. Veteran certification through SBA VetCert adds access to VOSB and SDVOSB set-asides, but registration, research, relationships, and compliant proposals are what win contracts.
Key takeaways
- SBA calls the U.S. government the world’s largest customer, and federal agencies are required by law to provide opportunities for small businesses.
- SAM.gov registration is required to bid directly on federal contracts and must be renewed every 365 days.
- Your NAICS codes determine which size standard applies and which opportunities you can pursue as a small business.
- Many firms win their first federal work as a subcontractor to an established prime contractor.
- APEX Accelerators provide free federal contracting counseling across Texas.
Is federal contracting right for your business?
Federal contracting can provide large, steady customers, but it rewards patience and precision. Sales cycles can be long, paperwork is detailed, and payment terms and compliance obligations differ from commercial work. Before investing heavily, answer a few questions honestly: do federal agencies or their contractors buy what you sell, can you deliver at the scale and standard they require, and do you have the working capital to perform before the first payment arrives?
Research past awards for your products or services on public federal spending data sites such as USAspending.gov, and search current and archived notices on SAM.gov. Look for which agencies buy, typical award sizes, which companies win, and which awards were set aside for small or veteran-owned businesses. That research turns a vague goal into a target list.
Step 1: Register in SAM.gov
SAM.gov explains that a registration allows you to bid on government contracts and apply for federal assistance, and that a Unique Entity ID is assigned during registration. You sign in through Login.gov. SAM.gov offers an entity registration checklist so you can gather the required information before you start.
You must renew the registration every 365 days to keep it active. Registration in SAM.gov is free; be cautious of outside services that imply a fee is required. After registration, many contractors also receive a Commercial and Government Entity (CAGE) code, which is commonly used to identify contractors.
- Legal business name and physical address exactly as they appear in your formation and tax records.
- Taxpayer identification number and banking details for electronic payment.
- NAICS codes for the products and services you sell, and the representations and certifications SAM.gov asks you to complete.
- Points of contact who will actually monitor the registration and renewal notices.
Step 2: Choose NAICS codes and confirm you are small
The North American Industry Classification System (NAICS) codes in your SAM profile describe what you do, and each code has an SBA size standard, usually based on average annual receipts or number of employees. SBA notes that size standards vary by industry and determine whether a business qualifies as small. Choose a primary code that matches your main line of work and add others only for work you genuinely perform.
Size status matters for veteran programs too. SBA VetCert requires the business to be small under the size standard for a NAICS code in its SAM profile.
Step 3: Understand the rules you agree to
SBA points new contractors to the Federal Acquisition Regulation (FAR) and, for defense work, the Defense Federal Acquisition Regulation Supplement (DFARS). You do not need to memorize them, but you should read the clauses in any solicitation you respond to. SBA highlights common rules such as industry size standards, Buy American and Trade Agreements Act requirements, limits on how much work you can subcontract and to whom, and documentation and reporting duties.
Limitations on subcontracting are especially important for set-aside work. When a contract is set aside for small or veteran-owned businesses, the prime is generally expected to perform a meaningful share of the work itself rather than pass most of it to a larger firm. Read the specific clause in each solicitation.
Step 4: Know the contracting pathways
SBA describes two broad roles. Prime contractors bid on and win contracts directly from agencies. Subcontractors join prime contractor teams, usually to provide a specific capability or product. Both roles require that you legally qualify as small when competing as a small business.
- Small-business set-asides: competitions limited to small businesses.
- SDVOSB set-asides and sole-source awards: available across the federal government to SBA-certified SDVOSBs.
- VA Vets First: SBA states certified VOSBs and SDVOSBs can pursue VA set-aside and sole-source contracts.
- Other SBA programs that can apply alongside veteran status: 8(a) Business Development, HUBZone, Women-Owned Small Business, and the SBA Mentor-Protégé Program.
- Subcontracting: large prime contractors often have small-business subcontracting goals and supplier offices that look for capable small firms, including veteran-owned ones.
Step 5: Build a capability statement and relationships
A capability statement is a one-page summary of what you do for government customers. Include core competencies, relevant past performance (commercial work counts if it is similar), differentiators, and company data such as your Unique Entity ID, CAGE code, NAICS codes, and only the certifications you actually hold.
Relationships matter. Agency small-business offices, often called Offices of Small and Disadvantaged Business Utilization, host vendor outreach and can explain how their agency buys. Industry days, matchmaking events, and prime-contractor supplier fairs are places to learn about upcoming needs before they are posted. Follow up with useful information, not generic sales pitches.
Step 6: Respond to opportunities with discipline
Read every solicitation completely before deciding to bid. Check the set-aside type, NAICS code and size standard, period of performance, place of performance, insurance and licensing, and evaluation criteria. Make a deliberate bid or no-bid decision based on fit and your realistic chance of winning.
If you bid, follow the instructions exactly. Many proposals are eliminated for format or submission errors before anyone evaluates the substance. Price carefully, including all labor, materials, travel, insurance, and overhead, and make sure you can perform at the price you offer. When you lose, request a debriefing where available and use the feedback.
Free federal contracting help in Texas
APEX Accelerators, formerly called Procurement Technical Assistance Centers, provide no-cost counseling and training on government contracting, including registrations, market research, and bid review. Several operate in Texas through universities and colleges. SBA district offices, Veterans Business Outreach Centers, and the Texas Veterans Commission Veteran Entrepreneur Program also help veteran entrepreneurs navigate federal contracting.
Frequently asked questions
How long does it take to win a first federal contract?
It varies widely by industry and effort. Many firms spend months on registration, research, and relationship-building before a first award. Starting with smaller purchases or subcontracts can shorten the path.
Do I need to be certified as veteran-owned to bid?
No. You can compete for unrestricted and small-business set-aside contracts without VetCert. Certification is required to compete for VOSB and SDVOSB set-aside and sole-source opportunities.
Do I need a website for federal contracting?
It is not required, but contracting officers and primes often look up a business before contacting it. A simple, accurate website and capability statement help you look credible.
