Contract Guides
Government Contracts for Small Businesses: How to Find and Win Them
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The federal government spends hundreds of billions of dollars on contracts each year, with over $60 billion through formal small business set-aside programs alone. This guide covers everything you need to know to find opportunities, understand the process, and win your first contract.
Why Federal Contracting Is Worth Your Time
The U.S. federal government is the world's largest single buyer of goods and services, spending hundreds of billions of dollars on contracts each year. By law, at least 23% of prime contract dollars must go to small businesses. Over $60 billion flowed through formal set-aside programs alone — and total small business prime contracting exceeded $183.5 billion in FY2024 when including open-competition wins (SBA Annual Procurement Scorecard).
Unlike commercial clients, the federal government pays reliably, has long-term needs, and often awards multi-year contracts. A single federal contract can provide years of stable revenue. And once you've established past performance, follow-on work and agency relationships compound over time.
How the Federal Procurement Process Works
Federal agencies follow a structured acquisition process governed by the FAR (Federal Acquisition Regulation). Here's the simplified version:
- Agency identifies a need. A program office needs a product or service and works with a contracting officer to plan the acquisition.
- Market research. The agency may issue an RFI or Sources Sought notice to understand what vendors are available and whether a small business set-aside is appropriate.
- Solicitation released. An RFQ (for simpler purchases) or RFP (for complex work) is posted on SAM.gov.
- Vendors submit bids or proposals. You respond by the deadline with your price and (for RFPs) your technical approach.
- Evaluation and award. The contracting officer evaluates responses according to the stated criteria and awards to the winning vendor.
- Contract performance. You deliver the product or service. Performance is documented and becomes your past performance record for future bids.
Small Business Set-Aside Programs
The government uses "set-asides" to restrict competition on certain contracts to specific categories of small businesses. If you hold a certification, set-asides dramatically improve your odds because you're competing against a much smaller pool.
8(a) Business Development
For businesses owned by socially and economically disadvantaged individuals. Includes sole-source authority up to $5.5M (services/goods) per FAR 19.805-1.
Learn more →
HUBZone
For businesses in Historically Underutilized Business Zones — economically distressed communities.
Learn more →
SDVOSB
Service-Disabled Veteran-Owned Small Business. Strong preference from VA and other agencies.
Learn more →
WOSB / EDWOSB
Women-Owned and Economically Disadvantaged Women-Owned Small Business programs.
Learn more →
Even without a specialty certification, any business qualifying as "small" under the relevant NAICS code can compete on "Total Small Business" set-asides — the most common type.
How to Find Active Contract Opportunities
The primary source for federal contract opportunities is SAM.gov (System for Award Management). Most contract opportunities expected to exceed $25,000 must be publicized there (per FAR 5.101).
To find opportunities relevant to your business:
- Search by NAICS code — this is your industry classification and the most reliable filter
- Filter by set-aside type — see only contracts you're eligible to bid on
- Filter by agency — focus on agencies that regularly buy what you sell
- Set up keyword watches — get notified when new solicitations match your terms
EasyGov pulls from SAM.gov daily and adds AI plain-English summaries so you can scan dozens of opportunities quickly without reading full solicitation documents.
Browse active opportunities →Common Mistakes First-Time Contractors Make
- Bidding on everything. Chasing every opportunity dilutes your effort. A focused bid on a well-matched solicitation beats five rushed bids on poor fits. Target contracts where you have genuine capability and can price competitively.
- Ignoring past performance. Agencies take past performance seriously. If you have no federal past performance, lead with relevant commercial work, subcontracting experience, or teaming with an experienced prime.
- Missing the Q&A deadline. Most solicitations have a period for written questions. If you have ambiguities, ask. Missing this window means you can't get clarification, and a misunderstood requirement can sink an otherwise strong bid.
- Letting SAM.gov registration expire. Registrations must be renewed annually. An expired registration can disqualify you from an award even after winning the competition.
- Only looking at prime contracts. Subcontracting under an established prime is a legitimate way to build past performance, learn the federal market, and earn revenue while pursuing primes.
Resources for Small Business Contractors
- APEX Accelerators (formerly PTACs): Free contracting assistance from the DoD. Help with SAM.gov registration, finding opportunities, reviewing proposals.
- SBA: Small Business Administration programs, certifications, and financing for government contractors.
- Agency OSDBUs: Most large agencies have an Office of Small and Disadvantaged Business Utilization that can connect you with contracting opportunities and matchmaking events.
- USASpending.gov: Search historical federal contract awards to understand who agencies buy from, what they buy, and at what prices.
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Frequently Asked Questions
How much of the federal budget goes to small businesses?
The federal government has a statutory goal of awarding at least 23% of all prime contract dollars to small businesses each year. Across all formally labeled set-aside programs alone, over $60 billion went to small businesses in FY2024 through programs like 8(a), SDVOSB, WOSB, and HUBZone. When including small businesses that win unrestricted open-competition contracts, total prime contracting to small businesses exceeded $183.5 billion in FY2024 per the SBA Annual Procurement Scorecard.
Do I need a GSA Schedule to sell to the federal government?
No. A GSA Schedule (also called a Federal Supply Schedule or Multiple Award Schedule) is one way to sell to the government, but it's not required. Many small businesses win contracts through open competition, set-aside solicitations, and simplified acquisitions on SAM.gov without a GSA Schedule. A GSA Schedule is useful once you're established and want to make it easier for agencies to buy from you repeatedly.
What is past performance and why does it matter?
Past performance is your track record of successfully delivering on previous contracts. In RFP evaluations, contracting officers review past performance as a major factor — sometimes as important as technical approach and price. New contractors often struggle because they lack documented past performance. To overcome this, use relevant commercial work, teaming with an experienced prime contractor, or subcontracting to build your record.
What is a CAGE code?
A Commercial and Government Entity (CAGE) code is a 5-character identifier assigned to your business when you register on SAM.gov. It's used to identify your company in government databases, contracts, and payment systems. Your CAGE code is automatically assigned during SAM.gov registration — you don't apply for it separately.