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FAQs

GOVERNMENT PROCUREMENT

Questions?

1. What does the government buy?

2. Does the government always award the contract to the low bidder?

3. Does the government pay on time?

4. Do I need to be on a GSA schedule in order to do business with the government?

5. Do I need to be certified in order to bid on government contracts?

6. What are the federal government's small business certifications?

7. What is SAM?

8. How do I register for SAM?

9. Does registering in SAM market my company to the government?

10. Are there web sites where I can see what the government is buying?

What does the government buy?

Federal, state and local government agencies buy everything from toothpicks and cleaning services to spaceships and cancer research. The key is to determine which government agencies buy the products and/or services you sell and to develop a focused marketing strategy targeting those agencies. Procurement Technical Assistance Center (PTAC) can help you identify potential government customers and learn how to approach them. PTAC is a specialty center of the SBDC Network and provides free consulting and low cost technical assistance to help businesses in 45 counties between and around the major Southeast Texas cities of Houston and Austin sell to the government.

Does the government always award the contract to the low bidder?

No. In many instances the government awards the contract to the company that provides the best value, and this does not necessarily mean the company offering the lowest price. Other factors such as technical capability, past performance and quality may also be considered. PTAC can help you interpret a request for bid or proposal so that you understand which evaluation factors will be used in determining who gets the contract.

Does the government pay on time?

Provided your shipping and invoicing documentation is correct and complete, you can expect a timely payment. In fact, federal agencies offer a prompt payment in return for a discounted price, and prefer to pay by Electronic Funds Transfer (EFT) to speed up the payment process. Federal agencies also pay interest on the amount they owe you if they delay payment past the stated terms of the contract. PTAC can help you with your paperwork and also help you register to be paid electronically.

Do I need to be on a GSA schedule in order to do business with the government?

No, although it may be beneficial to you in the long run. Think of the General Services Administration (GSA) as a buying activity for other federal government agencies. GSA awards “schedules” or long-term contracts to vendors who provide certain goods and services required by those agencies. Then, when the agencies have a need for a particular product or service, they can buy it from one of the vendors on the schedule for the pre-determined price. A vendor might get lots of business by being on a GSA schedule, but there are no guarantees. PTAC can help you determine if your company is a good candidate to apply for a GSA schedule as well as help you through the application process.

Do I need to be certified in order to bid on government contracts?

No. Except for certain “set aside” contracts, the government does not require any type of certification for a company to be eligible to bid on contracts. However, being certified as a woman-owned, minority or otherwise disadvantaged business can level the playing field and provide more opportunities for you to bid. Since federal, state and local government agencies have different certification programs with different eligibility factors and application processes, you should first determine which agencies you want to do business with, and then look into the applicable certification programs. PTAC can help you determine if you are eligible for certification and help you apply.

What are the federal government's small business certifications?

 

8(a) – The SBA's Section 8(a) Business Development Program - named for a section of the Small Business Act, is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market.  

To be eligible, the applicant firm:

  • must be a small business
  • must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and
  • must demonstrate potential for success.
  • personal net worth cannot exceed $250,000
  • must have been in business for 2 years (evidence by tax returns.)

Visit SBA’s 8(a) Business Development Program website. 

  SDB – Small Disadvantaged Business status is now a self-certifying process. In order to claim the SDB status, a small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to quality. Other individuals can qualify if they show by a "preponderance of the evidence" that they are disadvantaged. All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry.

  HUBZone - The HUBZone Empowerment Contracting Program was adopted to stimulate economic development and create jobs in urban and rural communities by providing federal contracting preferences to small businesses. These preferences go to small businesses that obtain HUBZone (Historically Underutilized Business Zone) certification in part by employing staff that live in a HUBZone and maintain a "principal office" in one of these specially designated areas. [A principal office can be different from a company headquarters]. The program resulted from provisions contained in the Small Business Reauthorization Act of 1997. Visit the HUBZone website.

  WOSB - The Small Business Act authorizes contracting officers to specifically limit, or set aside, certain requirements for competition solely among women-owned small businesses (WOSBs) or economically disadvantaged women owned small businesses (EDWOSBs). This is referred to as the WOSB Program. Visit the WOSB website.

   The 8(a), HUBZone, and WOSB programs requires companies to be certified by the U.S. Small Business Administration (SBA).

What is SAM?

The System for Award Management (SAM) is the official registration required prior to bidding on a contract with any federal government agency. It is the primary registrant database for the U.S. Federal Government.  SAM collects, validates, stores and disseminates data in support of agency acquisition missions. SAM uses this information to perform Electronic Funds Transfer (EFT). This requirement covers all federal agencies.

How do I register for SAM?

Registering online can be accomplished at https://www.sam.gov. This method is quick and user friendly. Click on the “help” tab and download the registration screenshots for more information. Be sure to first obtain a free DUNS Number from Dun & Bradstreet by calling 1-866-705-5711.

Does registering in SAM market my company to the government?

No, registering in SAM does not market a company to government buyers. The SAM database collects information necessary for a government buying activity to contact or maintain contact with a company. This registration also provides the information necessary for the transfer of funds via electronic funds transfer (EFT).

Are there web sites where I can see what the government is buying?

Yes, the federal government posts many of its contracting opportunities online. The primary site is http://www.fedbizopps.gov, where all federal agencies are required to post contracting opportunities that are estimated to be valued over $25,000. Most agencies also post acquisition forecasts, which are lists of the purchases the agencies expect to make in the coming months, on their home pages. The Federal Acquisition Jumpstation provides links to most federal agency home pages. State of Texas bid opportunities can be found through the Electronic State Business Daily program.