Contract Required
2008
Take Advantage Of Federal Contracts For Your Business Startup
The American government, at all levels, spends billions of dollars per year on everything from spy planes to pencils. Just about every purchase requires a government contract, and most government agencies require that a portion of these contracts be set aside for small businesses. Getting on board with federal, state, or local government contracts can be a boon to your venture's bottom line. The process to get started on becoming eligible and ultimately competing for these contracts is not too difficult. It just requires a little time and effort to open an entirely new target market -- the government.
Before you are eligible to bid on government contracts, you need to register your company as an approved contractor. The first step is to acquire a Dun & Bradstreet DUNS number. This is a 9-digit identification number that can be obtained for free through their website. Dun and Bradstreet are the credit bureau for business entities. If you plan to seek loans in the future under your company's name, having an up-to-date DNB file is important. However, the full file costs $599 to set up. For now, you can just get a registration number for free.
The second required registration is with the federal government's Central Contractor Registration (CCR). This is the primary database of businesses that can work with the federal government. You will need your DUNS number, your federal tax id number and name, your banking account number, and certain statistical data about your business. This data includes each location of your business, the number of employees at each location, and the average sales for each location over the last three years. The process is free and it takes a day or so to receive your registration number from the CCR.
Finally, you will need to complete the Online Representations and Certifications Application (ORCA), another federal form designed to collect additional, more detailed information about your company and what you offer. Required data includes a description of your products, price and discount rates, any warranties you offer, and past performance information. This application is used to evaluate your company and offerings.
Once all the registrations are completed and approved, the final step in preparing to bid on federal contracts requires your company to undergo a past performance evaluation through Open Ratings, Inc. While not all government contract bids require this report, many do and many others will request (though not require) that you submit one as well. The filing fee is $125, and a list of customer references will be used as the basis for your evaluation. While only four references are technically required to complete the process, the company requests that you submit 15 to 20 references in order to ensure they receive sufficient response and data to complete your evaluation. The report takes approximately 20 days to complete, if you register online and all goes well.
Obviously, you only want to submit positive references, so it is a good idea to check with your references before you include them in your application. These ratings are only good for 6 months, so be sure to check any contracts you intend to bid on to see if you need this report at all. If you are going after multiple contracts, having the report sent will cost you, as well. The first two are free, then any additional report requests are $25 each.
Once your registrations are complete, you can start bidding on appropriate government contracts. Most available contract solicitations are listed at www.fedbizopps.gov. Each entry includes the how and when and requirements of bidding on the contract. If you are offering products that would qualify under the GSA long term contracts, those solicitations are found under www.GSA.gov. Be sure to review these sites before registering -- if the government does not have a need for your services or products, don't waste your time with the process.
About the Author
About the Author-K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System includes step-by-step business startup procedures, small business software & more, to help entrepreneurs start a business based on their idea. Visit LaunchX.com for a free Business Readiness Assessment and get on the road to owning your own business today.
Part I - The What, How & Why of Contracts
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