Frequently Asked Questions  (FAQ) About Government Contracting

Government procurement, also known as government purchasing, is the procurement of goods and services by federal government agencies. This is to say, government agencies are soliciting the public business sector for the goods and services they provide. This is a very formal process that is required by law, in which government agencies issue bid proposals and seek responses from companies. Responses are accepted until the closing date and the lowest bidder is awarded the contract. This is a very standard process across the United States and among most agencies, but it is important to fully understand the detailed processes of each agency if you intend on doing business with them.

Government procurement in the United States is big business. Well, to call it big business might be an understatement considering it accounts for about $7 trillion annually, and comprises 23 percent Federal  percent of GDP in the U.S. Maryland, Virgina and Washington, DC procurement also contributes significantly to the economy. Large states like  California, New York and Texas have enormous budgets, well into the tens of millions, for government purchasing. City and county departments are also large buyers of goods and services, with more of an emphasis on specialized products and services.

Do I have to become a registered vendor with the government to win a contract?

With a few exceptions, a firm that wants to compete for federal government contracts must meet at least three requirements:

1. Obtain a Data Universal Numbering System (DUNS) number, which is a unique nine-digit identification number for each physical location of a business, available at[http://www.dnb.com/US/duns_update/

2. Register with the government's System for Award Management (SAM)  database, available at http://www.sam.gov You must complete your System for Award Management (SAM) Registration in order to work as a federal contractor. Once completed (and only if completed correctly and without errors), your SAM Registration will be valid for one year from the date the registration is complete.

What is a DUNS Number?

A Data Universal Numbering System (DUNS) number that to identify unique business establishments. This nine-digit number is assigned and maintained by Dun and Bradstreet.

What is the Systerm For Award Management  (SAM)?

The System For Award Management(SAM) registers organizations who want to do business with the Federal Government. Organizations must have a DUNS number to register with the SAM. Organizations provide specific organizational information to enable government buyers to locate them. SAM is sponsored by DOD and NASA. To register in CCR a company must have a DUNS number.

What is a CAGE code?

The Commercial and Government Entity (CAGE) code is a five character ID number used extensively within the Department of Defense (DOD) and NASA.

What is a NAICS code?

The North American Industry Classification System (NAICS) is an industry classification system used by the statistical agencies of the United States for classifying business establishments.

What resources are available to help me learn government contracting processes?

Many government agencies have in-house resources to provide contracting assistance. The General Services Administration's Office of Business Support assists businesses in determining who to market their products and services to in the federal government, and how they can get connected.

The SBA provides oversight of the certification programs as well as business matchmaking programs.

The Procurement Technical Assistance Centers (PTAC) are non-profit organizations created by Congress and partially funded by the Department of Defense to expand the supplier base and increase competition among government contractors, thus reducing the cost of maintaining a strong national security, as well as generating employment and enhancing the economy.

The PTACs' role is to work with businesses to help them obtain and perform federal, state and local government contracts by educating the companies on the processes necessary for securing government contracts and by connecting businesses with government agencies seeking competitively priced products and services.

Does the government offer certifications?

The U.S. Small Business Administration (SBA) handles two certifications for federal government procurement programs:

• 8(a) Business Development

• HUBZone.

Businesses can self-certify that they are any of the following:

• Small business

• Small disadvantaged business

• women-owned business

• veteran-owned business

• service-disabled veteran-owned business

Where and how do government agencies publicize contracting opportunities and at what dollar threshold?

All federal agencies are required to publicize bidding opportunities on http://www.fedbizopps.gov; when the purchase is expected to exceed $25,000, so anyone with Internet access can find out about these opportunities.

How do I find out which agencies buy products and/or services similar to mine?

The Federal Procurement Data Center at https://www.fpds.gov reports statistics on procurement for more than 70 federal agencies. Some federal, state and local government agencies, military installations and prime contractors publish procurement directories and procurement forecasts on their Web sites.

What is Best Value?

Best value is the expected outcome of any acquisition that ensures the customers needs are met in the most effective, economical, and timely manner.
Best value is the goal of sealed bidding, simplified acquisition, commercial item acquisition, negotiated acquisition, and any other specialized acquisition method or combination of methods.

Negotiated acquisition techniques used to obtain best value may span a "continuum" from low priced technically acceptable to tradeoffs between price, past performance and the technical solution.

What is the Federal Acquisition Regulation (FAR)?

The primary source of federal procurement information and guidance regulations. The FAR, which is published as Chapter 1 of Title 48 of the Code of Federal Regulations, is prepared, issued, and maintained under the joint auspices of the Secretary of Defense, the Administrator of General Services Administration, and the Administrator of the National Aeronautics and Space Administration.

Acquisition Regulation, which consists of Parts 1-53 of Title 48 of the Code of Federal Regulations. Available at, the FAR covers, for example,contractor qualifications, types of contracts, small business programs, and federal supply
schedule contracting. The FAR also includes, in Part 2, definitions of procurement words and terms, and, in Part 52, solicitation provisions and contract clauses.2

Actual responsibility for maintenance and revision of the FAR is vested jointly in the Defense Acquisition Regulatory Council (DARC) and the Civilian Agency Acquisition Council (CAAC).  Federal Acquisition Regulation (FAR) http://www.acquisition.gov/far

What is the Federal Business Opportunities Site?

Federal Business Opportunities or www.FedBizOpps.gov is the single government point-of-entry (GPE) for Federal government procurement opportunities over $25,000. Government buyers are able to publicize their business opportunities by posting information directly to FedBizOpps via the Internet. Through one portal - FedBizOpps (FBO) - commercial vendors seeking Federal markets for their products and services can search, monitor and retrieve opportunities solicited by the entire Federal contracting community.

What is a GSA Contract?

A GSA contract, also known as a GSA Schedule, Federal Supply Schedule contracts, or multiple award schedules, is an indefinite delivery, indefinite quantity (IDIQ) contract negotiated between the US General Services Administration (GSA) and commercial companies and available for use by federal agencies worldwide. GSA contracts make it easy for the government to purchase state-of-the-art, high-quality commercial products and services. To maintain continued sources of supplies and services, schedule contract periods are as long as five years with three five-year option periods.

What Is The General Services Administration (GSA)?

GSA is a centralized, federal procurement, property management, policy development and information provision agency, created by Congress to improve government efficiency and help federal agencies better serve the public. The US General Services Administration (GSA) is a management agency of the federal government that provides federal agencies with the tools necessary to perform their day-to-day operations. The GSA is best likened to the landlord or housekeeper of the federal government because it provides such supplies and services as furniture; equipment and supplies (power tools; phones, computers, etc.), workspaces; security; travel and transportation services; federal motor vehicle fleet management; historic building preservation; fine art program management; and on and on and on.

What is the Federal Supply Service (FSS)?

The Federal Supply Service (FSS) is one of three divisions managed by the GSA and charged with managing and operating the Federal Supply Schedule program. The primary responsibility of the FSS is to negotiate indefinite-delivery/indefinite-quantity, no-guarantee-of-sale contracts with commercial business to provide goods and services at fixed prices for specific periods of time. These contracts are called GSA contracts, GSA Schedules, Federal Supply Schedule contracts, or multiple award schedules.

Currently, FSS negotiates schedule contracts for more than 50 different product groups, ranging from hardware to power tools, to office supplies and furniture, to information technology equipment and services, to environmental consulting services, to professional engineering services. FSS awards these contracts under negotiated procurement procedures, which permit offerors the opportunity to revise offers before the contract is awarded.

What are Set Asides?

Under the Small Business Act, federal agencies conduct a variety of procurements that are reserved exclusively for small business participation. These transactions are called "small business set-asides" and include the Small Business Reserve, Set-Asides above the simplified acquisition threshold, the Small Business Competitiveness Demonstration Program, the HUBZone Empowerment Contracting Program, and the Service Disabled Veteran Owned Small Business Program.

What is a Small Business?

A business smaller than a given size as measured by its employment, business receipts, or business assets.

What is an Emerging Small Business?

A small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the Standard Industrial Classification code assigned to a contracting opportunity.

What is a Small Disadvantaged Business Concern?

A small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.

What is a Certified Small Disadvantaged Business?

A Small Disadvantaged Business Concern that is certified by the SBA. SBA certifies SDBs to make them eligible for special bidding benefits.

What is a Service Disabled Veteran Owned Small Business?

A business which qualifies as a small business and is 51% unconditionally owned and controlled by one or more person(s) who served in the Active Military , Naval, or Air Service, and who was discharged or released under conditions other than dishonorable, and whose disability was incurred or aggravated in line of duty in the active military, Naval, or Air Service, or in the case of permanent or severe disability, the spouse or permanent care giver of such veteran. Click here for more information.

What is the HUB-Zone Business Program?

The program encourages economic development in historically underutilized business zones - "HUBZones" - through the establishment of preferences. Firms must be certified by the SBA in order to participate. For more information:https://eweb1.sba.gov/hubzone/internet/general/whoweare.cfm#2

What is a HUB-Zone Business?

To be certified as a HUBZone Business, the firm must be a small business and it must be located in a "historically underutilized business zone" or HUBZone. it must be owned and controlled by one or more US Citizens, and at least 35% of its employees must reside in a HUBZone.

What is 8(a)?

The SBA's 8(a) 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 participate in the 8(a) Program, a firm must be certified by the SBA.

For more information: http://www.sba.gov/8abd/indexfaqs.html

What is an 8(a) Business?

To participate in the 8(a) Program, a firm must be certified by the SBA. To qualify, the 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. 
For more information: http://www.sba.gov/8abd/indexfaqs.html

What is a Certified 8(a) Firm?

A firm owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the Small Business Administration�s 8(a) Business Development Program. Click here for more information. Click here to apply

What is a Product Service Code (PSC)?

PSC's are categorizations of what the U.S. Government buys. They consist of Federal Supply Classification Codes (FSC) for commodities, which are numbered 10-99, and Research and Development codes cover all aspects of research, development, and evaluation including management and support, which are lettered a-z.

To pick the correct product or service code: http://fpdcapp.gsa.gov/pls/fpdsweb/PscWiz

What is an Acquisition?

The acquiring of supplies or services by the federal government with appropriated funds through purchase or lease.

What is a Best and Final Offer?

For negotiated procurements, a contractor's final offer following the conclusion of discussions.

What is a Contracting Officer?

A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.

What is Contractor Team Arrangement?

An arrangement in which (a) two or more companies form a partnership or joint venture to act as potential prime contractor; or (b) an agreement by a potential prime contractor with one or more other companies to have them act as its subcontractors under a specified government contract or acquisition program.

What is a Negotiation?

Contracting through the use of either competitive or other-than-competitive proposals and discussions. Any contract awarded without using sealed bidding procedures is a negotiated contract.

What is a Prime Contract?

A contract awarded directly by the Federal government.

What is a Request for Proposal (RFP)?

A document outlining a government agency�s requirements and the criteria for the evaluation of offers.

What is a Subcontract?

A contract between a prime contractor and a subcontractor to furnish supplies or services for the performance of a prime contract or subcontract.

Does the Government only buy not using contracts?

Examples of procurement methods that do not involve establishing a new contract include:

Using a government purchase card (that is, a credit card)placing a task order (or a delivery order) against an existing contract.

The government wide commercial purchase card is, in effect, a government credit card government employees may use to make certain types of purchases. It is known for being used to make micro-purchases, which are items that do not exceed the micro-purchase threshold of $3,000.

Ordering from a GSA schedule

For additional information, see FAR 2.101 and FAR Subpart 13.2.