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The U.S. Small Business Administration (SBA): Defining the Market

The U.S. government is the world’s largest buyer of products and services. Purchases by military and civilian installations amount to nearly $200 billion a year, and include everything from complex space vehicles to janitorial services to cancer research. In short, the government buys just about every category of commodity and service available.

By law, federal agencies are required to establish contracting goals, such that 23% of all government buys are intended to go to small businesses. In addition, contract goals are established for women-owned businesses, small disadvantaged businesses, firms located in HUBZones and service disabled veteran-owned businesses. These government-wide goals, which are not always achieved, are 5%, 5%, 3% and 3%, respectively. They are important, however, because federal agencies have a statutory obligation to reach-out and consider small businesses for procurement opportunities. It is up to you to market and match your business products and services to the buying needs of federal agencies.

Selling to the federal government is, in some ways, similar to selling to the private sector. While federal procurement procedures may have a different set of rules and regulations, many of the same marketing techniques and strategies you already employ may work here. Use your common business sense. Some tips: Get to know the agency and understand the context in which your product or service could be used.

Obtain available information on past awards, quantities, costs and awarders. Become known to potential purchasers. Before going forward, take a moment to think about your company’s products and services. Take a close look at your company and consider what the government will look for when considering your company for a contract award. Financial status, staff capabilities and track record are all of interest to the government.

How the SBA can help

The SBA’s mission is to stimulate and foster economic development by helping new businesses get started and established firms grow. While small businesses often face considerable hurdles when trying to win federal contracts, the SBA can help overcome these barriers. The SBA works closely with other federal agencies and the nation’s leading federal contractors to ensure that small businesses obtain a fair share of government contracts and subcontracts.