Benefits of government contracting
Government contracts are a tremendous financial opportunity for small businesses.
The U.S. government is the largest customer in the world. It buys all types of products and services — in both large and small quantities — and it’s required by law to consider buying from small businesses.
The government wants to buy from small businesses for several reasons, including:
- To ensure that large businesses don’t “muscle out” small businesses
- To gain access to the new ideas that small businesses provide
- To support small businesses as engines of economic development and job creation
- To offer opportunities to disadvantaged socio-economic groups
How it works
The process of requesting proposals, evaluating bids, and awarding contracts should take place on a level playing field. The government should consider a bid from any qualified business.
Set-aside and sole-source contracts
Federal agencies must publicly list their contract opportunities. Some of these contracts are set aside exclusively for small businesses.
In some cases, these so-called set-aside contracts might consist of certain types of tasks on larger contracts. In others, entire contracts may be reserved for small businesses. When a contract is set-aside for one specific small business, it’s called a sole-source contract.
Set-aside and sole-source contracts
SBA works with federal agencies in order to award 23% of prime government contract dollars to eligible small businesses. It also offers counseling and help to small business contractors.