Becoming a U.S. government contractor is an excellent showcase for your company. It will be the best way to present yourself and obtain greater benefits. That's why it's essential to know how to become a federal contractor . At Hispanos Emprendedores, we give you all the guidance you need to succeed.
What is a contractor?
The private company that produces goods and services for another organization or individual is called a contractor. This assumes the responsibility for carrying out an activity and generally must use a professional who is outside of their activity who is called a subcontractor.
The contractor can carry out the entire project or part of it. They provide the materials, equipment, tools, and labor necessary to complete the project. The contractor can be a government employee, meaning they work under contract with the government, or an independent contractor.
When it comes to government contractors, they must comply with a series of rules to ensure fair and open competition. In the United States, a percentage of contracting funds is allocated to women-owned businesses, so-called disadvantaged businesses, businesses owned by disabled service veterans, and participants in the HUBZone program. The latter group includes companies located in underutilized areas.
How to become a federal contractor
The U.S. government is required to give small businesses the opportunity to become federal contractors. Before registering for a contractor license, you should know that your business must have been in operation for at least two years and have annual revenue of $25,000.
In addition, there are two categories of government contractor. The first is primary, which intervenes in bids and obtains contracts directly with government agencies. The second is the subcontractors who participate in the teams of the primary contractors to supply a product or provide a capacity.
The registration process is simpler than many think, you just have to meet certain requirements to compete for federal contracts.
The first step is to formally register the business at the state and local levels. Then, obtain a number from the Data Universal Numbering System (DUNS). This is a nine-digit identifier for each physical location of the business. Assigning this number is free.
At the time of registration on the website, they will ask you for a legal name, name and address of the central offices, address, city, state and zip code. In addition to, phone number, name and title of contact, number of employees and if it works in your home.
Next, you need to request the North American Industry Classification System (NAICS) codes . These are used to classify the products and services offered by the company according to the type of economic activity.
With these codes you can verify if it is qualified as a small business on the Small Business Administration page.
The next step is to register your business with the Federal Government through the System for the Administration of Contracts (SAM) . This is a database where government agencies search for contractors. You should create an attractive profile to stand out, as it functions as a kind of resume.
Compliance with standards
What remains to be done to become a federal contractor is to comply with the laws and regulations included in the Federal Procurement Regulations (FAR). You also need to market what you offer to attract the customer, in this case it would be government agencies.
Other information that may be requested is the employer number EIN or Taxpayer Identification Number (TIN), the Industrial Standard Classification (SIC). Also the codes of the products if necessary and the code of Federal Classification of Suppliers.
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