Does your business qualify as a small business? If so, you are eligible to go after federal contracts awarded through the Small Business Administration (SBA).
The distinction is important if you wish to register for government contracting as a small business. To be a small business, you must adhere to size standards established by the SBA. If you register as a government contractor in the System for Award Management (SAM), you also will self-certify your business as small.
The SBA, for most industries, defines a "small business" either in terms of the average number of employees over the past 12 months or average annual receipts over the past three years. In addition, SBA defines a U.S. small business as a concern that:
Is organized for profit
Has a place of business in the U.S.
Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor
Is independently owned and operated
Is not dominant in its field on a national basis
Your business may be a sole proprietorship, partnership, corporation, or any other legal form. In determining what constitutes a small business, the definition will vary to reflect industry differences, such as size standards.
Because all federal agencies must use SBA size standards for contracts identified as small business, you need to select the North American Industry Classification System (NAICS) codes that best describe your business and then determine if the business meets size standards for the selected NAICS codes. You can do this yourself by searching the Web for SBA Size Standards Toolto find out if you qualify as a small business.
Once you have determined you are indeed a small business, you then can certify your business as small by registering as a government contractor. Such a qualification can mean big bucks and prestige for your business. That’s because the U.S. government is the largest single purchaser of goods and services in the world, awarding approximately $500 billion in contracts every year.
The SBA's Office of Government Contracting & Business Development works with federal agencies to award at least 23 percent of all prime government contract dollars to small businesses and help federal agencies meet specific statutory goals for small disadvantaged businesses, women-owned small businesses (WOSB), service-disabled veteran-owned small businesses (SDVOSB), and small businesses that are located in historically underutilized business zones (HUBZone).
In addition, SBA's 8(a) Business Development Program assists eligible socially and economically disadvantaged individuals in developing and growing their businesses through one-on-one counseling, training workshops, matchmaking opportunities with federal buyers, and other management and technical guidance.
You pay your fair share of federal taxes, so it only makes sense to go after government contracts. You might say you're getting some of your tax money back.
All of the information you need can be found on the SBA's Website.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.