Frequently Asked Questions

The US federal government buys more than $700 billion in goods and services every year, making it the single largest buyer of commercial goods and services in the world.

Yes. US federal law permits and often encourages foreign firms to compete, particularly for work performed outside the United States. There is no citizenship requirement for the vast majority of commercial contracts.

The federal market does not advertise or come looking for vendors. It posts opportunities on government websites in a specific format and expects vendors to find them, so firms that are not actively watching never encounter them.

Two broad categories: fixed-price and cost-reimbursement. Each allocates cost risk differently between the government and the contractor, which changes how you price and manage the work.

You agree to deliver a defined product or service for a set price regardless of your actual costs. Come in under budget and you keep the difference; exceed it and you absorb the loss. FFP carries the most risk and the most profit potential for the contractor.

The government, largely. It reimburses allowable costs plus a fee, which lowers contractor risk but adds accounting and compliance obligations. These are used when requirements or costs cannot be defined precisely up front.

No. The government must publish its evaluation criteria in the solicitation and is legally bound to evaluate every proposal against those published criteria, in the stated order of importance. It is among the most transparent, rules-governed buying processes anywhere.

Most competitions weigh three: Technical Approach (can you perform this work), Past Performance (have you done comparable work), and Price. The solicitation states how they are weighted.

In the solicitation itself, before any proposal is accepted. Publishing the criteria in advance is federal law, not a courtesy.

It is the standardized structure most competitive federal solicitations follow, defined in the FAR. Because it is standardized, a solicitation from the State Department follows the same basic architecture as one from the Department of Defense, so once you can read one, you can navigate any of them.

A Statement of Work (SOW) is prescriptive: it specifies exactly what tasks to perform and how. A Performance Work Statement (PWS) defines the outcomes required and leaves the method to the contractor. Section C of the solicitation will contain one or the other.

Sections L and M. Section L tells you how to prepare and format your proposal; Section M states the factors the government will use to evaluate it. Read both before writing anything.

Yes. An active SAM.gov registration is mandatory to bid on or receive any federal contract, grant, or assistance. Without it, your offer cannot be accepted.

Plan for several weeks. If your entity is based outside the United States, you first obtain an NCAGE code, typically issued through your country's Ministry of Defense or the NATO codification authority. You then obtain a Unique Entity Identifier (UEI) through SAM.gov and submit your legal business details, banking for EFT, NAICS and PSC codes, and your representations and certifications.

Annually. An expired registration blocks new awards and modifications and can delay payments on active contracts, so set a reminder 60 days before expiration.

In the Contract Opportunities section. Search by NAICS code, set-aside, agency, or keyword, and save searches with email alerts to catch Sources Sought and pre-solicitation notices early.

A contract on which competition is restricted to qualifying small businesses. Because you compete only against other certified small firms rather than the entire industry, set-asides sharply improve your win probability.

The 8(a) Business Development Program for small disadvantaged businesses, HUBZone for firms in economically distressed areas, and the Women-Owned (WOSB) and Economically Disadvantaged Women-Owned (EDWOSB) programs, among others.

The government targets 23 percent of all prime contract dollars to small businesses, which is why set-aside programs are one of the strongest advantages available to a qualifying firm.

The prime holds the direct contract with the government and is legally responsible for all deliverables, compliance, and managing any subcontractors. Subcontractors perform portions of the work under agreement with the prime, not with the government.

When you can perform at least 50 percent of the work yourself (or meet the applicable limitations on subcontracting), have relevant past performance at similar scope, and have the management infrastructure to oversee subcontractors and interface with the government.

Neither is inherently better. Many successful companies hold both across their portfolio. Most start as subcontractors to build experience and past performance, then move into prime roles.

Before the solicitation is published, during the government's internal requirements-development phase. Once the solicitation is issued the requirements are fixed, so early intelligence and engagement are where influence is possible.

A significant federal purchase follows a structured, legally defined sequence that can span months and sometimes years, from internal requirement through solicitation, evaluation, and award.

The phase tells you what to do next: what intelligence to gather and whether the window to shape the requirement is still open or already closed.

It is the six-digit North American Industry Classification System code that classifies what your business does. It governs your small business size standard, your set-aside eligibility, and how primes and agencies discover you.

Yes. The SBA assigns a different size threshold to each code, so you may qualify as small under one code and exceed the threshold under another. This affects set-aside eligibility on each competition.

Register every code that genuinely reflects your capabilities. If you have not registered the code a contract is set aside under, you cannot compete for it, so missing codes quietly cost you opportunities.

Not a testimonial or reference letter. It is a structured, formal record of your performance on prior contracts, assessed against specific criteria and stored permanently, primarily in CPARS, the Contractor Performance Assessment Reporting System.

The government is often committing millions to a contractor it has never met, relying on documented evidence of prior work. In Best Value competitions, past performance is frequently the deciding factor, sometimes over price.

Start as a subcontractor or on smaller contracts to generate assessable CPARS records of comparable scope, then use that documented history to compete for larger prime work.

Non-compliance: missing a page limit, wrong font size, a late submission, or failing to address a required evaluation factor. The government cannot evaluate what you do not provide, and non-compliant proposals are set aside before merit is considered.

Win rates for first-time proposers are typically below 10 percent, not because the work is too hard, but because proposal writing is a distinct discipline with rigid rules and conventions that take time to master.

Writing about your company instead of the government's problem. Evaluators do not want corporate history or generic capabilities; they want to see exactly how you will perform this specific contract at this scope and location.

Plan in phases: months 1 to 3 for foundation (SAM.gov, UEI, NAICS, capability statement), months 4 to 9 for market research, relationships, and Sources Sought responses, then bidding as you build readiness. Rushing to bid before you understand the process wastes effort.

Foundation only: register in SAM.gov, obtain your UEI, identify your primary NAICS codes, build your capability statement, and study target agencies' buying history on FPDS.gov and USASpending.gov.

No. Poorly prepared early proposals waste resources and create a negative first impression. Build understanding and positioning first, then pursue opportunities you are genuinely ready to win.

A credible proposal for a mid-size services contract takes 200 to 400 hours and can consume $20,000 to $40,000 before any revenue. With new-entrant win rates around 10 to 20 percent, consistent winners are the companies that pursue the right opportunities, not simply those that write the best proposals.

Strong mission alignment with your core capability, past performance of comparable scope and scale, and no significant capability gap that would concern evaluators. If you are stretching to cover work you have never executed, the odds do not favor you.

Typically 200 to 400 hours of skilled effort at a fully-burdened $50 to $100 per hour, so $20,000 to $40,000 per proposal. Across a realistic win rate, the cost of winning one contract is effectively the cost of five to ten proposals.

A commercial buyer wants the best-value solution to a problem. A federal contracting officer must execute a legally compliant procurement that meets defined requirements and can withstand audit, inspector general review, and protest. Compliance and documentation, not relationship, drive the decision.

The federal buying process is so different that experienced commercial sellers often adapt more slowly than novices, because they must first unlearn habits like relationship selling and on-the-fly negotiation that do not apply.

Not the way it does commercially. Federal buyers need compliance and clean documentation. Relationships can inform market research, but the award is made against published criteria, not rapport.

At minimum a Unique Entity Identifier (UEI), an active SAM.gov entity registration, and the supporting identifiers and certifications that registration requires. Entities based outside the United States also need an NCAGE code. None are difficult, and all are free.

No. Every required registration is free. Be cautious of third parties that charge to complete SAM.gov registration for you, as the process itself carries no government fee.

A missing or inactive registration can prevent an award regardless of how strong your proposal is. Registration status is a pass or fail gate checked before your proposal is evaluated.