Why Government Contracting Matters for Your Business
The U.S. federal government spends over $700 billion annually on contracts with private businesses. From IT services and construction to medical supplies and consulting, nearly every industry has a place in federal procurement. For businesses of all sizes, government contracts offer a stable, recession-resistant revenue stream backed by the full faith and credit of the United States.
Small businesses are especially well-positioned. Congress has mandated that at least 23% of all federal contracting dollars go to small businesses, with additional targets for disadvantaged groups including service-disabled veteran-owned, women-owned, and HUBZone businesses. In fiscal year 2023, the government awarded over $178 billion to small businesses alone.
Despite the opportunity, many businesses never pursue government contracts because the process seems opaque or complicated. The truth is that finding opportunities has become significantly easier with modern tools and databases. The key is knowing where to look and how to filter the thousands of active solicitations down to the ones that matter for your business.
Where to Find Federal Contracts
The primary source for all federal contracting opportunities is SAM.gov (System for Award Management), operated by the General Services Administration. SAM.gov replaced the older FedBizOpps (FBO) system and serves as the single official point of entry for government procurement notices. Any federal contract opportunity valued over $25,000 must be posted here.
SAM.gov lists tens of thousands of active opportunities at any given time, including solicitations, pre-solicitation notices, sources sought, and award notices. While the platform is comprehensive, its search interface can be challenging to navigate efficiently. Many contractors supplement SAM.gov with third-party tools that offer better search, filtering, and alert capabilities.
Beyond SAM.gov, some agencies maintain their own procurement portals. The Department of Defense uses the Defense Logistics Agency (DLA) internet bid board system for certain procurements. NASA has its own acquisition portal (NSSC). GSA Advantage is the marketplace for GSA Schedule holders. However, all major opportunities will eventually appear on SAM.gov.
Understanding Notice Types
Not every posting on SAM.gov is a contract you can immediately bid on. Understanding the different notice types helps you prioritize your time and identify opportunities at the right stage. The notice type tells you where in the procurement cycle an opportunity currently sits.
Solicitations and Combined Synopsis/Solicitations are the most actionable notice types — these are active requests for proposals where the government is ready to receive bids. A Combined Synopsis/Solicitation combines the announcement and the actual solicitation into a single posting, which is common for simpler procurements.
Pre-Solicitation notices signal that a solicitation is coming soon but hasn’t been released yet. These are valuable because they give you time to prepare your team, identify teaming partners, and start drafting your approach before the clock starts ticking. Sources Sought notices are even earlier in the process — the government is researching the market to understand what capabilities exist before deciding how to structure the procurement.
- Solicitation — Active request for proposals; ready to bid
- Combined Synopsis/Solicitation — Announcement and solicitation combined; common for simplified acquisitions
- Pre-Solicitation — Advance notice that a solicitation is forthcoming
- Sources Sought — Market research; great for shaping the eventual solicitation
- Award Notice — Announcement of a contract award; useful for competitive intelligence
- Special Notice — General information; may include draft documents or industry days
Effective Search Strategies
The biggest mistake new contractors make is searching too broadly. Typing "IT services" into SAM.gov returns thousands of results, most of which won't be relevant to your specific capabilities. Instead, use NAICS codes (North American Industry Classification System) to narrow your search to your industry classification. Every federal solicitation is tagged with one or more NAICS codes.
Combine NAICS codes with set-aside filters to find opportunities specifically designated for your business category. If you're an 8(a) certified firm, filtering for 8(a) set-asides immediately eliminates the vast majority of competition. Similarly, HUBZone, SDVOSB, and WOSB filters target opportunities reserved for those programs.
Agency-specific searches can also be highly effective. If you've done work for the Department of Health and Human Services before, filtering by that agency helps you find follow-on opportunities and related work. Government agencies tend to buy similar services repeatedly, so past performance with a specific agency is a strong competitive advantage.
Value range filtering helps you focus on contracts that match your capacity. A five-person firm probably shouldn’t be chasing $500 million IDIQ vehicles, and a large business shouldn’t waste time on micropurchases. Set realistic value ranges that align with your past performance and current capabilities.
Evaluating Whether to Bid
Finding an opportunity is only the first step. The decision to pursue a bid is one of the most important choices a contractor makes, because the proposal process requires significant time and resources. A disciplined bid/no-bid decision framework saves you from chasing contracts you're unlikely to win.
Start with the basics: Can you actually perform the work? Do you have the required NAICS code and appropriate size standard? Does the set-aside match your certifications? Is the period of performance realistic given your current workload? Are you registered in SAM.gov and any other required systems?
Next, assess your competitive position. Do you have relevant past performance? Have you worked with this agency or contracting office before? Can you offer a credible technical approach? Do you have the key personnel specified in the solicitation? If you’re answering "no" to most of these questions, your probability of winning is low regardless of how well you write the proposal.
Finally, look at the practical aspects. Is the response deadline realistic? Can you assemble a competitive team? Is the contract value worth the cost of proposing? A general rule of thumb is that proposal costs run 1-3% of the contract value, so make sure the potential return justifies the investment.
Staying Ahead of the Competition
The most successful government contractors don’t just react to solicitations — they anticipate them. Tracking pre-solicitation notices and sources sought postings gives you weeks or months of lead time before a formal solicitation drops. Use this time to research the agency’s needs, build relationships with the contracting office, and position your company as a capable partner.
Responding to sources sought notices with a detailed capabilities statement is one of the most underused strategies in government contracting. It costs nothing to respond, and it puts your company on the agency’s radar while demonstrating your interest and qualifications. Many small business set-asides are created because enough qualified small businesses responded to a sources sought notice.
Automated alerts are essential for any serious contractor. Manually checking SAM.gov every day is unsustainable, especially when you’re also managing active contracts and proposals. Tools like FedOverwatch can monitor new postings that match your NAICS codes, set-aside categories, and target agencies, delivering relevant opportunities directly to you.
Common Mistakes to Avoid
Letting your SAM.gov registration lapse is the most common preventable mistake. Your registration must be renewed annually, and an expired registration makes you ineligible to receive awards. Set a calendar reminder 60 days before expiration and start the renewal process early.
Submitting proposals after the deadline is another frequent issue. Government contracting officers have virtually no discretion to accept late submissions. Even one minute past the deadline means your proposal goes straight to the rejection pile, regardless of how strong it is. Build a buffer of at least 24-48 hours before any deadline.
Many new contractors also make the mistake of trying to be everything to everyone. The government values specialization and demonstrated expertise. A focused capabilities statement that highlights your specific strengths and relevant experience will always outperform a generic pitch that tries to cover every possible service area.
Getting Started Today
Federal government contracting is one of the largest and most reliable markets available to American businesses. While the process has a learning curve, the fundamentals are straightforward: register in SAM.gov, identify your NAICS codes, understand the notice types, and systematically search for opportunities that match your capabilities.
The contractors who succeed are the ones who treat opportunity identification as an ongoing, systematic process rather than an occasional search. Whether you use SAM.gov directly or leverage tools like FedOverwatch to automate the discovery process, consistency and discipline in your search habits will directly translate to more wins.