How to Win Your First Government Contract

If you have ever wondered how to win your first government contract, you are not alone. Thousands of small business owners know the opportunity is massive but have no idea where to begin. The process can feel overwhelming — unfamiliar acronyms, bureaucratic registration systems, and proposal formats that look nothing like a typical business pitch. But here is the truth: the government wants to work with small businesses. There are programs, set-asides, and entire offices dedicated to helping you get started. This guide breaks the whole process into plain-English steps so you can go from "I've heard government contracts are lucrative" to actually submitting your first proposal.

Why Government Contracts Are Worth Pursuing

The federal government is the single largest buyer of goods and services on the planet. In fiscal year 2024, federal agencies spent over $700 billion on contracts with private businesses. That is not a typo. And it is not just the Department of Defense — every agency, from the Department of Agriculture to the National Park Service, buys everything from IT consulting to janitorial services to office furniture.

What makes this especially attractive for small businesses is that the federal government has a standing goal to award at least 23% of all federal contracting dollars to small businesses. That is over $160 billion a year earmarked specifically for companies like yours. State and local governments add hundreds of billions more on top of that.

Beyond the sheer size of the market, government contracts offer something rare in business: reliable payment. The government does not go bankrupt. Invoices are paid on a predictable schedule (typically net 30), and the Prompt Payment Act even requires agencies to pay interest on late invoices. Compared to chasing down invoices from commercial clients, that alone is a reason many businesses pursue public-sector work.

Government contracts also tend to be multi-year relationships. A typical contract might have a one-year base period with four one-year option periods — meaning one win can turn into five years of steady revenue. That kind of predictability makes it easier to hire, invest in equipment, and plan for growth.

What You Need Before You Start

Before you can pursue any government contract, you need a few things in order. Think of this as your pre-flight checklist. None of these cost much (most are free), but they take time to set up, so do not wait until you find an opportunity to start.

• A legally formed business entity. You need an LLC, corporation, sole proprietorship, or partnership that is registered with your state. The government does not contract with individuals — they contract with businesses.
• An Employer Identification Number (EIN). This is your business's tax ID from the IRS. You can get one online in minutes and it is free.
• A business bank account. You will need this to receive payments. Government agencies pay via electronic funds transfer (EFT), so a business checking account is a must.
• A Unique Entity Identifier (UEI). This replaced the old DUNS number in 2022. You get your UEI when you register on SAM.gov — it is assigned automatically during the process.
• SAM.gov registration. This is the big one. The System for Award Management is the federal government's official database of approved vendors. If you are not registered here, you cannot receive a federal contract. More on this below.
• Your NAICS codes. North American Industry Classification System codes categorize what your business does. You will select these during SAM.gov registration, and they determine which opportunities you are eligible for.

8 Steps to Win Your First Government Contract

Here is the step-by-step roadmap. Each step builds on the last, so follow them in order. Some can run in parallel (like writing your capability statement while your SAM.gov registration processes), but the sequence matters.

Step 1: Register on SAM.gov

SAM.gov is your gateway to federal contracting. No registration, no contracts — it is that simple. When you register, you will receive a Unique Entity Identifier (UEI), which is the number that identifies your business in every federal system.

Here is what to expect:

• You will need your EIN, business address, banking information (for EFT payments), and details about your business type and ownership.
• The system will ask you to select your NAICS codes (see Step 2) and identify your business size.
• Initial registration takes 2 to 4 weeks to process. Plan accordingly — do not wait until you find an opportunity to start this.
• Your registration must be renewed annually. Set a calendar reminder.

Step 2: Identify Your NAICS Codes

NAICS codes are the classification system the government uses to categorize businesses. Each code corresponds to an industry — for example, 561720 is "Janitorial Services" and 541512 is "Computer Systems Design Services."

Your NAICS codes matter for two reasons:

• They determine your size standard. The SBA sets revenue or employee thresholds for each NAICS code that define whether you count as a "small business" for that industry. Being classified as small opens the door to set-aside contracts.
• They filter which opportunities you see. Contracting officers search for vendors by NAICS code, so picking the right ones is critical to being found.

You can list multiple NAICS codes on your SAM.gov profile, but be honest. Only list codes that genuinely reflect the work you do. Padding your profile with irrelevant codes can actually hurt your credibility.

Step 3: Check If You Qualify for Set-Asides

Set-asides are one of the biggest advantages small businesses have in government contracting. These are contracts that are restricted to specific categories of small businesses, meaning large corporations cannot compete for them. The main set-aside programs include:

• 8(a) Business Development Program: For small businesses owned by socially and economically disadvantaged individuals. This is one of the most powerful programs — 8(a) firms can receive sole-source contracts up to $4.5 million without competition.
• HUBZone Program: For businesses located in Historically Underutilized Business Zones. If your office is in a qualifying area, this can give you a significant competitive edge.
• Women-Owned Small Business (WOSB): For businesses that are at least 51% owned and controlled by women. Certain industries have specific WOSB set-asides.
• Service-Disabled Veteran-Owned Small Business (SDVOSB): For businesses owned by service-disabled veterans. The VA in particular has aggressive SDVOSB contracting goals.
• Veteran-Owned Small Business (VOSB): For any veteran-owned business, even without a service-connected disability.

If you qualify for any of these programs, apply immediately. Set-asides dramatically reduce your competition. Instead of bidding against hundreds of companies, you might be competing against a handful — or in some cases, you may be the only bidder.

Step 4: Write Your Capability Statement

Your capability statement is the resume of your business. It is a one- to two-page document that contracting officers, prime contractors, and small business liaisons use to quickly evaluate whether you are a fit for their needs.

A strong capability statement includes:

• Your core competencies (what you do)
• Past performance (proof you have done it)
• Differentiators (why you over someone else)
• Company data (UEI, CAGE code, NAICS codes, certifications)
• Contact information
• A brief company overview

We have a complete guide to writing a capability statement that walks you through each section with examples. Do not skip this step — it is the document you will hand out at every networking event, attach to every email, and submit with many proposals.

Step 5: Find Opportunities

With your registration complete and capability statement in hand, it is time to find contracts to bid on. Here are the main places to look:

• SAM.gov Contract Opportunities: This is the primary source for federal opportunities over $25,000. You can search by keyword, NAICS code, agency, location, and set-aside type. Set up saved searches to get email notifications for new opportunities that match your profile.
• Agency forecast sites: Many federal agencies publish annual procurement forecasts listing what they plan to buy in the coming year. The GSA, Department of Defense, and Department of Veterans Affairs all publish these.
• State and local procurement portals: Every state has its own procurement website. These are often less competitive than federal contracts and a great place to build your track record.
• Subcontracting opportunities: Large prime contractors on federal contracts are often required to subcontract a percentage of work to small businesses. Check the SBA's SubNet database or reach out directly to primes working in your industry.

Step 6: Start Small — Micro-Purchases, Simplified Acquisitions, and Subcontracting

Here is the advice most people skip, and it is arguably the most important: do not try to win a $5 million contract as your first one. Start at the shallow end of the pool.

Step 7: Respond to Your First RFP

When you find an opportunity that matches your capabilities, it is time to write a proposal. This is where many first-timers get intimidated, but it does not have to be painful. The key principles:

• Read every single page of the solicitation. Government RFPs include specific instructions about format, content, page limits, and evaluation criteria. Missing a single instruction can get your proposal thrown out before anyone reads it.
• Answer exactly what they ask. Do not write a general marketing pitch. If they ask for three past performance references in a specific format, provide exactly three in that exact format.
• Focus on compliance first, then quality. A perfectly written proposal that ignores a formatting requirement will lose to an average proposal that follows every rule. Compliance is the price of admission.
• Be specific. Instead of "we have extensive experience," write "we cleaned 14 federal buildings totaling 890,000 square feet over a 3-year period with a 98% inspection pass rate." Numbers and specifics beat adjectives every time.

When you are ready to respond to RFPs, tools like Bidara can help small teams produce professional proposals without hiring a dedicated proposal writer. But whether you use software, hire a consultant, or write it yourself, the principles above apply.

Step 8: Build Past Performance and Grow

Once you win your first government contract — even a small one — you are in a fundamentally different position. You now have past performance, which is the government's version of a track record. Past performance is one of the most heavily weighted evaluation criteria in government proposals.

After every completed contract:

• Document your results with specific, measurable outcomes.
• Request a reference from the contracting officer or COR (Contracting Officer's Representative).
• Update your capability statement with the new contract.
• Update your SAM.gov profile.
• Use this past performance to pursue larger, more competitive opportunities.

The progression is natural: micro-purchase leads to a simplified acquisition, which leads to a full-and-open competition win, which leads to a multi-year contract. Each step builds on the last. The hardest part is getting that first contract — and if you have followed the steps above, you are well on your way to winning your first government contract.

How Long Does It Realistically Take?

Let us be honest about timelines, because nothing kills motivation faster than unrealistic expectations.

From the moment you decide "I want to pursue government contracts" to actually winning your first government contract, you should plan for 3 to 6 months. Here is a rough breakdown:

• Weeks 1-2: Get your business documents in order, apply for an EIN (if you do not have one), start your SAM.gov registration.
• Weeks 2-6: While SAM.gov processes, research NAICS codes, check set-aside eligibility, write your capability statement, and contact your local APEX Accelerator for guidance.
• Weeks 6-12: Start searching for opportunities, attend matchmaking events, reach out to prime contractors, and submit your first proposals.
• Months 3-6: Proposals are evaluated. Government procurement timelines are notoriously slow — a solicitation that closes in March might not award until July. Use this time to keep bidding and building relationships.

Some businesses move faster, especially with micro-purchases. Others take longer, particularly in industries with heavy competition. But six months from zero to first contract is a reasonable, achievable target for most small businesses.

The 5 Most Common Mistakes First-Timers Make

After helping many small businesses navigate their path to a first government contract, these are the mistakes we see most often:

1. Bidding on Everything

New businesses often take a "spray and pray" approach, responding to every opportunity they find. This wastes enormous amounts of time and produces low-quality proposals. Be selective. Focus on opportunities where your NAICS codes match, the scope aligns with your actual capabilities, and the contract size is realistic for your company. Three well-crafted proposals will always outperform twenty rushed ones.

2. Ignoring Set-Asides They Qualify For

Some businesses do not even realize they qualify for set-aside programs like 8(a), HUBZone, or WOSB. Others know they qualify but never bother to apply because the certification process seems complicated. This is leaving money on the table. Set-asides are the single biggest advantage small businesses have. Check your eligibility at SBA.gov and apply if you qualify.

3. Not Networking

Government contracting is a relationship business. Attending industry days, small business matchmaking events, and pre-solicitation conferences gives you access to contracting officers, prime contractors, and other small businesses. The SBA's local offices and APEX Accelerators host these events regularly. Showing up matters.

4. Underpricing to Win

It is tempting to bid as low as possible, thinking that price is the only thing that matters. But government evaluations typically use a "best value" approach that weighs technical capability, past performance, and price together. A rock-bottom price with a weak technical approach will lose to a higher-priced proposal that clearly demonstrates competence. Price your work to be competitive, but make sure you can actually deliver profitably.

5. Poor Compliance

Government proposals have strict rules — page limits, font sizes, margin requirements, required sections in a specific order, and submission deadlines down to the minute. Evaluators are not being difficult for the sake of it. Compliance requirements exist to ensure fairness. Missing a deadline by five minutes or exceeding a page limit by one page can result in your proposal being rejected without review. Read the solicitation instructions twice, create a compliance checklist, and have someone else verify it before you submit.

Frequently Asked Questions

You Are Closer Than You Think

Winning your first government contract is not about having the biggest company, the most experience, or the best connections. It is about doing the work: registering properly, finding the right opportunities, writing a solid proposal, and being persistent. The government has programs specifically designed to help small businesses like yours break in. Take advantage of them.

Start with Step 1 today. Go to SAM.gov, create your account, and begin your registration. While it processes, contact your local APEX Accelerator and start working on your capability statement. In a few weeks, you will be ready to find and bid on your first opportunity. Six months from now, you could be a government contractor.