Selling IT to government in the United States
The US federal government is the largest single buyer of IT in the world, and it is required by law to aim a set share of its contract spending at small businesses. States, counties, cities, school districts and public universities add a large second market, each with its own rules and portals.
Register on SAM.gov
Every firm that wants a federal contract must register in the System for Award Management at SAM.gov. Registration is free; be wary of anyone charging to do it. It gives your firm a Unique Entity ID (UEI) and must be renewed every year.
SAM.gov is also where federal contract opportunities are posted, including notices about planned purchases ("sources sought") that are the best time to get noticed.
Pick your NAICS codes
Each federal opportunity names one NAICS code, which describes the work and sets the size limit for counting as a small business. The common codes for tech work are:
| NAICS code | What it covers |
|---|---|
| 541511 | Custom computer programming services |
| 541512 | Computer systems design services |
| 541513 | Computer facilities management services |
| 541519 | Other computer related services |
| 518210 | Computing infrastructure, data processing and web hosting |
| 541690 | Other scientific and technical consulting |
The Small Business Administration (SBA) publishes the size standard for each code, usually as a cap on average annual revenue. Most firms of 2 to 50 people qualify as small under the IT codes.
Small business set-asides
A set-aside is a contract only small businesses may bid on. The government sets aside many contracts where it expects two or more capable small firms to bid. There are also programs for specific groups:
- 8(a) Business Development Program, for firms owned by socially and economically disadvantaged people.
- HUBZone, for firms based in and employing people from historically underutilized business zones.
- Women-Owned Small Business (WOSB).
- Service-Disabled Veteran-Owned Small Business (SDVOSB).
Set-asides are the most important route in for small IT firms: you compete only against other small firms.
Contract vehicles
Much federal IT is not bought by open tender but through existing contract vehicles that firms must hold first:
- GSA Multiple Award Schedule (MAS): the largest, with an IT category for software, IT services and hardware. Agencies order from schedule holders at pre-negotiated prices.
- Government-wide acquisition contracts (GWACs) and agency IDIQ contracts, under which task orders are competed among holders.
- Blanket purchase agreements (BPAs) set up for repeat buying.
Getting on a GSA Schedule takes preparation and months of review, so many small firms start by subcontracting to existing holders.
Security and compliance
- FedRAMP: cloud services used by federal agencies generally need a FedRAMP authorization.
- CMMC: Department of Defense contractors that handle controlled unclassified information must meet a set CMMC level.
- Section 508: federal websites and software must be accessible to people with disabilities.
- Security clearances for staff on classified work, sponsored by the agency.
State and local government
States, counties and cities buy a great deal of IT, often in smaller contracts that suit small firms. Each runs its own system, such as Cal eProcure in California, ESBD in Texas and the City Record and PASSPort in New York City. Many states have their own small or diverse business certifications and cooperative contracts that other public bodies can buy from.
Can foreign firms bid?
Sometimes. Foreign firms can register on SAM.gov, and trade agreements including the WTO Government Procurement Agreement open some federal contracts above set values to suppliers from partner countries. But small business set-asides are limited to US small businesses, the Buy American Act and other rules favour US products, and much defence and security work is closed to foreign firms. For most foreign IT firms, the realistic route is partnering with or subcontracting to a US firm.
How to get started
- Register on SAM.gov and get your UEI.
- Pick your NAICS codes and check you qualify as small for each.
- Register with the SBA's small business search so contracting officers and primes can find you.
- Search SAM.gov for small business set-asides and sources-sought notices in your codes.
- Register on the state and city portals where you work, and bid on local contracts while you build federal past performance.
- Read how to win government IT contracts for the bid itself.
Common questions
How much does it cost to register on SAM.gov?
Nothing. Registration on SAM.gov is free. Some third-party companies charge to do it for you, but you can register directly.
What NAICS code should a software development company use?
Most software development firms use 541511 (custom computer programming services), often with 541512 (computer systems design services) and 541519 (other computer related services).
Do I need a GSA Schedule to win federal IT contracts?
No. Many federal IT contracts, especially small business set-asides, are competed openly on SAM.gov. A GSA Schedule widens what you can bid on and lets agencies order from you more easily.
Can a Canadian company win US government contracts?
Yes, in some cases. Canadian firms can register on SAM.gov and bid on contracts covered by trade agreements, but they cannot bid on small business set-asides. Partnering with or subcontracting to a US firm is the most common route.