Government Contracts 101 [Episode 38]

Jessie Virga
Nov 6, 2025
8 min read

If you’re a small business owner and you’ve thought, “I should get into government contracts,” you’re not alone. Federal, state, county, and city governments buy almost everything:

Plumbing and janitorial services
IT and cybersecurity
Construction and facilities
Training and consulting
Staffing and admin support
Landscaping, maintenance, and more

The money is real. The demand is constant. And the barrier to entry is lower than most people think.

The problem? Most small businesses jump in at the wrong level with the wrong expectations. They either get ignored or quickly get in over their heads.

In this article, I’m walking you through how to start pursuing government contracts in a way that actually works. We’ll talk about the systems, the language, the certifications, and the first-week playbook I recommend.

For context: I’ve been a federal employee, a government contractor, and a contracting officer — one of the people legally allowed to select and award companies to fulfill contracts. I’ve seen this from every side.

1. Government Contracting Isn’t Just “Federal”

When most people hear “government contract,” they immediately think “federal.” That’s part of it, but not the whole picture.

There are multiple layers of government that buy from businesses:

Federal (U.S. government / federal agencies)
State
County
City

These layers matter because each one:

Uses different tax dollars (state vs. county vs. city)
Has its own rules and processes
Often runs its own procurement website

At the local levels (city, county, and state), opportunities are usually posted on e-procurement or vendor registration portals. You can typically find them by searching:

"[your state] procurement portal .gov"
"[your county] e-procurement .gov"

Make sure the site ends in .gov — not .com, not a “helpful” third-party site trying to sell you something. You’re dealing with taxpayer-funded work, so you want to be on official government platforms.

Because each level posts separately, you might have:

City opportunities you’ll never see if you only watch the county site
County opportunities you’ll never see if you only watch the state site

If you’re only looking in one place, you’re already missing money.

2. Federal Contracting Lives on SAM.gov

At the federal level, things are more centralized. Everything runs through SAM.gov.

SAM = System for Award Management.SAM.gov is the official site where you:

Register your business to be eligible for federal contracts
Get your Unique Entity ID (UEI)
Get your CAGE Code
View and pursue active federal opportunities (called solicitations)

Registration in SAM.gov is:

Mandatory if you want to win federal contracts and get paid
Free (if someone tries to charge you to “get registered in SAM,” walk away)

When you register, you’ll provide:

Basic business info
Tax and banking info (for EFT – electronic funds transfer)
Your NAICS codes (we’ll cover these next)
Ownership details (important for small-business set-asides)
Physical address and contact info

Once you’re approved in SAM.gov:

You get a UEI (Unique Entity ID) — this replaced the old DUNS number.
You get a CAGE Code (Commercial and Government Entity Code) — your ID tag in government systems.

If you don’t have a UEI and CAGE code yet, you’re not ready to bid.

3. NAICS Codes: What They Are and Why They Matter

When you register in SAM.gov, you’ll be asked to choose NAICS codes.

NAICS = North American Industry Classification System.It’s how the government categorizes what your business does — basically, “What type of work are you offering them?”

Examples:

IT, cyber, and systems work: often NAICS codes starting with 5415
Construction services: often in the 236xxx range
Janitorial/facility support: often in the 5617xx range

You can (and usually should) select more than one NAICS code if you legitimately provide multiple services.

Here’s why NAICS is more than just paperwork:

Each NAICS code has a size standard set by the Small Business Administration (SBA).
“Small” might be measured in number of employees or annual revenue.
The definition of “small business” changes by industry.

You can look up your size standard at: SBA.gov/size-standards.

Why care? Because many contracts are set aside specifically for small businesses under certain NAICS codes.

If you qualify as small under a NAICS code:

You can compete for set-aside contracts meant just for small businesses.

If you don’t:

You’re competing against large primes and legacy contractors.

4. Your Size Status Is Strategic (Set-Asides)

The government actively wants to award contracts to:

Small Businesses
Women-Owned Small Businesses (WOSB)
Service-Disabled Veteran-Owned Small Businesses (SDVOSB)
8(a) Program businesses (socially and economically disadvantaged)
HUBZone businesses (Historically Underutilized Business Zones)

These categories get access to set-asides — contracts reserved for certain types of businesses.

If you qualify, that’s leverage.If you don’t, you can still team with someone who does.

5. Don’t Limit Yourself to Just Your State

Huge mistake I see all the time: people think, “If I’m in State X, I can only bid on State X contracts.”

Not true.

Many government contracts — especially federal ones — are regional or multi-state.

Example:

A contract is issued out of New York, but the Place of Performance includes New York, New Jersey, and Connecticut.
If you’re a New Jersey company, you might still be eligible.

Always check:

Place of Performance
Licensing/insurance requirements in each state listed
Any mandatory on-site or travel requirements

If you’re willing to support multiple locations, you’ve opened your pipeline.

6. Why You Shouldn’t Jump Straight into $10M Contracts

Once you start browsing SAM.gov or state portals, you’ll see big numbers fast:

$2.3 million
$7.8 million
$12 million

It’s tempting to think: “That would change my life.”

But here’s the reality:

If you bid on a contract you cannot actually perform — staffing, delivery, compliance, reporting, invoicing, security, insurance, schedule — the government can terminate you for default.

That alone is painful. But it also goes into CPARS:

CPARS = Contractor Performance Assessment Reporting System
Think of it as your permanent government report card

Contracting officers do read CPARS.A bad rating can kill your chances of future awards.

So your first win should not be “biggest possible.”Your first win should be: “flawless delivery.”

7. Key Contracting Terms You Need to Know

Government contracting has its own language. Learn these early:

RFI — Request for Information

Not a bid.
Used for market research.
Government asks: Who can do this? What does it cost? How long would it take?
Your responses help them shape the actual contract.

Answering RFIs is a great low-risk way to get on the radar before an official solicitation drops.

RFP — Request for Proposal

This is the real competition.
Government is ready to award.
You’ll be judged on:
- Technical approach
- Past performance
- Pricing

You’ll often see RFPs for work that already exists — these are re-competes, where the current contract is expiring and must be opened up again.

RFQ — Request for Quotation

Used for smaller buys under the Simplified Acquisition Threshold (typically around $250,000).
Less paperwork, more price-focused, often faster than a full RFP.

Amendments

During an active solicitation, the government may issue amendments.
They answer vendor questions, clarify requirements, and correct mistakes.
You must read and incorporate every amendment. Ignore one and your bid can be thrown out as non-responsive.

Mandatory Pre-Bid Meetings

Common at city, county, and state levels.
Often labeled “mandatory.”
If you don’t attend, you can be disqualified even if your proposal is perfect.

8. Prime vs. Subcontractor: How the Money Flows

Most people picture this:

“Winning a contract = the government pays me directly.”

That’s called being the Prime Contractor.

But there’s another strategy — and it’s where most smart small businesses start: becoming a Subcontractor.

The Prime–Sub Relationship

The Prime Contractor wins the contract from the government.
The Prime is legally responsible for delivering the work.
The Prime gets paid by the government.
The Prime hires Subcontractors (“subs”) to help fulfill the work.
The Prime pays the subs.

Example

Government awards a plumbing maintenance support contract.
Budget: $100,000 per plumber per year, and they need four plumbers.
You win as the prime, but you only have two plumbers.
You subcontract another plumbing company for the other two plumbers at $80,000 each.

That $20,000 “difference” per person covers:

Your overhead
Your project management
Your compliance and reporting
Your risk if someone quits
Your profit (yes, you’re allowed to make one)

Everybody wins:

Government gets full support.
You meet the staffing requirement.
The subcontractor gets revenue and past performance they can leverage later.

Now flip it: you can be that subcontractor.

9. Why Starting as a Subcontractor Is Smart

If you’re new to this world, starting as a subcontractor is usually the best move.

You’ll:

Learn how federal and state billing works
Learn the vocabulary
See how audits, reporting, and compliance actually look in real life
Build past performance without having to manage the entire contract

Past performance is currency.

When that contract is re-competed in a few years, you can say:

“We’ve been performing on this contract successfully for X years.”

And that matters.

10. How to Actually Get Subcontract Work

You can’t just sit and hope a prime emails you. You have to go to them.

Step 1: Register in SAM.gov

You must be visible and eligible.

Get your UEI and CAGE code.
List your NAICS codes.
Make yourself contract-ready.

Step 2: Build a Capability Statement

A Capability Statement is a one-page profile that includes:

Who you are
What you do (core competencies)
Past performance (who you’ve done it for, and at what scale)
Certifications/designations (small business, WOSB, SDVOSB, etc.)
Contact info
NAICS codes
CAGE code

It’s not a fluffy marketing brochure — it’s a concise “Here’s what we’re qualified to do, and here’s proof.”

Step 3: Reach Out to Primes

Here’s the play:

Go to USASpending.gov or FPDS.gov (Federal Procurement Data System).
Search by:
- NAICS code
- Agency
- Region/service area
See which companies are already winning the contracts you want.
Email those companies.

Your message can be simple:

“I saw you were awarded [contract name/number] supporting [agency name]. I own [your company name], and we provide [your service]. If you’re looking for additional coverage, surge labor, or a small business partner to help fill any labor categories, here’s our capability statement. Can we connect?”

That’s how teaming starts.

Bonus: SBA SubNet

Check SBA SubNet (SBA.gov/subnet).

It’s a subcontracting board where large primes post opportunities specifically for small businesses.
If you want to slip in under a prime and build performance history, watch this space.

11. Your First-Week Action Plan

If you’re serious, here’s what to do in the next seven days:

Step 1: Register in SAM.gov

Get your UEI and CAGE code.
Add your banking info so you can get paid via EFT.

Step 2: Identify Your NAICS Codes

Make sure they actually describe what you do.
Look up SBA size standards and confirm you’re a small business under those codes.

Step 3: Create Your Capability Statement

One page.
Clean. Clear. No fluff.
Save as a PDF.

Step 4: Answer One RFI

Go on SAM.gov and find at least one RFI in your space.
Respond.
- You’ll learn the language.
- Your business name lands in front of contracting officers and program managers.

Step 5: Build Your Target Prime List

Use USASpending.gov and FPDS.gov to pull recent awards in your NAICS codes.
Create a list with:
- Prime company name
- Contract number
- Agency
- Period of performance
- Contact info
Reach out to at least three primes as a potential subcontractor.

12. Critical Rules So You Don’t Get Disqualified

Before we wrap, here are non-negotiables:

Follow Instructions Exactly

If a solicitation says:

1-inch margins
12-point Times New Roman
20-page technical volume
Signed cover page

Then that’s what you submit.Turn in 22 pages when the limit is 20? They can throw it out unread. That’s compliance, not cruelty.

Attend Mandatory Pre-Bid Meetings

If the notice says “mandatory pre-bid” or “mandatory site visit,” treat it like law.If you’re not there, you’re usually not eligible.

Don’t Lowball Just to Win

Underbidding to “get in the door” is how companies end up:

Bleeding cash
Failing performance
Getting terminated for default
Earning a bad CPARS rating that follows them everywhere

Better to win small and execute perfectly than win big and crash.

Final Takeaway (and Your Next Move)

Government contracting is accessible to small businesses. You don’t need 200 employees or a defense-industry pedigree. You need:

Structure
Credibility
Discipline

So:

Register in SAM.gov.
Get your UEI and CAGE code.
Lock in your NAICS codes.
Build your Capability Statement.
Answer RFIs.
Reach out to primes.
Aim small. Execute flawlessly. Build past performance. Then scale.

That’s the play.

The End.

If you want me to break down capability statements, pricing strategy, or how set-asides work; especially for veteran-owned, woman-owned, and service-disabled veteran-owned businesses, drop your questions in the video comments.

If you’re just here for the EDC and gear content, don’t worry: that’s still happening. In the meantime, share this with another small business owner who’s ready to stop guessing and start playing the government contracting game the right way.

Need a business coach? Click this link!