Less than 1% of Small Businesses take the step to do work with the U.S. Federal Government. An even smaller subset of this group goes on to do business with the Department of Defense. The reason for this is that the federal government seems daunting enough, and then add the security that goes along with the DoD and it seems out of reach for most businesses. I will now go into the various ways DoD Contract for Small Businesses can be achieved and the benefits of working with the DoD, and how it is like doing work with the rest of the federal government.
The Department of Defense is the largest federal agency and spends over $85 billion per year with small businesses. In addition, 25% of all DoD contracts are prime DoD Contracts for Small Businesses, so this $85 billion is not made up of subcontracts. Small businesses working as subcontractors on DoD contracts represent an additional $77 billion per year in federal spending.
For very small businesses that are having trouble getting signed up with sam.gov or would like to have someone work through the SBA Certification process there are 96 Apex Accelerator locations in the U.S that assist with getting DoD Contracts for Small Business. These locations were formerly called PTAC offices, but the name was changed in recent years. For small businesses with more experience under their belts the annual conferences or match making events that the Apex Accelerator program offers can be a great way to meet key decision makers at the DoD.
DoD contract for small businesses can be hard to win because they are likely to need some level of specialization due to the special needs of the Department of Defense. The DoD awarded $5 billion in contracts to Joint Venture and Mentor Protégé small business arrangements in 2023. Combining two firms to produce a better result for procurement can be a key strategy for small businesses wanting to work with the DoD. This gives a small business that can only complete part of a procurement the ability to still bid on the procurement.
GSA Schedule Contracts are a great way to obtain DoD contracts for small business. A GSA Contract can be especially effective for firms that are looking to sell products that are less than $10,000. By obtaining a GSA Schedule a firm can then obtain a position on Fedmall now called Emall which is the place where the military goes to make product purchases.
The Department of the Navy has a contracting vehicle called Seaport E, now Seaport NxG. Seaport NxG becomes open every few years. A position on this contracting vehicle results for most firms in over a million per year in IT sales to the federal government. There are other GWAC and IDIQ DoD contracts for small business and keeping up when these contracts become open is an important strategy.
DoD will often have Sole Source and Set-aside contracts for groups with SBA special designations in attempt for the DoD to achieve its social/economic inclusiveness goals. These DoD contracts for small business can be tens of thousands of dollars or as large as tens of millions of dollars.
8(a) – Typically for minority owned businesses that suffer from social and economic disadvantage.
HUBZone – Historically Underutilized Business Zones based upon unemployment statistics.
SDVOSB – Services Disabled Veteran Owned Small Businesses
WOSB – Woman Owned Small Businesses
Small Businesses – Businesses that are classified as small based upon their NAICS Code by the SBA.
There are many ways to obtain DoD contracts, feel free to give us a call and we can help you develop a strategy for breaking into this large federal marketplace.
