The federal government spends over $700 billion annually on contracts, and by law, 23% of that is supposed to go to small businesses. That's over $160 billion in set-aside contracts alone. But finding the right opportunities — the ones you can actually win — is harder than it should be.

This guide walks you through the process from zero to your first bid, with honest advice about what works and what's a waste of time.

Step 1: Register on SAM.gov

Before you can bid on any federal contract, you need to be registered in the System for Award Management (SAM.gov). This is non-negotiable — no registration, no contracts.

Here's what you need:

  1. Get a UEI (Unique Entity Identifier). This replaced the old DUNS number. You get it for free during SAM.gov registration.
  2. Create a SAM.gov account at sam.gov. Use a login.gov account for authentication.
  3. Complete your Entity Registration. You'll need your EIN, CAGE code (assigned automatically), banking information for payment, and details about your business (size, ownership, NAICS codes).
  4. Wait for validation. SAM.gov registration takes 7-10 business days to process. Sometimes longer. Plan accordingly.
  5. Renew annually. Your registration expires every 365 days. Set a calendar reminder — an expired registration means you can't receive contract payments.

Start your SAM.gov registration now, even if you're not ready to bid yet. The 7-10 day processing time means you don't want to be waiting when a perfect opportunity appears.

Step 2: Get Your NAICS Codes Right

NAICS (North American Industry Classification System) codes categorize what your business does. Federal contracts are tagged with NAICS codes, and your SAM.gov profile lists the codes that apply to your business.

Picking the right NAICS codes is more important than most new contractors realize. The wrong codes mean you won't show up in searches, you might not qualify for size standards (the SBA defines "small business" differently for each NAICS code), and you'll miss opportunities that match your capabilities.

Most businesses should list 5-10 NAICS codes. Your primary code matters most — it determines your small business size standard — but secondary codes help you show up in more searches.

Step 3: Understand Set-Asides

Set-asides are the federal government's way of ensuring small businesses get a fair share of contracts. When a contract is "set aside," only businesses that meet certain criteria can bid. This dramatically reduces your competition.

The main set-aside categories:

  • Small Business (SB): Any business that meets the size standard for the contract's NAICS code. This is the broadest category.
  • 8(a) Business Development: For economically and socially disadvantaged businesses. Provides access to sole-source contracts up to $4.5M.
  • HUBZone: For businesses in Historically Underutilized Business Zones. Must have 35% of employees living in a HUBZone.
  • Service-Disabled Veteran-Owned Small Business (SDVOSB): At least 51% owned by service-disabled veterans.
  • Women-Owned Small Business (WOSB): At least 51% owned and controlled by women.

If you qualify for any of these categories, you should absolutely certify. Set-aside contracts have less competition and some agencies have specific targets for each category. Even a small business set-aside cuts your competition from hundreds of potential bidders to dozens.

Step 4: Learn Where to Search

Once you're registered and know your NAICS codes, you need to find opportunities. Here are the primary channels:

SAM.gov Contract Opportunities

This is the official source. Every federal contract over $25,000 must be posted here. You can search by keyword, NAICS code, set-aside type, agency, and location. The search is functional but frustrating — filters break, results are noisy, and the email alerts are unreliable.

Agency-Specific Forecast Sites

Many federal agencies publish procurement forecasts — lists of contracts they plan to award in the coming year. These are gold for planning. You can find upcoming opportunities months before they hit SAM.gov. Check the "Small Business" or "OSDBU" pages on agency websites.

SubNet (Subcontracting Network)

Large prime contractors are often required to subcontract a percentage of work to small businesses. SubNet on SAM.gov lists subcontracting opportunities. This is an excellent entry point if you don't have past performance on federal contracts yet.

Paid Contract Alert Tools

If SAM.gov's search is costing you time, paid tools can help. Options range from GovContract Alerts at $29/mo to enterprise platforms at $2,500/mo. The affordable options typically give you better matching, reliable email alerts, and cleaner search results.

Step 5: Set Up a Daily Alert System

Government contracting is a pipeline business. Opportunities are posted daily, and response windows are typically 15-30 days. If you're not checking regularly, you'll miss deadlines.

Here's what a practical daily system looks like:

  1. Morning check: Review any alert emails from SAM.gov or your paid tool (5-10 minutes).
  2. Quick assessment: For each relevant opportunity, ask: Do we qualify? Can we do the work? Is the timeline realistic? Do we have (or can we get) the past performance? (2-3 minutes per opportunity).
  3. Go/no-go decision: Only pursue opportunities where you have a realistic shot. Bidding on everything is a recipe for burnout and wasted proposal costs.
  4. Calendar it: For opportunities you'll pursue, immediately add the response deadline, any pre-bid conference dates, and questions deadline to your calendar.

The biggest mistake new government contractors make isn't picking the wrong contracts — it's not having a consistent system for finding and evaluating them. Set up your daily alert process before you start searching for individual opportunities.

Step 6: Consider Subcontracting as Your Entry Point

If you've never held a federal contract, you face a classic catch-22: you need past performance to win contracts, but you need contracts to get past performance.

Subcontracting solves this. When you work as a subcontractor to a large prime contractor, you:

  • Build federal past performance without the risk of being the prime
  • Learn how federal contracts actually work (invoicing, reporting, compliance)
  • Build relationships with agencies that could lead to future prime contracts
  • Generate revenue while you build your contracting capabilities

To find subcontracting opportunities: check SubNet on SAM.gov, attend agency industry days and small business events, and reach out directly to prime contractors in your space. Many large primes have active small business liaison offices specifically looking for subcontractors.

Step 7: Use Free Resources

Before spending money on tools and consultants, take advantage of the free resources available:

  • APEX Accelerators (formerly PTACs): Free counseling centers in every state that help small businesses with government contracting. They'll review your capability statement, help with SAM.gov registration, and even help you write proposals.
  • SBA District Offices: Offer training, counseling, and connections to federal procurement opportunities.
  • Agency OSDBU Offices: Every major agency has an Office of Small and Disadvantaged Business Utilization. They're literally paid to help small businesses work with their agency.

Common Mistakes to Avoid

  1. Bidding on everything. Each proposal costs time and money. Be selective. A focused pipeline of 5 well-targeted bids beats 50 spray-and-pray submissions.
  2. Ignoring past performance. If the solicitation asks for 3 references of similar work and you have zero, don't bid. Use that time to build past performance through subcontracting.
  3. Waiting for the perfect opportunity. Your first contract probably won't be your dream contract. Start small, build credibility, then pursue bigger opportunities.
  4. Not reading the solicitation carefully. Government solicitations are long and detailed for a reason. Missing a single requirement — a specific certification, insurance level, or formatting instruction — can disqualify your proposal.
  5. Going it alone. Government contracting has a learning curve. Use APEX Accelerators, attend industry days, join small business associations. The people who succeed build networks.

Getting Started Today

Don't overthink it. Here's your action list for this week:

  1. Start your SAM.gov registration (if you haven't already)
  2. Identify your top 5-10 NAICS codes
  3. Find your local APEX Accelerator and schedule an appointment
  4. Set up daily contract alerts (SAM.gov free alerts or a paid tool like GovContract Alerts)
  5. Look at SubNet for subcontracting opportunities in your space

Government contracting isn't quick money. It takes 6-12 months from starting your registration to winning your first contract. But for businesses that stick with it, it's one of the most stable and predictable revenue streams available. The government always buys, even in recessions.