How to Bid on Government Contracts: A Step-by-Step Guide for Small Businesses

1. Register your business on SAM.gov (free)

Every company that wants a federal contract needs an active entity registration on SAM.gov. Registration is free; private companies that charge for it are optional services, not the government. Plan for several days and allow about 10 business days for the registration to be validated and marked Active, and renew it every 365 days.

Registration gives you a Unique Entity ID (UEI) and, for most US businesses, a CAGE code. You will list your NAICS codes and complete the representations and certifications during registration.

2. Choose your NAICS codes and check your size

NAICS codes describe what you sell, and every federal solicitation names one. The SBA size standard attached to that code decides whether you count as a small business for that contract, so pick the codes that match the work you can actually deliver.

3. Find solicitations that fit

Federal opportunities are posted on SAM.gov under Contract Opportunities. Search by NAICS code, set-aside type and place of performance, and save the search so new notices arrive by email. State and local governments post on their own portals; in Texas that is the Electronic State Business Daily (ESBD).

• Sources sought / RFI: the agency is researching the market. Responding is optional but can shape a small-business set-aside.
• Presolicitation: a heads-up that a solicitation is coming.
• Combined synopsis/solicitation and solicitation (RFQ, RFP, IFB): the actual bid opportunity with a due date.
• Award notice: who won and for how much, useful for pricing the next one.

4. Decide whether it is worth bidding

Score each opportunity before you write anything. Check that you match the NAICS code, that you hold any set-aside it requires, that the value and location fit your capacity, that there is enough time to respond, and how it will be evaluated: lowest price technically acceptable (LPTA) or best value.

Federal purchases up to the micro-purchase threshold ($15,000) can be bought without competition, and many purchases above it up to the simplified acquisition threshold ($350,000) use faster simplified procedures and are often reserved for small businesses. Both thresholds took effect October 1, 2025.

5. Research the incumbent and the last price paid

Before setting a price, look up the previous contract on USASpending.gov. The solicitation, its Q&A or the award history often names the incumbent or the predecessor contract number, which shows exactly what the government paid per year. That number is a better anchor than a guess. See our guide to pricing a government contract bid.

6. Ask questions before the Q&A deadline

Most solicitations set a deadline for written questions. Ask about anything that changes your price or approach: quantities, site access, wage determinations, whether subcontractor experience counts. Answers are usually published to all bidders as an amendment or Q&A document.

7. Write a compliant proposal

Follow the instructions to the letter: page limits, file format, volumes and required forms. Address every evaluation factor by name and mirror the language of the Performance Work Statement (PWS) or Statement of Work (SOW). Acknowledge every amendment. A strong proposal that misses a required form can be rejected without being read.

8. Submit exactly as instructed, early

Submit by the method the solicitation names (email, PIEE, a state portal) and before the stated time and time zone. Late proposals are generally not accepted. Keep the confirmation of receipt.

9. Follow up and learn from every result

If you win, read the contract and prepare for the start date. If you lose, the award notice shows the winning price, and you can usually request a debriefing for negotiated procurements. Feed what you learn into the next bid.