Government Contracting Guide · Federal
The world’s biggest buyer reserves a share for you.
SAM.gov, size standards, set-asides and the thresholds that changed in 2025.
Federal government contracts are open to any registered U.S. business, and Congress requires agencies to set aside a share for small businesses, so a small firm with the right registration can compete for real federal work.
In fiscal year 2024, federal agencies awarded $183.5 billion, 28.76% of eligible prime contract dollars, to small businesses, beating the 23% governmentwide goal. Not every group did as well: HUBZone firms received 2.75%, below their 3% goal. These goals push agencies to look for small businesses first.
Federal small business results, FY2024
Source: SBA Small Business Procurement Scorecard.
Step one: register in SAM.gov
Every federal contractor registers in SAM.gov, the System for Award Management. Registration is free; beware of companies that charge for it. You receive a Unique Entity ID (UEI), list your NAICS codes and certifications, and must renew every year. Your SAM.gov profile is also where contracting officers and primes search for small businesses, so fill in every field.
Size standards and NAICS codes
Whether you are “small” depends on your industry. SBA sets size standards for each NAICS code, either by average annual receipts or number of employees. A firm can be small in one code and not in another, so check every code you list.
Thresholds that changed on Oct. 1, 2025
An inflation adjustment raised two key federal thresholds. The micro-purchase threshold is now $15,000: below that, a government purchase card holder can often buy without competition. The simplified acquisition threshold is now $350,000: purchases between the two are generally set aside for small businesses when two or more capable small firms are expected to bid at a fair price.
Set-asides and socioeconomic programs
- Small business set-asides are open only to firms that are small under the NAICS code.
- 8(a), HUBZone, WOSB and SDVOSB programs allow set-asides and sole-source awards for certified firms.
- GSA Schedules let agencies buy from pre-approved vendors; many small firms join after building past performance.
A realistic first year
Your federal starter plan
- Register in SAM.govFree; renew every year.
- Pick NAICS codesCheck SBA size standards for each one.
- Write a capability statementOne page with codes, UEI, past performance and contact.
- Search opportunitiesSave SAM.gov searches for your codes and set-asides.
- Meet small business officesEach agency has an Office of Small and Disadvantaged Business Utilization.
Mistakes to avoid
- Paying a third party for SAM.gov registration, which is free.
- Letting SAM.gov expire, which blocks awards and payment.
- Bidding on everything instead of a few agencies that buy what you sell.
- Skipping subcontracting, the fastest way to build federal past performance.
What the federal government buys
Federal agencies buy almost everything a business sells: IT services and equipment, construction and repair, janitorial and grounds care, training, translation, marketing, research, medical supplies, furniture, food and logistics. Military bases, national parks, veterans hospitals, federal courts and field offices are spread across the country, and each one buys locally for many of its needs. That is why a small firm near a federal facility often has a real edge on service contracts.
How to read a federal solicitation
A federal solicitation can run dozens of pages, but the key parts are predictable. The statement of work or performance work statement describes what the agency needs. The instructions tell you how to format and submit your response, and the evaluation criteria tell you how it will be scored. Clauses list the rules you must follow if you win, such as labor standards and reporting. Read the whole document, list every requirement, and submit questions before the question deadline. Amendments change the solicitation, and each one must be acknowledged.
Getting paid by the federal government
Federal agencies generally must pay a proper invoice within 30 days or owe interest under the Prompt Payment Act, and most invoices are submitted electronically. Your SAM.gov banking information must be correct, because payments go to the account on file. Keep the registration active for the life of the contract; an expired registration can delay payments as well as new awards.
Choosing your first federal targets
The federal market is so large that the hardest part is focus. Pick two or three agencies that buy what you sell, ideally ones with offices near you. Look up their past awards for your NAICS codes on USAspending.gov to see how often they buy, how big the contracts are and who wins them. Read each agency’s procurement forecast, and contact its Office of Small and Disadvantaged Business Utilization to ask how small firms in your field usually get started. Then answer sources sought notices from those agencies, because each response tells a contracting officer that capable small businesses exist, which can lead to a set-aside. A narrow, patient plan beats a scattershot one, and the relationships you build with a few buyers carry into every later bid.
Take the free Federal Contracts workshop in Inksight Courses and Trainings: six narrated lessons, quizzes and a certificate, taught by Kevin Phan. It is part of a 15-workshop series on government contracting, from city hall to federal agencies.
Key takeaways
- Small businesses won 28.76% of federal prime dollars in FY2024, above the 23% goal.
- SAM.gov registration is free and must be renewed every year.
- Size standards depend on your NAICS code.
- From Oct. 1, 2025: micro-purchase $15,000, simplified acquisition $350,000.
- Subcontracting builds the past performance agencies want.
Frequently asked questions
How do I start with federal government contracts?
Register free in SAM.gov, choose NAICS codes, confirm you are small under SBA size standards, and search SAM.gov for set-aside opportunities.
Does SAM.gov registration cost money?
No. It is free. Renew it every year.
What is the micro-purchase threshold?
$15,000 since Oct. 1, 2025.
What is a small business set-aside?
A contract only small businesses may bid on, used when at least two capable small firms are expected to compete.
How long does SAM.gov registration take?
It can take from several days to a few weeks, especially for the first registration, because your entity information is validated. Start well before you want to bid.
Do I need a GSA Schedule to sell to federal agencies?
No. Many contracts are awarded through open solicitations and small business set-asides. A GSA Schedule helps once you have past performance and want agencies to order from you directly.
Sources
- U.S. Small Business Administration: Small Business Procurement Scorecard
- SAM.gov: Entity Registration and Contract Opportunities
- U.S. Small Business Administration: Size Standards
- Federal Register: FAR Inflation Adjustment of Acquisition-Related Thresholds (Aug. 27, 2025)
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