GUAM – Local businesses on Guam have a remarkable opportunity to take part in the military buildup through federal contracting. However, for some small businesses, the federal bureaucracy may seem arduous. So it’s important to think about whether yours is the kind of business that is well suited to meet the needs of this demanding client. In this installment of Federal Contracting 101, helps small businesses assess whether federal contracting is the right fit.

Volume 12: Is Federal Contracting Right For You?

When discussing federal contracts, one may think only of big businesses. In reality, the government awards more contracts to businesses designated as small business than it does to those labeled big business. Small businesses often find that with a little information, the process of becoming a qualified federal contractor is not as unachievable as first thought.

Although many small businesses may find stability in federal contracting, some small businesses may find that it is not right for them. There are several questions that small business must ask in order to determine whether federal contracting is a good fit.

Does my business offer a product or service that the government needs during the buildup?

This is the first and most important question. To compete, a business must first offer a product or service that the government needs. In addition, certain set asides such as the women-owned business set aside and the service-disabled veteran-owned set aside have specific NAICS codes that apply. If those codes do not apply to your businesses, you cannot bid on that specific set aside.

A small business can determine its appropriate NAICS code at the NAICS website. This NAICS code should then be crosschecked against qualifying NAICS codes for set asides. For example, women-owned businesses can find a list of qualifying NAICS codes for women-owned set asides at

Am I detail-oriented and patient?

Although federal contracting can be a mutually beneficial relationship, particularly during the buildup, the federal government is still a bureaucracy that requires patience and attention to detail. Participating in the federal contracting process requires knowledge of the FAR, which is 2,000 pages long, and requires detailed specifics on how you can meet the government’s needs.

The federal contracting process is clear and specific, but the detailed nature of the process requires an equally detailed person to follow it. Once the FAR is read and understood, subsequent contracts are less time consuming to digest due to “boilerplate” sections that have striking similarities across the board. Small businesses willing to invest time upfront to read the FAR and understand it will have a much easier time in the federal marketplace.

In addition to the rules, there is paperwork, invoicing, and other requirements that must be documented or maintained. Although the procedures and expectations are clearly defined, a detail-oriented business will have an easier time following the process.

Do I want to grow my business?

Certain programs such as the 8(a) program are temporary yet require that small businesses keep a certain percentage of commercial business throughout the program. This often means that a small business cannot trade their current commercial market load for federal business—it must be in addition to its existing commercial business. This means that to incorporate federal business, a business will likely need to add resources such as staffing or space.

Have I been in business for more than two years?

Most set-aside programs require businesses to have an established business, and a two-year history is the standard requirement. The federal government looks more favorably on well-established businesses than it does on new businesses, as there is lower risk involved.

If you have answered yes to most of the questions above, federal contracting may offer your business the growth and stability you are looking for. Small businesses with an eye for detail and a good track record for meeting the needs of customers will likely enjoy the stability and profitability of federal contracting during the buildup on Guam. will continue to provide information on the federal contracting process in our series Federal Contracting 101.