What DoD Government Contracts Can My Small Business Win?

The U.S. federal government aims to conduct 23% of prime contracts with small businesses and 30% of subcontractor contracts with small businesses. The Department of Defense (DoD) is one of the branches of government that offers the most opportunities for small to midsize businesses (SMBs).

Below you'll find an explanation of these opportunities by GovWin from Deltek, exploring the different DoD contract types for small businesses and a few tips for growing your small business sales to federal agencies.

DoD Small Business Contract Programs

The Department of Defense is one of the major branches of the United States federal government. It is dedicated to national defense services and protecting the U.S. from foreign threats. The DoD has a huge budget and employs millions of people. It offers federal contracts to businesses, contractors and other entities to complete projects that support its goals.

If you are a small business selling to the DoD or the federal government, it’s crucial to know which socioeconomic categories, if any, fit your organization. For many types of government contracts, agencies are often required to set aside part or all of a contract for companies that meet these eligibility requirements.

The U.S. Small Business Administration (SBA) offers a few programs designed to help small businesses gain a fair share of federal government contracts, along with set-aside contracts specifically earmarked for small businesses. Here are several of the most common socioeconomic categories the SBA supports, and how much they aim to award to qualified businesses.

Women-Owned Small Businesses (WOSBs)

The U.S. federal government aims to award at least 5% of federal contracting dollars to qualifying WOSBs every year.

Service-Disabled Veteran-Owned Small Businesses (SDVOSBs)

The government aims to allocate at least 3% of money from federal contract awards to qualifying Service-Disabled Veteran-Owned Small Business (SDVOSB) firms every year.

8(a) Business Development Program for Small Disadvantaged Businesses

The government aims to award at least 5% of federal contracting dollars to qualified small disadvantaged business operations every year.

HUBZone Contracts for Small Businesses

The government aims to award at least 3% of federal contracting dollars to HUBZone-certified small businesses every year.

Common Department of Defense Government Contract Types

Small businesses have many ways to provide products and services via defense government contracts, in a variety of industry categories.

These are the most common types of government contracts that your business may encounter in the federal marketplace as it seeks out new DoD contracts:

1. Fixed-price contracts
2. Cost-reimbursement contracts
3. Time and materials contracts
4. Indefinite delivery/Indefinite quantity (IDIQ) Contracts

At times, the DoD may prefer sole-source contracts, which are types of government contracts that can be issued without a formal competitive bidding process. This usually happens when there is only one business that can meet the needs of a specific contract in the designated time frame.

How to Find and Win DoD Government Contracts

There are a few first steps for your business to take on your road to finding DoD government contracts. Before you do anything else, make sure your firm has a Unique Entity Identifier (UEI). With this 12-digit code, your firm can bid on government contracts. You can request your UEI at SAM.gov.

You’ll also need to match your services to a North American Industry Classification System (NAICS) code. NAICS codes enable federal statistics agencies to categorize businesses. Your six-digit code will make it clear to any government agency what services you provide. Find your NAICS code through the U.S. Census Bureau.

Next, ensure your business meets the Small Business Administration’s size requirements. If you’re a non-manufacturing business, you should qualify if your average annual receipts for the most recent five complete fiscal years are under $7.5 million. For manufacturing businesses, as of 2024, the cutoff was an average of 500 employees or fewer for each pay period over the last 24 calendar months. Remember to include the annual receipts and number of employees of any affiliate businesses in your totals.

Other Federal Agencies for Small Businesses to Pursue

Across the major government agencies within the U.S. federal government, federal contract opportunities abound for small and midsized firms – and not just from the DoD.

The DHS (Department of Health Services) is a notable government agency with many opportunities for small businesses that meet the correct eligibility requirements. In particular, the DHS needs businesses that offer technology products and services, such as those related to border/transportation security, immigration, cybersecurity and disaster response.

In addition to the DoD and DHS, it is worth noting that small businesses and service-disabled veteran-owned small businesses (SDVOSBs) also have the opportunity to win contracts from the Department of Veterans Affairs (VA). The VA typically exceeds its SDVOSB goal by a large margin but has a tougher time with other socioeconomic categories. The VA has an established hierarchy of contracting preferences. This means the VA must consider SDVOSB and Veteran-Owned Small Businesses (VOSBs) prior to other small business preferences.

Next Steps to Winning More DoD Small Business Contracts

Ready to put these tips into action, and prepare your small business to expand its government sales revenue with the DoD? You need to consider how GovWin IQ, the leading market intelligence platform that provides up-to-the-minute government contracting information, can give you early notice of upcoming opportunities and best-fit government leads for all types of government contracts.

Whether you’re a new small business contractor or a seasoned veteran prime contractor, GovWin can help you meet your government sales business goals.