Unlocking Growth for Small Government Contractors: Strategies for Success

Did you know small businesses received over $183 billion in federal contracts in 2024, accounting for 28.8% of all federal contracting dollars? This record-breaking figure underscores the critical role that small businesses play in the government contracting (GovCon) landscape.

Yet, despite these opportunities, small businesses face unique challenges that can hinder their success. Limited resources, compliance hurdles and stiff competition often stand in the way of achieving their goals. However, with the right tools and strategies, small business government contractors can compete, grow and thrive.

As someone who has worked in this industry for more than twenty years, I have seen firsthand how Deltek's innovative solutions can empower small businesses to overcome these challenges and achieve their growth objectives.

Embracing Innovative Technology to Gain a Competitive Edge

One of the biggest hurdles for small businesses in GovCon is resource limitations—whether it’s staffing, technology, or funding. Without the right systems in place, even the most promising businesses can struggle to compete and scale effectively.

To gain a competitive edge, small businesses must embrace innovative technology like Deltek Costpoint, a project-based enterprise resource planning (ERP) system that:

• Automates tedious tasks: Streamlines routine actions like timekeeping, expense reporting, and project management, freeing up time for strategic growth.
• Enhances productivity with artificial intelligence (AI): Generates content, informs decisions, and prescribes and automates actions, saving time and valuable resources.
• Ensures compliance: Reduces the regulatory burdens and ensures audit readiness for government contractors.

Deltek Costpoint addresses these challenges by equipping small businesses with the tools they need to compete and grow, driven by our commitment to purposeful innovation. Deltek Dela™, our Ai-powered business companion, exemplifies this dedication by leveraging GenAI, machine learning and NLP, along with OCR, to quickly access information within Costpoint and streamline processes. By integrating these advanced technologies, our solutions meet our users current needs and anticipate future demands, enabling them to be more efficient and productive.

Partnering with a Trusted Industry Leader

Contrary to popular belief, Deltek does not support only large contractors. In fact, most of our customers are actually small and mid-sized businesses. Deltek's long-standing history and deep expertise in the government contracting industry make us a trusted partner for businesses of all sizes. For over 40 years, we've supported government contractors through every stage of their journey.

Small Business Expertise

Small businesses, in particular, benefit from partners who understand their unique challenges, ensuring they can compete effectively and grow within the GovCon industry. Deltek Costpoint is a proven solution designed to do just that, with built-in security and compliance features that have supported tens of thousands of audits over the years.

For businesses just starting out, we also offer Costpoint for Small Business, a purpose-built solution that delivers integrated financial management beyond standard accounting software. This preconfigured version of Deltek Costpoint enables small government contractors:

• Faster Setup: Get up and running quickly without the complexity of larger ERP systems.
• Scalability: As you win contracts and expand, Costpoint grows with you.
• Audit Readiness: Compliance is built in, so you're always prepared.

Integrated GovCon Solutions

Winning government contracts is just the beginning. One of Deltek Costpoint's key differentiators is its ability to support the entire project lifecycle on a single platform. From AI-enabled opportunity identification with GovWin IQ to project delivery and closeout, Deltek offers an integrated, end-to-end solution.

Additionally, Costpoint meets you where you work, allowing users to enter time within Outlook and Microsoft Teams which is something no other project-based ERP offers. This is especially important for small businesses that need to maximize their limited resources.

Recently, we enhanced our offerings for government contractors with the introduction of Costpoint Resource Planning. This addition provides best-in-class resource planning and management capabilities, helping small businesses allocate resources efficiently to prevent budget overruns. Combined with Deltek Talent Management, businesses can streamline the recruiting, hiring and onboarding processes to put new hires on billable projects faster and improve cash flow—a vital aspect for growing government contractors.

Growth Potential

But it's not just about getting a business up and running; it's about envisioning its future. Many small businesses aim not only to grow but also to position themselves for acquisition. When considering solutions and technology partners, it's crucial to choose providers with a proven track record in the government contracting industry.

In some cases, firms using a well-known ERP system can receive a higher valuation from potential acquirers because it's easier to integrate and is a trusted entity. So, as one of the most recognized ERP solutions in the industry, Deltek Costpoint supports government contractors at every stage of their business journey, regardless of their goals.

Navigating the Evolving Government Contracting Landscape

Regulatory Requirements

In this highly regulated industry, staying compliant is critical , especially contractors just starting out. Unlike other ERP solutions, Deltek Costpoint is designed to help meet stringent regulatory requirements, including Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) requirements, right out-of-the-box.

Deltek’s Costpoint GovCon Cloud Moderate (GCCM) is listed on the FedRAMP Marketplace and supports DFARS 252-204-7012 requirements as well as CMMC level 2 & 3 certification requirements as a cloud service provider. With CMMC expected to impact defense contract awards very soon, defense contractors will need their SaaS ERP solutions to comply with strict requirements for storing and handling Controlled Unclassified Information (CUI). This robust security framework not only helps small businesses mitigate risks and avoid potential penalties associated with non-compliance but also ensures that national security information remains protected and our military superiority is maintained against foreign adversaries.

For anyone in doubt that CMMC will be unaffected by the change in administration, it is important to remember that the CMMC program was approved and started in the first Trump Administration and supported by a vast majority in Congress. CMMC is meant to rid the defense contracting industry of fraud from false claims and loss of U.S. Intellectual Property from non-secure contractors and subcontractors. 

Impacts of DOGE

In addition to the emphasis on cybersecurity, the new administration has also introduced the Department of Government Efficiency (DOGE), an initiative aimed to reduce waste, modernize processes and decrease regulatory burdens within the industry. Change like this often brings both challenges and opportunities, and DOGE is no exception. Small businesses can expect shifting budget priorities, increased oversight and changing processes.

However, the DOGE initiative may also open the door to more possibilities, potentially leading to increased outsourcing of work to small and mid-size firms. This presents a significant opportunity for small businesses to expand their footprint in the federal market. With DOGE’s emphasis on cost transparency and efficiencies, following Cost Accounting Standards (CAS) compliant accounting practices is more important than ever. It’s not too soon to start evaluating if your accounting system can meet CAS requirements to put you in the best position.

Looking to the future, these issues present both challenges and opportunities for small businesses. I encourage you to explore how Deltek's solutions can benefit your business and help you achieve your goals. Together, we can navigate the complexities of government contracting and drive success for your small business.