Small businesses must consider the novelties in Government Contracting and see if they affect their competition for prime contracts. Changes in the NADD and new industries added in the NAICS code 2017 can be very advantageous for SB contractors.
The Federal Government spends more than 450 billion dollars in acquiring services and supplies from contractors, each year. Considering this fact, in 2018, the federal contracting space will be enormous for all types of business to pursue profitable opportunities. The truth is that Federal Market is one of the best sources for small businesses to increase their profits and grow into well-established companies.
According to a research conducted five years ago, in 2013, by American Express OPEN for Government Contracts Program, the success of small businesses has grown almost 50% after becoming government contractors.
However, given the recent changes and new trends this year in the Federal Market, SMs should consider these things in order to prepare for effective participation in government procurements.
National Defense Authorization Act Changes
The purpose of the update in the NDAA Act is to stimulate the Federal Government to create greater contracting opportunities. Obviously, this change will greatly affect contractors due to contracts diversifying.
Changes made imply that federal agencies must set-up small business government subcontracting goals so that small businesses are encouraged to participate more widely in government procurements and gain more business opportunities.
Moreover, the change enables a better chance to meet the actual annual goal of awarding 23 % of all federal contracts to businesses under the SBA set-aside program and complement the small business goals of every federal agency. Apparently, the act update is very advantageous for small contractors, but in the meantime provides great opportunities for medium/large contractor enterprises to collaborate with small companies on joint projects. This will allow them to win prime contracts that might otherwise not be eligible for.
Changes that the approval of this act will bring to the Government procurements are numerous, and among them is the improvement of tools to enhance the accuracy of the reporting of contracts and increased transparency to encourage greater participation in the federal market.
Ensure your business is under the appropriate NAICS code
Many businesses may underestimate the advantages they can have from the changes to the NAICS codes. Check out the eligibility criteria and see if your business can benefit from a shift in a new code that brings broader contracting opportunities for your business.
With the SBA updating small business standards adopting the U.S. Office of Management and Budget’s (OMB) North American Industry Classification System (NAICS) revision for 2017, there was created 21 new industries by reclassifying, combining, or splitting 29 existing industries under changes made to NAICS in 2012 (NAICS 2012).
These industries were created by redefining, combining or dividing the predefined industries of 2012. Nevertheless, the change made can result in more contracting opportunities since you may qualify for new types of contracts. You can easily discover if your business will be impacted by these changes, so you’d better make sure if they apply to you.
The Federal Government is the largest consumer in the world. It relies on its contractors to meet its enormous demands. If your business matches services or products that are highly required by Federal agencies, sub-agencies, state or local government agencies, you better be updated with the changes and start preparing for your participation for government procurements.