Determining if Your Company Qualifies as a Small Business Entity for Government Contracting

  • Monday, October 10, 2016 12:38 PM
    Message # 4299090
    Connie Driscoll Miller (Administrator)

    Does your company qualify as a small business? And what does the government consider “small”?

    There are some basic criteria a company must meet to be considered a U. S. small business concern. I have listed these below:

    • (a)  Is organized for profit – that is correct. NPO’s need not apply.
    • (b)  Has a place of business located in the U.S.
    • (c)   Operates primarily within the U.S. or makes a significant contribution of the U. S. economy through payment of taxes or use of American products, materials or labor.
    • (d)  Is independently owned and operated
    • (e)  Is not dominant in its field on a national basis (you can’t be the only one out there doing what you do. A reason to love your competitor).


    In order to register for government contracting opportunities, your company must adhere to the size standards in your industry established by the U. S. Small Business Administration.

    For example, a verifying company, depending on how you classify it, could be limited to $7.5 million (other services) or as much as $15 million (technical consultants). But what if you also sell equipment and you have a distribution agreement? Then you are generally considered small if you have fewer than 500 employees and you are acting in accord with the Non Manufacturer Rule.  

    A lot to think about, right?  And why do you need to worry about it if your company only has 3 employees and your gross receipts are under a million a year? Well, you don’t if you are content with not competing for government work. But if you do want to get your finger in the pie, you need to register as a small business entity.   Now, where do you start?

    There are companies out there who will gladly do this for you, for a fee. Before you decide the route you should go, do the work yourself or hire someone, go to the Small Business Administrations’ Qualifying Business Link and do some research. You can even take some courses, such as  Understanding Small Business Size Standards or use the SBA’s step by step guide to Getting started as a  Contractor.

     Might as well get some of your tax dollars back by utilizing the free tools provided before you pay out your hard earned money for someone else to process the registration for you.

    Last modified: Monday, October 10, 2016 12:44 PM | Connie Driscoll Miller (Administrator)

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