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March 7, 2025 · The Bloomfield Team

How Small Manufacturers Can Win Government Contracts

The U.S. federal government spent $178 billion on manufacturing-related procurement in fiscal year 2024. Small businesses captured roughly 26% of prime contract dollars, according to the SBA. That percentage has been mandated by federal law since 1997, and enforcement has tightened in recent years. The pipeline is there. Most small manufacturers never tap it because the process looks more complex than it actually is.

Government contracting rewards exactly the capabilities most job shops already possess: precision work, quality documentation, and the ability to produce low-to-medium volumes of specialized parts. The barrier is paperwork and process knowledge, and both are learnable.

Get Registered Before You Need To

The registration process takes 30 to 60 days when everything goes smoothly. Start with SAM.gov, the System for Award Management. Every entity doing business with the federal government needs an active SAM registration. You will need your DUNS number (now UEI, Unique Entity Identifier), your NAICS codes, your banking information, and a responsible party designation.

NAICS codes matter because contracting officers use them to search for eligible vendors. A machine shop doing precision CNC work should register under 332710 (Machine Shops) and any secondary codes that apply, such as 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing) if you serve aerospace or 332912 (Fluid Power Valve and Hose Fitting Manufacturing) if you make hydraulic components.

After SAM, register on the specific procurement portals relevant to your work. The Defense Logistics Agency has its own vendor database. NASA maintains a vendor list. The Department of Energy does the same. Each registration is free and takes an afternoon.

Understand the Set-Aside Programs

Federal set-aside programs exist specifically to route contracts to small businesses. The main categories include Small Business set-asides, 8(a) Business Development for socially and economically disadvantaged firms, HUBZone preferences for shops in historically underutilized areas, and Service-Disabled Veteran-Owned Small Business (SDVOSB) set-asides.

If your shop qualifies for any of these categories, the competitive field narrows substantially. A HUBZone set-aside on a $2 million machining contract might draw 8 to 12 bidders instead of 60. The math on win probability changes accordingly.

Check your eligibility at SBA.gov. Many manufacturers qualify for programs they have never considered because nobody on staff has looked into it.

Start with Subcontracting

The fastest path into government work runs through established prime contractors. Every large defense prime, from Lockheed Martin to General Dynamics to Raytheon, maintains supplier development programs specifically to identify and qualify small manufacturing subcontractors. They are required by law to subcontract a percentage of their awards to small businesses.

Subcontracting lets you learn the documentation requirements, the quality standards, and the inspection protocols without carrying the administrative burden of a prime contract. You build a performance record that becomes your credential for bidding directly later.

Attend the SBA's annual matchmaking events. These are structured meetings between prime contractors and small businesses, and they produce real supplier relationships. The 2024 National Small Business Week event in Minneapolis generated over 3,000 one-on-one matchmaking sessions.

Quality Systems Are the Entry Ticket

ISO 9001 is the minimum credible quality standard for government manufacturing work. For defense work, AS9100 is the relevant standard. For work touching ITAR-controlled articles, your shop needs ITAR registration through the Directorate of Defense Trade Controls.

These certifications cost money and take time. ISO 9001 implementation typically runs $15,000 to $30,000 for a 25-person shop and takes 6 to 12 months. AS9100 adds another layer of documentation and process control. But every one of these certifications opens doors that remain closed without them, and they improve your commercial work at the same time.

For a deeper look at how quality systems function in small manufacturing operations, see our guide on quality systems for small manufacturers.

The Quoting Process for Government Work

Government RFQs follow a structured format. They arrive through SAM.gov, agency-specific portals, or directly from prime contractors. Each solicitation includes a Statement of Work (SOW), technical specifications, quality requirements, delivery schedules, and evaluation criteria.

The evaluation criteria tell you exactly how the contract will be awarded. Some are lowest price technically acceptable (LPTA), where the cheapest compliant bid wins. Others use best value, where technical approach, past performance, and price all factor in. Read the evaluation criteria before you spend a minute on the quote. If the contract is LPTA and your cost structure cannot compete with overseas pricing, move on.

Quote accuracy matters more in government work than in commercial work because cost overruns on fixed-price contracts come directly out of your margin. Use rigorous historical data in your quoting process and add appropriate contingencies for the documentation and inspection requirements that government work carries.

Documentation Is the Deliverable

In government manufacturing, the paperwork ships with the parts. First Article Inspection Reports (FAIR), material certifications, process certifications, dimensional inspection reports, nondestructive testing results. The documentation package on a 50-piece order of machined brackets can take as long to prepare as the machining itself.

Shops that treat documentation as an afterthought consistently underestimate government jobs. Build the documentation time into your quote. Assign it to a specific person. Create templates for the reports you will produce repeatedly. The shops that streamline their documentation process can handle the administrative overhead without killing their margins.

Build the Relationship Before You Need the Contract

Government contracting officers at facilities like Tinker Air Force Base, Anniston Army Depot, and the various DLA distribution centers hold industry days specifically to meet potential suppliers. Showing up, introducing your capabilities, and understanding what they need over the next 12 to 24 months gives you visibility before the RFQ drops.

When the solicitation appears on SAM.gov, the shop that already had a conversation with the contracting officer has an informational advantage over the shop reading the SOW cold.

Government contracting is a long game. The first contract might take 12 to 18 months from registration to award. But government customers are among the most loyal in manufacturing. Once you perform well on a contract, reorders and follow-on work flow with a consistency that commercial customers rarely match.