Who Can Sell to the Federal Government? (Probably You)

Almost any legally formed U.S. business can get government contracts, including sole proprietors, home-based businesses and brand-new companies. The basic requirements are a business entity, a taxpayer ID, a bank account for electronic payments and an active SAM.gov registration. Certifications and government experience help, but you don't need either to start.

Who can get government contracts?

Can anyone get a government contract? Nearly any legally formed business can. Any "entity" can register on SAM.gov: sole proprietors, corporations, partnerships, nonprofits, even other governments. An individual takes part as a sole proprietor. Once you're registered and meet the rules for a specific contract, you can bid on it.

The bar is lower than most people expect, for three reasons:

1. The government buys ordinary things. Cleaning, mowing, meals, repairs, IT support and replacement parts show up every day.
2. A big share is reserved for small businesses. In fiscal year 2025 (FY2025), small businesses won about $179 billion in federal prime contracts, nearly 28% of the contract dollars SBA counts toward its small business goal. SBA's scorecard and USAspending.gov count small-business dollars differently, so their FY2025 totals differ ($179 billion versus $176.2 billion). This report explains why.
3. Experience isn't a gate. A contracting officer can't find your business unqualified solely because it has no relevant track record.

One catch for nonprofits: they can register and win contracts, but the Small Business Administration (SBA) defines a small business as one organized for profit. So small business set-asides aren't open to them.

Contracts and grants aren't the same thing. A contract pays you to deliver something the government buys; a grant funds a project for a public purpose. You find and apply for federal grants on Grants.gov, where each notice sets its own eligibility. This guide covers contracts.

The basic requirements

Here's what every business needs before it can bid as a prime contractor:

Plan on 10 to 15 business days after you submit your registration, and often longer. It's free, and you renew it every 365 days. Our guide on how to register on SAM.gov walks through each step.

There are a few narrow exceptions to the registration rule. The one most likely to affect you: a federal buyer can pay you with a government purchase card for a micro-purchase (generally $15,000 or less, but $2,500 for services covered by the Service Contract Act, such as cleaning, and $2,000 for construction) without you being registered. For anything posted on SAM.gov, plan on being registered.

Do I need an LLC for government contracts?

No. Any legal entity can register, including a sole proprietorship, and SBA's size rules cover every common business form. Whether an LLC or corporation makes sense for liability or taxes is a question for your accountant, or for a free Small Business Development Center (SBDC) advisor.

Do I need an EIN for SAM.gov?

Not if you're a sole proprietor. SAM.gov accepts either an EIN or a Social Security number as your taxpayer ID. Either way, the name and number must match your IRS records exactly. If you just got an EIN or changed your business name with the IRS, wait at least five weeks after the IRS letter before you register. The IRS needs that long to process it, and SAM.gov checks your ID against IRS records.

Can sole proprietors, home-based and new businesses get contracts?

Can a sole proprietor get government contracts?

Yes. Sole proprietors can register and bid like any other business, and SBA's size rules cover them too. For a sole proprietorship, SBA measures receipts using the "gross income" plus cost of goods sold from your tax return.

Can a home-based business get government contracts?

Yes. SAM.gov needs a physical address that matches your business documents. For a home-based business, that's usually your home address. It can't be a P.O. box or a mailbox at a shipping or mail-service store. If you'd rather not have your home address public, you can opt out of public display in SAM.gov search. Federal users can still see your record, SAM.gov's checklist says some non-sensitive details stay in its downloadable public data file, and any contract you win is public.

Can a new business get government contracts with no experience?

Yes. Federal rules say a business can't be found unqualified solely because it lacks relevant performance history. In competitive evaluations, an offeror with no relevant past performance may not be rated favorably or unfavorably on it. Evaluators can also consider the experience of your key people and major subcontractors, and commercial work can count too, depending on what the solicitation asks for.

Still, a neutral rating isn't as strong as a great record, so many businesses start small. Micro-purchases (generally up to $15,000; lower for most service and construction work) and simplified acquisitions (up to $350,000) use simpler buying procedures. Others start as a subcontractor to a larger prime contractor. And if a contracting officer decides your small business can't do the work, SBA can review that decision. If SBA disagrees, it issues a Certificate of Competency, which requires the agency to award you that contract.

For size, being new doesn't hurt either. SBA normally averages receipts over five years, but if you've been in business less than five complete fiscal years, it divides your total receipts by the weeks you've operated and multiplies by 52.

A few programs want a track record: 8(a) looks for "potential for success," which since September 2026 generally means two years of tax returns showing revenue and two years of contract work in your primary NAICS code, and a GSA Schedule contract generally requires two years of relevant corporate experience. Neither is required to sell to the government. For more beliefs that keep new businesses out, see government contracting myths.

What does the government buy? (It's not just defense)

On September 25, 2026, FedReady's search of SAM.gov data showed about 11,100 open federal opportunities, counting every notice whose response deadline hadn't passed. Counts taken in the last weeks of September run high, because agencies post a lot before the fiscal year ends, and they fall in October. The live search counts only notices open to bids, leaving out ones limited to a sole source or approved sources, so check it for today's number. Here's a sample by industry from that day:

The buyers aren't only military. Open that day: grounds maintenance at a Department of Veterans Affairs national cemetery, janitorial services for Federal Aviation Administration facilities, and housekeeping at a Department of Energy lab. Even defense buying is often ordinary: snow removal at Army Corps of Engineers lake projects, and Defense Logistics Agency orders for screws, nuts and valves. See six industries up close in our government contract examples for small businesses.

Does your business count as "small"?

SBA sets a size standard for each industry, tied to its NAICS code. Each standard is a cap on either average annual receipts or average number of employees.

• Receipts generally mean "total income" plus "cost of goods sold" from your tax returns, averaged over your last five completed fiscal years (if you've been in business less than five, your total receipts divided by the weeks in business, times 52; see 13 CFR 121.104(c)(2)).
• Employees are averaged over the latest 24 months.

Here are a few receipts-based standards from SBA's current table (effective March 17, 2023), which stays in force until SBA publishes a final rule:

Some codes have exceptions for particular kinds of work. Engineering services (541330) are $47.0 million for military and aerospace equipment and weapons, for engineering services under the Energy Policy Act of 1992, and for marine engineering and naval architecture. Find the exact work you do in the table before you assume a number.

Two rules matter more than the numbers:

1. Size is judged contract by contract. It's measured against the NAICS code the contracting officer assigns to that solicitation, as of the date you submit your first offer with a price. You can be small for one contract and not for another.
2. Affiliates count. If another business controls or has the power to control yours (or you, it), or a third party controls or can control both, SBA adds your sizes together.

Check your own codes with SBA's free Size Standards Tool. Our guide on how to choose NAICS codes explains how to pick codes and check the standard for each one.

Who can't get government contracts?

The list is short:

• Excluded businesses. Firms that are debarred, suspended, proposed for debarment or voluntarily excluded can't receive contracts. Exclusions are listed in SAM.gov, and contracting officers check them before award.
• Federal employees and the businesses they own. A contracting officer must not knowingly award a contract to a government employee, or to a business owned or substantially owned or controlled by government employees, with limited exceptions. If you work for the federal government, talk to your agency's ethics office before you start.
• Businesses without an active registration. If your SAM.gov registration lapses, no awards or payments can be processed until you renew.

Do government contractors need to be U.S. citizens?

Not as a general rule, but citizenship and location matter in three places:

• Registration. Foreign companies can register on SAM.gov after getting a NATO Commercial and Government Entity (NCAGE) code. One with no income effectively connected with the U.S. and no U.S. office doesn't need a U.S. taxpayer ID.
• Small business status. To count as small, a business needs a place of business in the United States, and it must operate primarily in the U.S. or contribute significantly to the U.S. economy. SBA's general definition says nothing about the owner's citizenship.
• SBA programs. The 8(a), HUBZone and women-owned small business programs require majority ownership and control by U.S. citizens (8(a) and HUBZone also allow certain entity owners, such as tribes and Alaska Native Corporations).

Certifications are optional extras

You don't need any certification to win a total small business set-aside. You must meet the size standard for that contract's NAICS code and represent it in SAM.gov; no certificate is needed.

Certifications open additional set-asides. SBA certifies the 8(a), HUBZone, women-owned (WOSB and EDWOSB) and veteran-owned (VOSB and SDVOSB) programs for free through MySBA Certifications.

The plain small business set-aside is also the biggest category by far. On September 25, 2026, FedReady's search showed 2,678 open total small business set-asides. By comparison, there were 341 for service-disabled veteran-owned businesses, 292 for women-owned businesses, 63 for 8(a) and 46 for HUBZone. Those counts are from five days before the fiscal year ended on September 30, and they fall quickly in early October. Our guide to set-aside contracts covers each program and has links to the live counts.

A quick eligibility checklist

• My business is a legal entity (a sole proprietorship counts).
• I have an EIN, or an SSN as a sole proprietor, and my business name matches IRS records exactly.
• I have a physical street address, not a P.O. box.
• I have a bank account that can receive electronic payments.
• I know my NAICS codes and have checked my size against each one.
• My business isn't excluded, and it isn't owned or controlled by a federal employee.
• I'm ready to register on SAM.gov (it's free) and renew every 365 days.

If you checked every box, you can get government contracts. If one item gives you pause, an APEX Accelerator can review it with you for free.

Next steps

Start by choosing your NAICS codes, since they decide whether you count as small. Then register on SAM.gov, and read set-aside contracts explained to see which reserved contracts you can go after.

This guide is general information, not legal or financial advice. Rules and thresholds change, so confirm details on SAM.gov and the official agency sites linked above before you act. AI tools help us research and draft these guides, so check the sources before you rely on a detail. FedReady is an independent company and is not affiliated with any government agency.