The First Rule of SAM.gov (Don't Use Sam.gov)

Why only 0.23% of small businesses successfully sell to the federal government—and how you can join them

By The Numbers

According to SBA FY24 data:

• 34.7 million small businesses in the U.S.

• 78,677 won federal contracts (0.23%)

• $774 billion in total federal contracts awarded

• 12-18 months: Average time to first contract win

As a former Air Force procurement officer who managed over $82 billion in defense contracts, I've seen both sides of federal contracting. After retiring in 2019, I founded GovClose to help companies navigate this complex landscape. Through working with hundreds of businesses, I've identified three critical rules that separate the 0.23% who succeed from the 99.77% who struggle.

These aren't the rules you'll find in government manuals. They're the realities that determine who actually wins contracts.

Rule #1: Don't Use SAM.gov (Yet)

Before registering on SAM.gov or searching for opportunities, validate that the government actually buys what you sell. This step is frequently skipped, yet it's fundamental.

Start with USAspending.gov. This transparency portal contains over 290 data points for every federal contract. Search using:

• Keywords relevant to your product or service

• Your NAICS code

• Your product service code

If the government doesn't purchase what you offer, you've just saved months of wasted effort. If they do, you'll understand the market size and buying patterns before investing in the process.

The Foundation Question: Are You Ready?

Federal contracting (B2G) has the longest sales cycle of any market—typically 12-18 months for first-time contractors. Unlike B2C or B2B sales, there are multiple stakeholders, regulatory requirements, and lengthy evaluation processes.

If you have an established business with proven revenue, a track record, and a quality product or service the government needs, now is the time to build your government pipeline.

If you're starting from scratch, build your B2B or B2C foundation first. Establish revenue, prove your model, develop past performance. After demonstrating success in the commercial market, expanding into government contracting becomes strategically viable.

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Notable exceptions: The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are specifically designed for R&D startups with genuine innovation. Additionally, established product resellers—companies like Carahsoft that distribute technology products—operate successfully under the non-manufacturer rule. However, resellers bring existing supplier relationships, established pricing, and proven distribution capabilities. They're not starting from zero.

Understanding Business Models in Federal Contracting

Some professionals promote a "middleman" or "broker" approach—winning prime contracts without having the in-house capability to perform the work, then subcontracting the majority to others. While this model may seem attractive, it faces significant practical and regulatory challenges.

Federal Acquisition Regulation (FAR) 52.219-14 requires small business prime contractors to perform minimum percentages of work themselves: at least 50% for services contracts, 15% for general construction, and 25% for special trade construction. More critically, winning contracts without relevant past performance and demonstrated in-house capabilities is exceptionally difficult. The government requires proof you can deliver—not just project management expertise.

Strategic subcontracting, by contrast, works effectively when the prime contractor brings core capabilities and uses subcontractors for complementary specialties. This is standard practice and often necessary for complex requirements. The key distinction is demonstrable capability in the primary work being performed.

Rule #2: Know Who Buys What You Sell—And How

Before searching SAM.gov for solicitations, understand the buying landscape. USAspending.gov reveals:

• Which agencies purchase your product or service

• Specific subagencies and offices

• Key decision-makers and program offices

• Procurement methods (GSA Schedules, IDIQs, GWACs, etc.)

This research may reveal that certain agencies require pre-qualification through specific contract vehicles that take months or years to obtain. Understanding these barriers early allows you to plan strategically rather than discover them after investing significant resources.

The procurement method matters as much as the buyer. Some agencies primarily use GSA Schedules, others prefer Government-Wide Acquisition Contracts (GWACs), and some issue standalone contracts. Each path has different requirements, timelines, and competitive dynamics.

Rule #3: Always Start with Sources Sought

When you finally access SAM.gov, you're not searching for Requests for Proposals (RFPs) or Requests for Quote (RFQs). You're looking for Sources Sought notices and Requests for Information (RFIs).

The Market Research Phase: Where Contracts Are Won

Federal Acquisition Regulation (FAR) Part 10 requires agencies to conduct market research before issuing solicitations. This pre-solicitation phase is where contracts are actually won or lost.

When agencies post Sources Sought or RFIs, they're signaling:

• They have (or expect) funding for a requirement

• They need to understand available solutions

• They're open to industry input on requirements

• They want to identify capable contractors

During this phase, you can:

• Recommend set-asides for small businesses (veteran-owned, 8(a), woman-owned, HUBZone)

• Suggest specifications aligned with your capabilities

• Propose relevant certifications or qualifications

• Influence requirements in the eventual solicitation

• Build relationships with program offices

• Demonstrate your capabilities and past performance

Effective contractors secure meetings during this phase, provide briefings, demonstrate solutions, and establish trust. For complex requirements, agencies need to verify that contractors understand security requirements, possess relevant experience, and can deliver successfully.

Why "Cold" Proposals Rarely Win

Government program managers have a mission-critical responsibility: solve agency problems without risking failure.

The companies that consistently won were those who:

• Responded to Sources Sought notices

• Engaged during the market research phase

• Attended industry days and meetings

• Demonstrated their technology or approach

• Provided relevant past performance examples

• Built relationships over months, not days

When the solicitation was published, we knew these companies. They had influenced requirements (within legal boundaries) by educating us on what was possible, what specifications made sense, and how solutions could be implemented.

The "Rigged System" Misconception

Companies often contact me frustrated that they found perfect opportunities on SAM.gov, wrote strong proposals, and lost—repeatedly. Meanwhile, they see the same competitors winning consistently. They conclude the system is rigged.

The system isn't rigged. They started at the end instead of the beginning.

Their competitors invested 6-8 months before the solicitation was published:

• Responding to multiple Sources Sought notices

• Scheduling meetings (sometimes traveling for in-person discussions)

• Providing demonstrations

• Assisting with security requirements or technical specifications

• Conducting site visits for construction projects

• Building relationships with program staff

By the time the RFP was released, the government knew exactly who could perform the work. The solicitation reflected requirements shaped (legally) through market research discussions.

Why Market Research Exists

Government program offices aren't experts in every domain. When I managed cybersecurity acquisitions, I wasn't a cybersecurity expert—I was an acquisition professional. The market research phase exists so agencies can:

• Understand what solutions are available

• Learn from industry experts

• Assess technical feasibility

• Evaluate potential approaches

• Determine realistic requirements

• Identify capable contractors

For construction projects, agencies must have contractors visit sites and review requirements before awarding contracts. For technology, they need to see demonstrations and understand capabilities. Awarding contracts without this due diligence would be irresponsible.

The Path Forward

Federal contracting is a long-term strategy, not a quick win. The process is deliberate, regulated, and relationship-driven. However, for businesses with proven capabilities and the patience to build properly, it provides stable, recurring revenue at scale.

Key Takeaways:

1. Validate demand first using USAspending.gov before investing in registration and pursuit

2. Understand the buying landscape—who buys, how they buy, and what vehicles they use

3. Engage early through Sources Sought and market research, not cold proposals

4. Build relationships with program offices months before solicitations are published

5. Bring real capabilities—the government needs solutions, not brokers

If you're an established business with a track record and the government buys what you sell, federal contracting can become a significant revenue stream. The 12-18 month investment in understanding the process, building relationships, and positioning strategically pays dividends through multi-year contracts with stable funding.

The opportunity is substantial. The $774 billion federal market isn't accessible through shortcuts or social media "hacks." It's accessible through understanding the system, engaging at the right time, and demonstrating genuine capability.

Rick Howard is the founder of GovClose, a training and consulting firm specializing in federal contracting. As a former Air Force acquisition officer, he managed over $82 billion in defense contracts before retiring in 2019 to help companies navigate government sales.