US federal contracting
US federal contracting for beginners
Published 5 February 2026 by eSourcingData
The US federal government is the largest single buyer of goods and services in the world, and most of what it buys is posted publicly. This guide explains how federal buying works, where opportunities appear, and the practical first steps any new supplier needs to take before bidding.
How the federal government buys
Federal agencies buy under a common rulebook called the Federal Acquisition Regulation, or FAR. The FAR standardises how requirements are advertised, how offers are evaluated, and how contracts are awarded, so a supplier who learns the process for one agency can apply the same knowledge across the whole of government.
Purchases range from simple commercial products bought off a catalogue to multi-year professional services and complex systems. The dollar value of a requirement largely determines the process: micro-purchases and simplified acquisitions are fast and light-touch, while larger awards follow formal competition with published solicitations and detailed evaluation.
Understanding which lane a requirement falls into helps you judge whether it is worth pursuing. A small commercial order may be won on price and availability, whereas a large services contract will weigh past performance, technical approach, and management as heavily as cost.
Where opportunities are published
Most federal opportunities above the simplified acquisition threshold are posted on SAM.gov, the government's central system for contract notices. Agencies publish requests for proposals, quotes, and information there, along with award notices you can study to learn who is winning work.
Below the formal threshold, a lot of buying happens through pre-negotiated vehicles such as GSA Schedules, where agencies order directly from approved suppliers. Learning to read both channels, the open market and the vehicles, gives you a fuller picture of where demand actually sits in your sector.
The core terms you will meet
You will quickly encounter RFP, RFQ, and RFI. A request for proposal seeks a full technical and price offer for a defined requirement, a request for quotation asks for pricing on commercial items, and a request for information is market research that does not lead directly to an award.
Other essentials include NAICS codes, which classify the type of work, and set-asides, which reserve certain contracts for small businesses and specific socio-economic categories. Getting comfortable with this vocabulary early makes solicitations far easier to read and respond to.
Your first practical steps
Before you can be paid by the federal government you must register in SAM.gov and obtain a Unique Entity ID, or UEI. Registration is free and establishes your business as an eligible entity, capturing your details, banking information, and the codes that describe what you sell.
Alongside registration, prepare a capability statement: a concise one-page summary of what you do, your differentiators, relevant codes, and past performance. It is the calling card contracting officers and prime contractors expect to see when you introduce your business.
Building a realistic pipeline
New entrants rarely win a large prime contract first time out. A common route is to start with small simplified purchases, subcontract to established primes, or pursue set-aside opportunities matched to your business size and category, building past performance that strengthens later bids.
Treat the first year as learning the market as much as chasing awards. Track the agencies that buy what you sell, study their recent awards, and build relationships with small business specialists at those agencies, who exist specifically to help suppliers navigate the process.