This New Year more than most promises reinvention, renewal, and renaissance. It’s been a challenging, contentious, startling nine months, but 2021 has the potential to be the year for start ups and small businesses. And for those who want to support the federal government in the world of national security, it requires a bit of knowledge of all the different codes in order to get a contract award.
Government Contracting Codes – What You Need to Know
There’s no time like now to think hard about how you will take advantage of the opportunities in store—particularly the financial ones. I’ve written previously about how veterans can start a business, get involved in government contracting, and get preference when bidding on work with the Department of Veterans Affairs. You don’t have to be a veteran, though, to start a small business and bid for government contracts, and if you go for it, there are a lot of numbers and acronyms you’re going to encounter along the way. Here are ten of them, what they mean and do, how they interact, and how to get them.
1. DUNS
All companies whose owners want to do business with the federal government must register for a Data Universal Numbering System (DUNS) identifier assigned by the company Dun & Bradstreet. A DUNS verifies the existence and location of a company and is available free of charge for all businesses and business types. Register for your DUNS here. (It is a relatively painless process, and a necessary one for contracting.)
2. TIN
You likely already have a Taxpayer Identification Number: your social security number. But there are more TINs than that, including, most notably, Employer Identification Numbers, or EINs (see next item), which all businesses should have. Paperwork sometimes refers to TIN and EIN interchangeably, and depending on your business structure and the nature of whatever it is you are doing, you’ll use either at different times. (I am thinking mainly of single member LLCs: they are considered “disregarded entities” for tax purposes, and though you might file your company’s taxes with your EIN, when you pay your quarterly estimated taxes, you would typically have to use your social security number.) In short, ask your accountant, but at least you have the vocabulary now to ask the right questions.
3. EIN
An Employer Identification Number (EIN) is a type of TIN. It is assigned by the IRS to new businesses for tax purposes. It is sort of like a social security number for your business. You can apply for an EIN online here.
4. CAGE
A Commercial and Government Entity (CAGE) code is assigned to a business by the federal government for procurement and acquisition purposes. A CAGE code is a prerequisite for receiving federal contracts or grants, and basically identifies what you are and where you are. To get a CAGE code, you need a DUNS, a TIN, your financials, and bank routing information. You can register for a CAGE code here.
5. SAM
The System for Award Management (SAM) is the online federal procurement system used for doing business with the federal government. SAM is where you register your business with the government, and search for other businesses similarly registered. To register with SAM, you need a DUNS and a TIN. It can take about two weeks to get in the system, so plan accordingly.
6. OSDBU
The Office of Small & Disadvantaged Business Utilization (OSDBU) offers a program called Vets First, designed to help businesses that are at least 51% veteran-owned to get verified for preference when applying for contracts with Veterans Affairs. (The VA sets aside about $3 billion a year for small businesses. There’s a lot of work to be found!) You can apply here. Of all the codes and acronyms listed here, this is the only one that will make you sweat. Verification is a lot of work. To help you get ready, ClearanceJobs previously covered the application process in detail, and you can find that story here.
7. SWIFT
If you do business exclusively within the United States, you won’t likely need to know your bank’s SWIFT code. SWIFT is an acronym for Society for Worldwide Interbank Financial Telecommunication and is a generally necessary element for international banking. Worth noting is that if you are a veteran, you likely do your personal banking with USAA, but they do not offer business accounts. For that, I have had a lot of success with small, local banks. (The advantages of going small are worth an entire article.) It might take a day or so for them to track down their SWIFT code, versus what you’ll find with a mega-bank like Chase, but the upside is that I’m as likely to hear back from my account manager as I am from the president of the bank.
8. NAICS
No matter what your company does, from designing websites to building fighter jets to mowing lawns, there is a NAICS code that covers it. The abbreviation is short for North American Industry Classification System and is basically an easy way for companies to list precisely the sort of work they do, and for government offices soliciting contractors to advertise precisely the sort of goods and services they need. A complete listing can be found here. When you register with SAM, you enter your NAICS information. This helps other companies and individuals find possible providers and partners.
9. PPP
This entry and the next are not acronyms that would have been on a list like this last year. Particularly PPP—the Paycheck Protection Program—which didn’t exist last year! It is a government program established to help small businesses—including single-member companies—maintain their payroll. It seems to have broad bipartisan support, and though it was established to help businesses affected by COVID-19, I fully expect it to be funded again next year, and going forward, to be part of emergency aid packages passed in the aftermaths of disasters.
10. EIDL
The Economic Injury Disaster Loan, or EIDL (pronounced like “idle”), existed before COVID-19, and will likely go on existing in a robust way long after. It is a low-interest loan offered through the Small Business Administration, generally targeted to areas hit by disaster. Because the pandemic by definition affected everyone, the entire U.S. was eligible to apply. The CARES Act also created an EIDL grant, which did not need to be repaid. While a business established today would not be likely be eligible for any COVID-related extensions passed in the next few months, both will be hopefully be around for years to come and are good to keep an eye out for when disasters strike. They could keep your new business afloat during the next horrible thing.
Study the Codes to Get the Government Contract Award
So, no matter what 2021 holds, this could be your year to either open up a full scale small business in support of the federal government. Or maybe it’s a great season to take on the consulting life as a government contractor. Whatever business model you choose in this next year, make sure you read up on the various codes that are needed – from CAGE to TIN and everything in between so you can nab that contract award.
