If you’re on this site in the first place, you’re probably interested in working with the federal government. We’ve all heard about the juicy contracts that you can get once you register with the System for Award Management (SAM). If you’re a small business owner you probably know about Set Aside funds for small business contracts.
That’s all old news. But what if I told you there was a way for you to work with the federal government without all the drawn-out process of going through SAM registration and a complicated bidding process?
That’s right. You don’t have to spend hours working on your registration or combing through the Fed Biz Opps database. Because with federal micro-purchases, your small business can work with the government with a simple credit card transaction.
What’s the Catch with P Card and micro-purchases?
Sounds too good to be true, right? Well, it’s not. In the average year, the federal government spends somewhere between 15 and 20 billion dollars on micro-purchases. Give me just a minute and I’ll explain how it works.
The micro-purchase system was developed by the federal government as a way to ensure that the government has discretionary funds on hand for senior officials to divert in case of emergencies. These expenditures happen when the government needs work done, but (because it’s such a small project) it’s not worth issuing a procurement to have contractors compete for it.
That means micro-purchases are small projects your small business should be well able to take care of. The micro-purchase threshold for any micro-purchase is $3,500. (It used to be $3,000 but was raised on October 1st, 2015.) There are a few exceptions that kick in in the case of nuclear, biological, chemical, or radiological attack, but as a rule, you can count on a maximum of $3,500.
Micro-purchases are done at the discretion of senior officials who hold a Government Purchase Card (GPC), more often referred to as a P-card. P-card holders are found in most federal agencies, including the Department of Defense, Veterans Administration, Department of Justice, Department of the Interior, Health and Human Services, Department of Agriculture, Department of Homeland Security, the Postal Service, Department of Transportation, and the Department of Commerce. (State and local governments also issue similar cards to their officials.)
P-card purchases are done with minimal paperwork, and there’s no registration necessary to qualify.
How Does MICRO-PURCHASES Work?
Government expenditures always start with a decision to procure. If the government needs work done, somebody makes the decision to procure. In some cases, that leads to the government issuing a procurement—the kind you see on the Fed Biz Opps site. That’s because when the expected expenditure reaches the $3,500 dollar mark, government agencies are required to put those procurements out into the open market and allow competition between contractors.
If the scope of the project falls below that threshold, however, the agency opts for a micro purchase. A micro-purchase is usually undertaken by an organization the agency has worked with before, or by a local business that accepts payment with the P-cards.
Note: it’s important that your business is able to accept Visa or MasterCard in order to be able to process a micro-purchase. If your business usually runs through a third party (such as PayPal), the government considers it a “high risk” expenditure and will be less likely to seek you out. That’s something you should keep in mind if you run a small business and hope to work with the government at some point in the future.
Many smaller government expenditures are purchased through the micro-purchase process. Keep reading if you’d like to know how you can increase your chances of landing this type of government work.
How Can I Get in on This?
If you want to make sure your business has a shot at winning these micro-purchases, there are a few things you can do. The main thing to remember is that micro-purchases are done without competition or procurement, so you’ve got to find ways to make sure the decision-makers know you’re ready and willing to help them out. I’ve got a few suggestions ready for you, to help your thinking:
- Make sure your website makes it clear you’re available. When the decision-maker goes to find a firm to take care of a micro-purchase, the most likely thing for them to do is go online and Google local companies that can handle the job. Naturally, it’s a given that you’ll need a good-looking website and do all you can to rank high on search engines. But you’ll also want to include the SmartPay logo on your site and marketing materials, just to make sure it’s clear that you’re willing to process P-card purchases.
- Introduce yourself to P-card holders. Like anybody else, government P-card holders prefer to do business with people they already know. So if you take the time to visit them personally, introduce yourself, and make sure they know you can handle any micro-purchases that come along, you’ll increase your odds of landing those government jobs.
- Develop professional relationships and track procurements. You’ll also want to make sure to keep track of any government procurements that have been issued. There’s plenty of work out there for your small business, and if you’re SAM-registered it pays to check on the TendersPage database so you can keep track of the latest government procurements. There’s always plenty of work the government needs to be done, and there’s no reason to deny yourself a piece of that Set Aside action.
Recap: Work for the Government Without SAM Registration
So let me give you the takeaway: the federal government spends roughly 20 billion dollars a year in micro-purchases of less than $3,500 apiece. These micro-purchases are simple credit card transactions that require no red tape. All you need to qualify is to be contacted by a holder of a Government Purchase card, and it’s easier to do that if you’ve already developed a professional relationship with them.
It’s as simple as that. With micro-purchases, there’s no requirement for competition between contractors, there’s no requirement for SAM registration, and there’s no complicated bidding process to qualify. All you need to do for your small business to get a chance at these smaller projects is to make it clear you accept government SmartPay cards and get to know some government employees.
Unlike everything else with the federal government, micro-purchases are quick, easy, and don’t require a huge pile of paperwork. Give it a try today.