Selling to Government can yield substantial return if your business is well-prepared for that. Becoming a GSA vendor requires compliance of your company to a number of GSA rules and qualifications. This article explains what are GSA entry requirements that a business should meet in order to certify as a GSA contractor. You can quickly check if your business qualifies for GSA contracts here.
To become a GSA certified vendor, you company must be have a DUNS number and a NAICS code, and be registered at SAM (System for Award Management) and CCR (Central Contractor Registration) systems. Overall, registering at GSA may take a few months, so if you plan to sell to federal agencies and local and state authorities, you may need to complete this step beforehand.
Before a company responds to a government solicitation, GSA requires its representatives to complete some online training. You really want to understand how the federal procurement system works to avoid pitfalls caused by anything but your own lack of knowledge.
This is not exactly an eligibility requirement, but proper contract preparation is vital for obtaining a GSA contract and saves you a lot of time. Make sure to read our article on GSA contract preparation.
Requirements to professional competence
GSA eligible vendors are required to prove their professional competence, responsibility and responsiveness, as well as their ability to provide the required level of service to the government.
Minimum 2 years in business
If you are a young startup, you may want to put your GSA contracting ambitions on hold. You see, the government does not want to work with immature businesses, fearing their financial and business processes has not established completely yet.
Products and services you are to offer to GSA must be previously available on the commercial market. If your products or services were not sold commercially before, you cannot sell them to the federal government either.
If your company offers services, you need to provide to GSA thorough descriptions of jobs and positions, QA protocols, employment and compensation policies. The reason is simple: the government wants the best, and it wants to be sure you know how to offer the best service.
If you do not manufacture products yourself, but only resell them to the government, you need to provide a letter of supply from the corresponding manufacturers. GSA wants to purchase goods from authorized resellers only.
Proofs of financial stability
The performance period of federal government contracts is 5 years, so GSA will only approve proposals of vendors that are financially stable companies. Here are the requirements:
Revenue of $25,000+/per year
Not only does your company need to show certain levels of revenue for the last two years, but is also required to sell within that amount to the government too if awarded. Otherwise, GSA may cancel your contract due to low sales. Also, you may need to provide a marketing plan that specifies how you will sell to GSA for at least the required amount.
First of all, your business must not be in debt. This, of course, does not mean GSA prohibits any loans or third-party financing a business may need to grow. However, there are certain rules GSA follows to see if a company is financially stable or not.
- A company has more current assets than current liabilities. As long as assets to liabilities ratio is above 1.0 and the equity is positive, the company is considered having enough short-term liquidity.
- A company is able to pay its long-term debts. Long-term solvency of a company is crucial too, so GSA seeks for good debt to equity ratios above 0.7.
- Positive sales dynamics. GSA entry for stagnating companies is barely possible. Your business must show firm annual growing trend to qualify.
Past performance requirements
To become a GSA certified vendor, a company must provide a Past Performance Evaluation report that meets GSA qualifications. GSA approval requirements for past performance are as follows:
Good customer reference
GSA requires an applicant to submit at least six references from previous customers up to a maximum of 20. Good Open Ratings score puts up greatly to a successful GSA Contract award.
Past experience in the selected SINs
Providing documented past experience in the selected spheres helps a lot to identify yourself as a company the government can trust. Specifically, you need to provide at least two previously completed projects for each SIN you submit your offer for.
No previous cancellations/rejections
Generally, if your offer was rejected or your contract was cancelled – this is bad, and GSA won’t approve your entry. However, there are options that may help even in this case. If your previously submitted offer was rejected, you should provide a rejection letter you received as well as the explanation of how you have fixed the issue. For previous cancellations, you should provide a detailed plan to deliver the required sales volume to GSA and avoid the contract being cancelled again.
GSA contract requirements include full Trade Agreement Act compliance of all products sold to the government. TAA compliant product means that the product is manufactured in one of designated countries. You can read our guide on TAA compliance here.
Most Favored Customer requirement
The government expects from you fair and competitive prices for products and services your offer. This means you must sell to government at the same or lower prices that you would on the commercial marketplace. The MFC principle suggests that you offer your best discounts to the government.
The “Essentially The Same” requirement prohibits vendors from offering or shipping a commercial item that is deemed equivalent to a product manufactured under egis of the AbilityOne program. This requirement aims to protect goods manufactured by disabled or partially disabled people, and hence all ETS products must be removed from the contract.
Surely, GSA entry requirements are numerous and require paying attention to many details in order to comply. That is why hiring a professional agency that can secure GSA vendor registration by taking all the hassles upon itself is a wise and recommended step.