Selling to the government: how federal, state and local agencies buy

This guide is for companies that want to sell products or services to government: IT and software firms, facilities and grounds contractors, training providers, equipment suppliers and consultancies. It covers the size of the market, how to get a list of government agencies, the federal rules that decide how buying works, who decides, when agencies spend, and a worked example. It's general information, not legal advice; the Federal Acquisition Regulation (FAR) is long and agency supplements add more.

How big the government market is

Federal agencies obligated $778.9 billion on contracts in fiscal 2025 (October 2024 to September 2025), according to USAspending.gov. Spending is concentrated: the Defense Department alone obligated $492.2 billion.

State and local government is a separate market with its own rules. The Census Bureau's 2026 count found 91,729 local governments as well as the 50 states:

A list of federal agencies, and why it isn't your target list

USAspending.gov lists 111 top-tier federal agencies, and 69 of them awarded contracts in fiscal 2025. USA.gov keeps an A to Z index of agencies with websites and phone numbers, and the Federal Register's agency list includes sub-agencies and some that no longer exist.

A list of agencies tells you who exists, not who buys what you sell. Buying happens in contracting offices inside sub-agencies (an Army installation, a VA medical center, a regional GSA office), so build your target list from past contracts instead. On USAspending.gov you can filter awards by your industry code and state and see the awarding office, the company that won, the amount and when the contract ends. Recurring needs come back up for competition, which makes expiring contracts the best leads in government sales.

How federal buying works

The FAR sets dollar thresholds that decide how much competition and paperwork a purchase needs:

Three more rules shape the market:

• Registration. Offerors must be registered in SAM.gov when they submit an offer, apart from narrow exceptions such as card-paid micro-purchases. Registration must be renewed every 365 days.
• Small business goals. Federal law sets a governmentwide goal of at least 23% of prime contract dollars for small businesses, with further goals of 5% for service-disabled veteran-owned, 5% for women-owned and 5% for small disadvantaged businesses, and 3% for HUBZone firms. Every agency with buying power has an Office of Small and Disadvantaged Business Utilization to help meet them.
• Contract vehicles. Much buying runs through existing contracts that pre-qualify vendors. GSA's Multiple Award Schedule is the best known, and GSA lists federal, state, local and tribal governments among its eligible buyers.

Steps to start selling to the federal government

1. Pick your industry codes. Find the NAICS codes that describe what you sell. They drive set-asides, size standards and search filters.
2. Register in SAM.gov. You get a Unique Entity ID and complete the representations every offer relies on.
3. Find the buyers. Search USAspending.gov for past awards under your codes. Note the offices, the incumbents and the end dates.
4. Answer market research. Agencies must do market research before new requirements and before solicitations over $350,000, often through sources sought notices and requests for information on SAM.gov. Responding is how you shape a requirement and show a contracting officer that small businesses can compete.
5. Meet the small business office. Each agency's small business specialists can tell you which offices buy what you sell.
6. Bid, quote or subcontract. If you can't prime yet, subcontract to a company that holds the contract.
7. Consider a schedule. A GSA schedule contract makes it easier for agencies to buy from you without a new competition.

Who decides

Courtesy has limits. Federal employees may generally accept unsolicited gifts worth $20 or less per occasion, and no more than $50 a year from one source. Buy your own coffee.

When agencies buy

The federal fiscal year starts on 1 October, and money that isn't obligated by 30 September can expire. In fiscal 2025, agencies obligated $148.5 billion on contracts in September, 19.1% of the year's total and more than twice the monthly average of $64.9 billion. In fiscal 2024, September was 17.6%.

The year-end rush mostly goes to vendors buyers already know, through vehicles that are already in place. Register, answer sources sought notices and meet program offices in spring and summer so you're an option when September comes. If you sell to hospitals as well, note that the 132 VA hospitals on CMS's hospital list buy through federal contracting, not the commercial routes in our guide to selling to hospitals.

Selling to state and local government

Each state, county, city and district sets its own procurement rules, thresholds and fiscal year, and posts bids on its own portal. Expect formal bids above a local dollar limit, local preference rules in some places, and cooperative contracts that let one government buy from a contract another government awarded. Start with the governments near you: they're easier to visit, and a local reference helps with the next one. Finding the right people (the facilities director, the IT manager, the purchasing agent) across hundreds of governments is slow work, and Bebop can find those contacts and research each agency in your list.

Worked example: grounds maintenance in Texas

Illustrative example. The company and plan are fictional; the contract figures come from USAspending.gov for fiscal 2025.

The seller: Live Oak Grounds (liveoak-grounds.example), a 30-person landscaping company in San Antonio. The question: is federal work in Texas worth pursuing?

What the data shows. Under NAICS 561730 (landscaping services), federal agencies obligated $45.6 million for work performed in Texas in fiscal 2025, through 18 awarding sub-agencies and 112 contractors. The Army accounted for $20.2 million, the Air Force $15.0 million and the VA $5.2 million.

The arithmetic. If a typical grounds contract runs a base year plus four option years (an illustrative assumption), about a fifth of that work comes up for competition each year: roughly $9 million. Winning 10% of what recompetes (also illustrative) would add about $900,000 a year, a meaningful share for a 30-person firm.

The plan.

1. Register in SAM.gov under 561730 and confirm the company meets the small business size standard for that code.
2. Pull the Texas awards from USAspending.gov and list each contract's office, incumbent and end date.
3. Set SAM.gov alerts for 561730 in Texas and answer every relevant sources sought notice.
4. Contact the small business offices at the Army and Air Force installations that awarded the most.
5. Note the micro-purchase limit: landscaping is a service under the Service Contract Labor Standards, so card buys stop at $2,500. Small jobs still need a quote.

[COMPANY NAME] | UEI: [number] | CAGE: [code]
Small business status: [e.g. small business, SDVOSB, WOSB, HUBZone]
NAICS codes: [primary code first]

CORE CAPABILITIES
- [capability, in the agency's words]
- [capability]
- [capability]

PAST PERFORMANCE
- [customer, contract or PO number, value, dates, what you delivered]
- [customer, value, dates, result]

DIFFERENTIATORS
- [something a contracting officer can verify, e.g. response time, certifications, local crews]

CONTACT
[name, title, phone, email, website]

Checklist before you pursue a contract

• You're registered and active in SAM.gov, under the right NAICS codes.
• You know your size status for each code.
• You've read the past awards, the incumbent and the end date.
• You've answered the sources sought notice, if there was one.
• You can show past performance of similar size and scope, or have a partner who can.
• You've read every instruction in the solicitation, including page limits and deadlines.

Common mistakes

• Starting with a list of agencies. Start with past contracts for what you sell.
• Waiting for the solicitation. By then the requirement is written; influence happens during market research.
• Ignoring subcontracting. Teaming with a prime builds the past performance you need to bid alone.
• Letting SAM.gov lapse. An expired registration can cost you an award.
• Treating state and local like federal. Every jurisdiction has its own rules and portals.

Next step: profile your top five buying offices with the account profiling template: what they bought, from whom, when it ends, and the one question you'd ask the program office.