The short answer
Bidding on government contracts means finding solicitations that fit, registering where buyers require it and submitting a compliant proposal on time. AI helps a small business sort opportunities, read a long solicitation and structure a proposal. Pricing, commitments and certifications stay with the owner, and nothing replaces reading the solicitation yourself.
We make Extra, an AI agent platform, so this article is written by an interested party. Facts about other tools and about the law come from the sources listed at the bottom, as of the date shown.
Can a small business really win government contracts?
Yes. The federal government awarded nearly 28% of its prime contract dollars to small businesses in fiscal year 2025, about $179 billion, according to the SBA’s scorecard, above the government-wide goal of 23%. State, county and city buyers also buy a great deal from local small firms, often in amounts that never make headlines.
The entry point is usually small. Since October 1, 2025, the federal micro-purchase threshold is $15,000 (up from $10,000) and the simplified acquisition threshold is $350,000 (up from $250,000), after the FAR Council’s inflation adjustment. Below the micro-purchase level, a buyer can often purchase with little formality; under the simplified threshold, procedures are lighter and many buys are reserved for small businesses.
The practical consequence: for small buys, being known to the right buyers matters as much as answering a posted solicitation well.
Where do you find opportunities that fit?
Federal opportunities above certain amounts are posted on SAM.gov; state and local opportunities appear on each state’s procurement portal and on city and county bid pages. Access is free; the work is sorting.
| Federal purchase size | Typical approach | How to position yourself |
|---|---|---|
| Up to $15,000 | Micro-purchase, often by government purchase card | Be easy to find and easy to pay |
| Up to $350,000 | Simplified acquisition, often set aside for small businesses | Watch SAM.gov, meet small business specialists |
| Above $350,000 | Full competition | Often as a subcontractor or in a team |
A good search filters by your NAICS codes, location and size, then drops what does not fit. That is where AI saves the most time: reading fifty notices a week to keep three.
What do you need before you bid?
To bid as a federal prime contractor, you need an active SAM.gov registration, which includes a Unique Entity ID. Registration is free, registrations expire after 365 days unless renewed, and SAM.gov advises allowing at least ten business days for a new one to become active.
- SAM.gov registration: free; beware of companies charging to “register” you.
- NAICS codes: the codes that describe what you sell; they decide which set-asides you qualify for.
- Certifications, if eligible: such as 8(a), women-owned, HUBZone or service-disabled veteran-owned.
- A capability statement: one page on what you do, past performance, codes and contact.
- State and local vendor registrations for the buyers near you.
How does AI help you bid, step by step?
AI helps at every step that involves reading, sorting or structuring; it does not help where you make commitments. Here is a method that keeps you in control.
- Sort notices: AI reads the week’s opportunities and keeps those matching your codes, area and size.
- Read the solicitation: it summarizes instructions, evaluation factors, required forms and the deadline.
- Decide bid or no-bid: you decide, with a simple grid (fit, margin, workload, odds).
- Outline the proposal: it proposes a structure that follows the evaluation factors, then drafts from your real information.
- Check compliance: it checks every required section and form against the instructions.
- Price and sign: you, and only you.
Common mistake: a generic proposal written by AI without your real information, repeating the statement of work back to the buyer. Evaluators spot it immediately. Give AI your actual team, methods and past performance, and read every commitment before it goes out.
What goes into a proposal that scores well?
A proposal that scores well answers the evaluation factors in the order the solicitation lists them, with specific evidence for each one. Evaluators score against a sheet; make their job easy.
| Section | What evaluators look for | What AI can draft |
|---|---|---|
| Technical approach | A clear plan that answers each requirement | A structure mapped to each requirement |
| Management and staffing | Who does the work, and their experience | Short bios from your notes |
| Past performance | Similar work, size, results, references | Consistent write-ups of your real projects |
| Price | Realistic, complete, in the required format | Nothing: price is yours |
| Forms and certifications | Every required form, signed and complete | A checklist against the instructions |
Use the buyer’s own words for section headings, answer every “shall” in the requirements, and keep to page limits: a proposal over the limit can be rejected without being read.
When should you not bid?
Skip a bid when you cannot meet the schedule, when the winning price will likely be below your cost, or when the evaluation clearly favors a profile you do not have. A losing proposal can cost days of work.
- The solicitation asks for past performance you do not have yet: aim for subcontracting first.
- The response window is too short for a serious proposal.
- The contract is too large for your cash flow, given federal payment timelines.
After a loss, ask for a debriefing when it is offered: it is the best training for the next bid.
How does Extra help with government contracts?
Extra (hello-extra.com), the AI agent platform for small businesses, helps around the bid rather than with the bid itself. Jim, the prospecting agent, ranks target accounts and runs email and LinkedIn outreach to the people you choose (see Jim); his automatic public-signal feeds cover French registries today, so for US opportunities you bring the notices. Clara reviews contract documents and flags points to check, and Pam tracks deadlines in your calendar. Extra costs $99 per month for all eight agents (pricing).
When Extra is not the right fit: if you bid on several large solicitations a month, a proposal consultant or dedicated government contracting software will serve you better.
Frequently asked questions
Do I need federal past performance to bid?
No. Commercial past performance counts, and many small buys weigh price and capability more than history.
Can AI fill out federal forms?
It can prepare answers from your information, but you certify them. Check every entry; representations and certifications carry legal weight.
How long does a first bid take?
Plan two to three days for a first serious proposal. Later ones go faster because the capability statement and past performance reuse.
Where should you start this week?
- List your NAICS codes and service area.
- Register or renew on SAM.gov, for free.
- Write a one-page capability statement.
- Save searches on SAM.gov and your state portal.
- Bid on one small opportunity, then review what you learned.
Read next: AI prospecting, reviewing a contract with AI and our guide to AI agents for small businesses.
Sources
- U.S. Small Business Administration, “SBA Releases FY25 Scorecard for Small Business Contracting,” 06/25/2026
- Pillsbury, “Federal Acquisition Regulatory Council Inflation Thresholds,” 2025
- SAM.gov, “Entity Registration Checklist,” 10/2024
- U.S. Small Business Administration, “Small business procurement scorecard,” accessed 11/06/2026
