Government Construction Contracts

Start by registering on SAM.gov with NAICS codes for your construction specialty (e.g., 236220 for commercial building, 237310 for highway work). Obtain surety bonding before bidding — federal construction contracts over $150,000 require performance and payment bonds under the Miller Act. Monitor SAM.gov daily for solicitations matching your capabilities, and consider starting with state and local government work to build past performance before pursuing federal contracts.

The Davis-Bacon Act requires contractors to pay workers the locally-prevailing wage and fringe benefits for their job classification on federally-funded construction projects over $2,000. The Department of Labor publishes wage determinations by county and trade classification. These wages are typically higher than market rates and must be factored into your bid pricing. Non-compliance can result in contract termination, debarment, and back-wage liability.

Federal construction contracts over $150,000 require performance bonds and payment bonds equal to 100% of the contract value under the Miller Act. Bid bonds (typically 20% of bid price) are also required on most solicitations. Bonding capacity is set by your surety and depends on your financial statements, work-in-progress, and credit history. Most small contractors start with bonding capacity of $500K–$2M, which is sufficient for a large portion of available set-aside work.

8(a) is the most powerful program for construction — the SBA can award sole-source 8(a) contracts up to $4 million without competition. HUBZone is particularly valuable in construction because many qualified zones are in rural areas where substantial construction activity occurs. SDVOSB set-asides are common in VA construction work, which represents billions annually in healthcare facilities and veterans housing. All these certifications require active SAM.gov registration and separate SBA certification.

Yes — and the government has structural advantages designed to help. Contracts under $2 million are often set aside exclusively for small businesses, eliminating competition from large firms entirely. Mentor-Protégé agreements allow you to team with a large prime contractor and share their past performance and bonding capacity on joint ventures. The MATOC (Multiple Award Task Order Contract) vehicle allows small firms to compete for task orders after winning a base award, which remains a viable entry point for growing contractors.