Top 10 Mistakes New Government Contractors Make (And How to Avoid Them)

The System for Award Management (SAM.gov) is the federal government’s single registration portal for entities that want to do business with the U.S. government. Registration is mandatory under FAR 4.1102 ^[2], and the clauses that enforce it — FAR 52.204-7 (SAM registration requirement) and FAR 52.204-8 / 52.212-3 (Representations and Certifications, often called “Reps & Certs”) — mean that without an active, accurate SAM record, you cannot submit most offers and you cannot get paid ^[2].

Since April 4, 2022, the Unique Entity Identifier (UEI) replaced the legacy DUNS number. New registrants now receive a UEI directly through SAM.gov. If you are still referencing a DUNS number on marketing materials or capability statements, update immediately — contracting officers notice. You can verify your UEI quickly using GovBidLab’s free UEI Lookup tool.

The most damaging SAM registration errors are deceptively simple: selecting the wrong North American Industry Classification System (NAICS) codes, which directly drive your small-business size-standard eligibility; failing to complete the full Reps & Certs section; or entering a legal business name or Taxpayer Identification Number (TIN) that does not exactly match your IRS records. A mismatch between your SAM legal name and your IRS records will prevent SAM validation from completing, which blocks your registration and any awards that depend on it. Build a calendar reminder to renew annually — SAM registrations lapse after 12 months and lapsed registrations disqualify otherwise strong proposals.

Many new contractors assume that being “small” is self-evident. It is not. The SBA assigns a size standard — either an employee count or an average annual revenue ceiling — to every NAICS code, and your eligibility is measured against the specific NAICS code assigned to the solicitation, not the one you prefer ^[6]. A company that qualifies as small under one NAICS code may be “other than small” under another. FAR Part 19 and SBA rules at 13 CFR Part 121 govern this determination ^[6]. You can confirm the applicable size standard using GovBidLab’s free NAICS Code Lookup tool.

Two rules trip up newcomers regularly:

• The Nonmanufacturer Rule (13 CFR 121.406): If you are a small business bidding on a supply set-aside for products you did not manufacture, you must meet a four-part test — including having no more than 500 employees — or hold an applicable SBA waiver. Otherwise, the product must come from a small domestic manufacturer ^[6].
• Limitations on Subcontracting (13 CFR 125.6; FAR 52.219-14): On set-aside contracts, there are caps on how much of the contract value you can pay to firms that are not “similarly situated.” The thresholds are shown in the table below ^[7].

Government proposals live and die on compliance. Under FAR Part 15 (negotiated procurements) and FAR Part 12 (commercial-item acquisitions), the solicitation’s Section L tells you exactly how to format and organize your proposal, and Section M tells you exactly how it will be evaluated ^[3]. Deviating from Section L — wrong page count, missing volume, unsigned document — can make your proposal non-responsive before an evaluator reads a single word of your technical approach.

The late-submission rules are unforgiving. FAR 52.215-1(c)(3)(ii)(A) for negotiated procurements and FAR 52.212-1(f)(2)(i) for commercial acquisitions both state the same principle: an electronically submitted offer received after the exact date and time specified is late, and late offers will not be considered — unless a narrow “government control” exception applies, such as a government system outage ^[3]. “My internet was slow” is not an exception. Experienced practitioners know to submit 24 to 48 hours early and retain timestamped confirmation receipts. The practical tool is a compliance matrix: a spreadsheet mapping every Section L instruction to the exact location in your proposal where it is satisfied. Build it before you write a single page.

For newcomers building their first proposal, GovBidLab’s free Capability Statement Generator can help you structure the foundational marketing document that often accompanies or precedes formal bids.

This is where new contractors lose money — sometimes catastrophically. Two federal wage laws create pricing floors that you must build into your cost model:

Service Contract Labor Standards (SCLS), formerly called the Service Contract Act (SCA), applies to most service contracts exceeding $2,500 and is implemented by FAR Subpart 22.10 and 29 CFR Part 4 ^[4]. SCLS requires you to pay covered employees no less than the wages and fringe benefits specified in a Department of Labor (DoL) wage determination attached to the solicitation. Those fringe benefits include health and welfare payments that are currently around $4.98 per hour (the exact rate changes annually). If you do not model these costs correctly, you will underprice the contract — and once you win, you are legally required to pay them whether or not your price supports it.

Davis-Bacon Act (DBA) applies to construction contracts exceeding $2,000 and is governed by FAR Subpart 22.4 ^[4]. It works similarly — requiring prevailing wages and fringe benefits for laborers and mechanics on the project — but uses construction-specific wage determinations.

A practitioner tip: always pull the wage determination from SAM.gov (they are posted there now, not on the legacy WDOL.gov site) and verify it matches the one referenced in the solicitation. Wage determinations are locality-specific and occupation-specific, and using the wrong one can unravel an otherwise competitive federal bid pricing strategy.

Wage compliance is only one dimension of pricing risk. Three additional traps await:

Unbalanced pricing (FAR 15.404-1(g)): If your price proposal front-loads revenue into early contract line items (CLINs) or option years — perhaps to improve cash flow — the government may reject it as “materially unbalanced” because it poses a risk that the government will pay an unreasonably high price if later CLINs are not exercised ^[8].

Price reasonableness vs. cost realism: In a lowest-price technically acceptable (LPTA) evaluation, the government checks whether your price is reasonable — not too high, not suspiciously low. In a best-value trade-off with cost-reimbursement elements, the government performs cost realism analysis, adjusting your proposed costs to what the government believes performance will actually cost. New bidders often confuse these concepts, pricing as if every evaluation is simply “lowest price wins.” It is not.

Truthful Cost or Pricing Data (TCoPD): Formerly known as the Truth in Negotiations Act (TINA), FAR 15.403-4(a)(1) requires contractors to submit certified cost or pricing data for contracts expected to exceed $2,000,000, unless an exception applies (adequate price competition, commercial-item determination, or waiver) ^[8]. Submitting inaccurate certified data — even unintentionally — can trigger a price reduction and even a False Claims Act investigation. Know when TCoPD applies before you submit.

If you plan to perform Department of Defense (DoD) work that involves Controlled Unclassified Information (CUI), cybersecurity compliance is not a future concern — it is enforceable today. DFARS 252.204-7012 requires safeguarding covered defense information using the 110 controls in NIST Special Publication 800-171 and mandates reporting cyber incidents to the DoD within 72 hours of discovery ^[9].

Additionally, DFARS 252.204-7019 and 252.204-7020 require contractors to complete a NIST SP 800-171 self-assessment, calculate a score (out of 110), and post it to the Supplier Performance Risk System (SPRS) before award ^[9]. A perfect score of 110 means full implementation of all controls; most new contractors score far lower, and that score is visible to contracting officers.

The Cybersecurity Maturity Model Certification (CMMC) program, implemented through DFARS 252.204-7021, will add third-party assessment requirements when a solicitation mandates it. While CMMC rulemaking is still being phased in, waiting until a solicitation requires it is too late — remediation can take 12 to 18 months. GovBidLab’s free CMMC Calculator can help you estimate your readiness and identify gaps in your CMMC NIST 800-171 compliance posture now.

Two categories of supply-chain rules catch new contractors off guard:

Section 889 prohibitions (FAR 52.204-24, -25, -26): These clauses prohibit the government from contracting with entities that use or provide “covered telecommunications equipment or services” from companies like Huawei and ZTE (and their subsidiaries). The prohibition is broad — it applies not just to what you sell to the government, but to equipment used anywhere in your enterprise under Part B of Section 889. You must make affirmative representations in your proposal, and a false representation can trigger False Claims Act exposure ^[5].

Buy American Act (BAA) and Trade Agreements Act (TAA): The BAA (FAR Part 25, FAR 52.225-1) requires that manufactured end products delivered to the government be produced in the United States with a minimum domestic content threshold. That threshold has been increasing: it rose to 60% in 2022, reached 65% in 2024, and is scheduled to hit 75% by 2029, with a fallback provision available through 2030 for certain products ^[5]. The TAA (FAR 52.225-5) applies above certain dollar thresholds and restricts purchases to products from the U.S. or designated countries — meaning products manufactured in non-designated countries (including China and India for most items) are ineligible even if they satisfy the BAA domestic content test. If you sell products, you need a supply-chain map that traces country of origin before you commit to a bid ^[5].

Winning the contract is only the beginning. New awardees frequently stumble on three post-award fundamentals:

• 1 Invoicing systems: DoD contracts typically require invoicing through the Wide Area Workflow / Invoicing, Receipt, Acceptance, and Property Transfer (WAWF/iRAPT) system. Many civilian agencies use the Invoice Processing Platform (IPP). Your invoice must correctly reference the contract’s Accounting Classification Reference Numbers (ACRNs) and Contract Line Item Numbers (CLINs). A single digit wrong in an ACRN can bounce your invoice back and delay payment by 30 days or more.
• 2 Deliverable management: DoD contracts often include a Contract Data Requirements List (CDRL) specifying data deliverables with exact formats, due dates, and distribution lists. Missing a deliverable — even a routine monthly status report — creates a record that can surface in your performance evaluation.
• 3 CPARS ratings: The Contractor Performance Assessment Reporting System (CPARS) is the government’s performance-rating platform. Your ratings follow you for years and directly influence future source-selection evaluations. You have the right to respond to any rating — proactive communication with your Contracting Officer’s Representative (COR) can prevent negative narratives from solidifying.

Federal acquisition is built on thresholds that change what rules apply, what competition is required, and what data you must provide. New entrants who do not internalize these thresholds will consistently misread solicitations and misprice proposals ^[1][4][8]:

Losing a bid is inevitable. Wasting the debrief that follows is not. Under FAR 15.506, unsuccessful offerors in negotiated procurements are entitled to a post-award debriefing that must include the overall evaluated rating of both the awardee and the requesting offeror, the rationale for the award, and a summary of the evaluation of significant weaknesses or deficiencies ^[10]. This is not a courtesy call — it is a structured data-collection opportunity that should inform your next proposal.

For DoD procurements, “enhanced debriefings” under a class deviation add a two-business-day question-and-answer window after the initial debrief, and the clock for filing a GAO protest does not start until that window closes ^[10]. Under GAO’s Bid Protest Regulations at 4 C.F.R. Part 21, the general rule for obtaining a Competition in Contracting Act (CICA) automatic stay — which stops the agency from proceeding with the award while GAO considers your protest — is that the protest must be filed within five calendar days after the debriefing date (or, for DoD enhanced debriefings, after the Q&A window closes) ^[10]. Miss that five-day window and you lose the automatic stay — and with it, much of your leverage.

Even if you never intend to file a protest, the debriefing data is gold. Ask specific questions: What was my technical rating relative to the awardee’s? Were there concerns about my past performance? Was my pricing evaluated as realistic? The answers will sharpen every future pursuit and are essential to understanding how to win government contracts the next time.

Pick the three mistakes from this list that are closest to your current situation and address them this week. If you have not registered in SAM.gov, start there — it takes time, and errors compound. If you are already registered, log in today and verify that your NAICS codes, UEI, and Reps & Certs are current and accurate. And if you have recently lost a bid, request that debriefing before the deadline passes. Every one of these mistakes is fixable, but only if you act before the next solicitation drops. Explore GovBidLab’s full suite of free government contracting tools to accelerate your preparation.