Defense Contracting: What Every Business Owner Needs to Know
- Sharon Lewis
- 1 hour ago
- 3 min read
There's a version of your company's future where a Department of Defense contract isn't a distant, mythical thing that "other companies" win — it's a real revenue line on next year's forecast. The opportunity is real: DoD spends hundreds of billions annually on everything from IT services and logistics to engineering, cybersecurity, and manufacturing. But the path to a first award is crowded with acronyms, procedures, and unwritten rules that can make even experienced commercial businesses feel like beginners.
That's where McAllister Brown Associates (MBA) comes in — giving businesses the clarity, strategy, and structure to compete in defense markets without wasting years figuring it out the hard way. Here's your starting point.
What Is Defense Contracting?
Defense contracting means selling goods or services to the Department of Defense and its components — the Army, Navy, Air Force, Space Force, Marine Corps, and agencies like DLA and DARPA. It's governed by the Federal Acquisition Regulation (FAR) and its defense-specific supplement, the DFARS, which dictate how contracts are solicited, evaluated, awarded, and managed.
Almost any business can participate, whether as a prime, a subcontractor, or part of a teaming arrangement. Success isn't about size — it's about understanding the rules of the game and building the internal capability to compete on the government's terms.
Why Small and Mid-Sized Businesses Should Care
DoD is required to set aside a significant share of contracting dollars for small businesses, including SDVOSB, WOSB, and 8(a) firms. The door isn't just open — it's propped open by policy. But opportunity and readiness are different things. Most businesses face the same barriers:
Compliance complexity — cybersecurity requirements like CMMC, accounting standards, and clearances.
Pricing uncertainty — building a price that's compliant, competitive, and profitable.
Proposal capacity — writing compelling, compliant proposals under deadline pressure.
Relationship gaps — defense buyers favor contractors they already know and trust.
Success isn't about the best product — it's knowing how to position, price, and present it the way DoD is structured to buy. If your company has found commercial success but is struggling to translate that into federal wins, we've written specifically about why commercial success doesn't guarantee federal wins.
The Types of Defense Contracts
Fixed-Price — a set price for defined work; financial risk sits with the contractor.
Cost-Reimbursement — the government reimburses allowable costs plus a fee, common on complex R&D efforts, and requiring DCAA-compliant accounting.
IDIQ — a pre-vetted contractor pool competing for task orders over the contract's life; a long game that pays off in recurring work.
GSA Schedules — a GSA vehicle widely used by defense buyers as a faster, streamlined on-ramp, especially for IT and commercial products.
Each carries different risk profiles and proposal requirements, which is why contract-type fluency belongs in your go-to-market plan from day one.
The Defense Contracting Process
Registration and Certifications — SAM.gov registration, correct NAICS/PSC codes, relevant certifications, and increasingly, CMMC compliance.
Finding Opportunities — through SAM.gov, forecasts, industry days, and relationship-building with program offices long before an RFP drops. Waiting for the RFP is almost always too late; our government market research guide covers how to get ahead of it.
Capture and Proposal Development — understanding the customer, positioning differentiators, and building a compliant response. This is where most businesses separate themselves — or lose before submitting. See why winning starts long before you write a word.
Evaluation and Award — scored against stated criteria by a structured evaluation board.
Post-Award Performance — strong CPARS ratings and relationship management set up follow-on work.
Common Mistakes
Chasing every opportunity instead of running a disciplined go/no-go process.
Overbidding or underbidding — defense buyers can tell a strategic price from a guess.
Ignoring compliance details — a missed certification or non-compliant format can eliminate a strong bid before it's evaluated on merit.
Underestimating relationship-building — firms that show up only when an RFP is open compete against firms with months or years of trust already built.
Treating proposal writing as the strategy — proposals document a strategy, they don't create one.
If these sound familiar, the issue usually isn't effort — it's structure. We unpack this in why most firms are solving the wrong problem in government contracting strategy.
How to Get Started
Before spending another dollar on proposals, certifications, or a BD hire, get clear on: which parts of DoD actually buy what you sell, which contract vehicles and set-asides apply to you today, what your realistic 12–24 month capture pipeline looks like, and where your internal gaps are. This is the foundational work we help mid-sized firms get right before scaling — see our piece on scaling strategies for mid-sized firms.
Next Steps
The defense market rewards patience and strategy over speed and volume. Wherever you are in the journey, MBA can help: download our GovCon Starter Kit, book a Clarity Session, or talk with one of our fractional GovCon experts about capture, proposal, or pricing support.
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