what is a federal contractor

A federal contractor is a person or organization that enters into a contract, or is bidding on such a contract, with any agency or department of the United States government and is paid, or is to be paid, for services, material, equipment, supplies, land or buildings with funds appropriated by Congress. The U.S. government is the worlds largest customer and buys all types of products and services, and is required by law to provide opportunities for small businesses. There are two broad categories of government contractors: prime contractors, who bid on and win contracts directly from government agencies, and subcontractors, who join prime contractor teams, usually to provide a specific capability or product. Federal government contractors are prohibited from making contributions or expenditures, or promising to make any such contribution or expenditure, to any political party, committee, or candidate for federal office, or to any person for any political purpose or use. To legally qualify as a small business and register as a government contractor, businesses must comply with federal contracting rules, which include legal requirements like the Buy American Act and the Trade Agreements Act, limits to how much you can subcontract and who you can subcontract with, and minimum amounts for you to spend on work or materials for the contract.