Capability Is Only Part of the Equation
A lot of companies want to grow in the federal market.
They want larger contracts. More agency customers. More revenue. Maybe eventually the opportunity to compete for work that once seemed well beyond their reach.
But there’s a question that doesn’t always get asked along the way:
Is the company actually ready for that growth?
Having the technical capability to perform the work is one thing. Having the past performance, people, processes, relationships, contract access, and customer credibility to support a larger opportunity is something else.
That distinction becomes pretty clear when you look at how some successful federal contractors actually grew.
Take Radiance Technologies. The company started in 1999 with three employees. According to a 2015 SBIR success story, some of its early government work came through SBIR contracts with the Department of Defense and USDA. Over time, the company expanded its capabilities from sensor data collection into areas including sensor exploitation, intelligence analysis, algorithms, software, R&D, and prototype integration.
Eventually, Radiance competed for a NASA opportunity even though it didn’t have previous NASA experience.
That’s an interesting story. But the bigger point isn’t really Radiance.
It’s what the story says about how companies build themselves into credible competitors in the federal market.
Growth Usually Starts Before the Big Contract
It’s easy to look at a large federal contract and see the moment a company “made it.”
What you don’t see as easily are the years of work that came before it.
For an emerging contractor, an early opportunity may not transform the company financially. It may, however, give the company something that becomes increasingly valuable as it grows: evidence that it can deliver.
That’s one reason smaller contracts, research projects, subcontracts, and other early federal opportunities shouldn’t automatically be viewed as stepping stones to something bigger. Sometimes they’re valuable simply because they allow a company to gain experience with a government customer and learn how to operate in that environment.
The federal government continues to be a significant market for small businesses. The SBA reported that small businesses received nearly 28% of federal prime contract dollars in FY2025, representing $179 billion in awards.
There are opportunities.
The harder question is whether a company is prepared to take advantage of the right ones.
“We Can Do It” Isn’t the Same as “We’ve Done It”
This is where a lot of growth strategies get complicated.
A company may genuinely have the people and technology to perform a contract. But a federal customer evaluating that company isn’t necessarily making a decision based only on what the company says it can do.
There’s a difference between capability and evidence.
That doesn’t mean every opportunity requires identical past performance. It does mean a company needs to think carefully about how it demonstrates that its experience is relevant to the customer’s problem.
Radiance is a good example.
When the company pursued NASA’s Engineering Solutions and Prototyping opportunity in 2013, SBIR.gov reported that Radiance had no prior NASA experience. NASA selected Radiance along with Teledyne Brown Engineering and Wyle for ESP contracts supporting Marshall Space Flight Center. The three contracts had a potential value of $350 million over five years.
Radiance didn’t have NASA past performance to point to.
It did have experience in areas that were relevant to the work.
That’s an important distinction for companies trying to enter a new agency or market.
You may be new to the customer without being new to the problem.
The challenge is being able to explain that connection in a way that makes sense to the person evaluating your company.
Sometimes the First Customer Isn’t the Customer You Thought You’d Have
Companies often talk about their target agencies as though growth means going directly after the customer they want most.
That can work. It can also create a pretty high barrier to entry.
Another approach is to look at where the company can establish credible experience first.
A small technology company might work with one agency and discover that the capability it developed has applications somewhere else. An R&D project might lead to a prototype that becomes relevant to another program. A subcontract might give a company experience that helps it compete for prime work later.
There’s no guarantee any of those things will happen.
But they’re worth considering when building a growth strategy.
DataSoft, for example, received an Air Force SBIR contract in 2007 to develop a solution involving tactical radio communications. The Arizona small business subsequently developed technology around that work, including the SideBridge tactical radio accessory and BlueLink Android application.
The lesson isn’t that every SBIR project becomes a major business opportunity.
It doesn’t.
The lesson is that a company can use a government-funded technical problem to demonstrate what it can build and solve. That experience can become part of the company’s larger story.
Research Can Be More Than Research
This is particularly relevant for technology companies.
SBIR and STTR programs exist to provide early-stage funding for technology-focused small businesses, and the federal program maintains hundreds of documented success stories showing how companies have used that funding to advance technologies.
For a company that’s already investing in R&D, the opportunity isn’t simply about obtaining funding.
The work can also create experience.
Radiance’s SBIR history is one example. By the time of the 2015 SBIR success story, the company had completed or was working on 86 Phase I and Phase II projects. The agency described SBIR as an important part of Radiance’s ability to move concepts through prototyping, integration, testing, and evaluation.
Touchstone Research Laboratory offers another example. The company began with materials research and eventually developed into a supplier serving government and commercial customers. Its SBIR success story describes how the company began focusing more aggressively on the program after seeing what another successful SBIR company had accomplished.
Again, these aren’t formulas.
They are examples of something worth considering: the work you’re already doing may be creating more business value than you’re giving it credit for.
The question is whether you’re recognizing that value and building on it.
Growth Can Expose Problems You Didn’t Have Before
There’s another side of this conversation that doesn’t get as much attention.
Sometimes a company wins the opportunity it wanted—and then discovers that the organization wasn’t ready for it.
A larger contract can mean more employees, more management, more compliance requirements, more financial pressure, more recruiting, more infrastructure, and more complicated customer relationships.
That’s why growth shouldn’t be measured only by contract value.
A $20 million opportunity isn’t necessarily better than a $2 million opportunity if the larger contract stretches the company beyond what it can realistically support.
Being ready to grow means knowing what has to change when the size and complexity of the work changes.
Can you staff it?
Can you manage it?
Can your financial systems support it?
Can your contracts and compliance processes keep up?
Do you have the leadership capacity to manage a larger organization?
And perhaps most importantly, can you deliver the work at the level that made the customer want to hire you in the first place?
Those questions aren’t as exciting as talking about a big contract award.
They’re probably more important.
The Goal Isn’t Just to Win More
There’s nothing wrong with wanting to grow.
But there’s a difference between pursuing growth and simply pursuing bigger contracts.
The companies that build sustainable federal businesses tend to have to solve several problems at once: finding the right opportunities, developing relevant capabilities, building relationships, establishing past performance, finding the right contract vehicles, hiring the right people, and delivering well enough that customers want to work with them again.
That takes time.
And it doesn’t always happen in a straight line.
Radiance started with three employees. DataSoft used an Air Force SBIR project to develop technology for a specific government problem. Touchstone built its business around materials research and eventually expanded its government and commercial customer base. These are very different companies and very different stories, but they have something in common: their growth was built on work they had already demonstrated they could do.
That’s probably the more useful way to think about growth in GovCon.
Not, “How do we get the biggest contract we can find?”
But:
“What do we need to prove, build, or strengthen now so we’re ready for the opportunity we want next?”
That’s a much harder question.
It’s also a much more useful one.
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ABOUT THE AUTHOR: Tracey Aubey is a Media Director at FORUM with nearly 30 years of experience in media and communications. Her background spans broadcasting, content creation, production, and digital media. She brings a storyteller’s perspective to her work, with a focus on creating content that informs, connects, and engages audiences across government and industry.
