government subcontracting plan allows small businesses to sell to the government by partnering with a large business prime contractor. Use GSA’s Subcontracting Directory and …
For starters, it can get your foot in the door and allow you to build a past performance track record with the government as a responsible vendor.
Subcontracting with a larger prime contractor offers small businesses a valuable entry point into government contracting, facilitating the establishment of a track record of past performance and demonstrating reliability as a vendor to government entities.
What is included in a Government subcontracting plan?
outlines specific goals for subcontracting to various types of small businesses and details the process for reaching those goals and reporting progress
Of course, it’s a great way to increase corporate revenue and gain some important government contracting experience. It’s also a good way to get into a government agency that you’ve been targeting.
Learning the Ropes: Government contracting comes with a laundry list of rules, regulations, and confusing reporting requirements. Starting as a subcontractor allows government small business contractors to dive into the field without the overwhelming pressure of understanding everything about government subcontractor procurement procedures from day one.
When a large prime contractor wins a government contract award, the contract often includes a subcontracting plan, requiring them to delegate part of the work to small businesses. As a subcontractor, you can focus on specific tasks without the burden of managing the entire contract, giving you the opportunity to gradually learn the ropes and build your past performance history.
Gaining Experience from Industry Leaders: Subcontracting to a large prime contractor offers an invaluable learning experience. Government small business contractors working with industry giants like Lockhead Martin or Booz Allen get to observe and understand how these “big boys” operate firsthand.
This hands-on exposure allows you to learn from seasoned experts in the field, and the knowledge gained can be applied to your own future endeavors. It’s like a free training program where you not only contribute to a larger project but also build a foundation for your own success.
Exploit Your Niche: Do you possess specialized expertise that large prime contractors may not have in-house? Niche contractors offering specialized services, such as data quality assurance or training, can thrive by providing the specific skills and services large projects require.
Large prime contractors often find it more efficient to subcontract for these specialized services rather than building and maintaining such capabilities internally. This opens opportunities for government small business contractors with unique skills to establish themselves as go-to subcontractors in their specialized field.
Financial Considerations: Bidding on and managing a government contract can require substantial resources in terms of time and money. Government small business contractors might find themselves lacking these resources in the early stages. Subcontracting can mitigate your risks without the upfront costs associated with bidding and managing contracts independently. This financial relief enables small businesses to focus on delivering quality services and building a successful subcontracting track record.
Regulatory Considerations: Under the Federal Acquisition Regulations (FAR 19.7), any contractor receiving a federal government contract with a value greater than the simplified acquisition threshold of $250,000, must agree in the contract that certain small business categories will have the ‘maximum practicable opportunity’ to participate in contract performance consistent with its efficient performance.
In addition, for contract awards expected to exceed $750,000 ($1.5 million for construction), larger contractors must submit an acceptable subcontracting plan to include government small business contractors. Also, large prime contractors must establish procedures to ensure timely payments due their government small business subcontractors.
Advantages of Being Certified: Large prime contractors must meet certain quotas of participation with socio-economic disadvantaged small businesses. These certifications can include those on the federal level through the SBA, including the 8(a) Business Development Program, Women-Owned Small Business (WOSB), Veteran-Owned Small Business (VOSB), and HUBZone programs.
State and local level certification programs include Minority Business Enterprise (MBE), Women Business Enterprise (WBE), Minority / Women Business Enterprise (MWBE), Disadvantaged Small Business (DBE), Veteran Business Enterprise (VBE / SDVBE), and Small Business Enterprise (SBE). These certifications are primarily offered in your home local and also benefit your commercial business as many companies have vendor diversity programs you can participate in.
Building Your Past Performance History: Other advantages include building your past performance track record and developing relationships and references. Subcontracting gives you exposure to both program staff and contract staff within agencies and can open the door to many more contracting opportunities.
How to Find Prime Contractors: To find prime contractors it’s important to network and speak with small business specialists and contracting officials at the government agencies that you’re looking to work with. Ask questions about specific contracts and vendors in your industry and then reach out to these vendors directly with your capability statement. You’ll also want to highlight your business with a professionally prepared company website.
Individual research is also important in looking at prior contract awards in your filed. Other areas to find prime contractors are researching vendors already on a GSA Schedule or GWAC (government wide acquisition contracts). These vendors are already preapproved and vetted for government contract awards, which can help you get into opportunities closed for general bidding.
What is a subcontract in government?
The one exception is in the Department of Labor’s regulations implementing EO 11246 which define “subcontract” as follows: Subcontract means any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of the employer and an employee)
What is a subcontracting example?
For example, a building contractor may hire a subcontractor to complete the electrical wiring part of the contractor’s building job. The contractor is responsible to the client for the building job including the part performed by the subcontractor.
What is the purpose of subcontracting?
Key Takeaways. Subcontracting refers to the practice of bringing in an outside company or individual to perform specific parts of a contract or project. In most cases, a company subcontracts another business to perform a task that cannot be handled internally.
Conclusion:
Subcontracting to large primes provides small businesses with a good starting point into the complex realm of government contracting. It allows government small business contractors to learn the ropes at their own pace, gain valuable experience from industry leaders, leverage specialized expertise, and manage financial resources efficiently.
The knowledge acquired as a subcontractor serves as a stepping stone for future contracting opportunities. You want to find the right prime contractor – subcontractor fit for your business. This relationship can help your business grow as a subcontractor, as well as launching into becoming a direct government contractor yourself.
