Doing business with the federal government as a subcontractor
The federal government spends billions of dollars on contracts each year, making it the largest buyer of goods and services in the country. Working with the government as a supplier or contractor is a huge opportunity for small businesses, especially since federal agencies are mandated to contract at least 23% to small business owners.
However, most small business owners likely struggle to understand how to break into government contracting. Even after you have filled out the forms to be certified as a small, woman-owned or minority-owned business, you can’t just sit back and wait for contracts to come your way. Like all new clients, it takes time, energy, a good strategy and strong relationships to get a contract with the government. That’s where subcontracting comes in.
A company that holds a contract directly with the government is called the prime contractor. Subcontracting is when a piece of the contract is handed from the prime contractor to another company for completion, making them a subcontractor. For large contracts, there can be sub-subcontractors and even sub-sub-subcontractors!
Like federal agencies, primes are held accountable for meeting any small business goals associated with the contract. This means that the primes will look for small, women, minority, veteran and HUB Zone businesses that can do the work. Your job is to make sure you’re found.
Luckily, information on how to get involved with contracting is all public. You can get started by looking at the Small Business Administration’s (SBA) resource SubNet, a database of subcontracting opportunities posted by large contractors looking for small businesses. The SBA also maintains a directory of federal government prime contractors with subcontracting plans and the U.S. Department of Defense (DoD) has a directory of large prime contractors that small businesses can use to find subcontracting opportunities.
You should also find your NAICS code—the number that correlates to your product or service—and see which company is getting contracts in those codes. Then, reach out to them and start building a relationship.
Need help? Visit your local Procurement Training Assistance Program (PTAP)! PTAP is a network of federally-funded centers that provide seminars and one-on-one assistance to help you on your government contracting journey.
A key component of becoming a prime government contractor is building your “past performance,” or your history of similar work that proves to the government that you can do the requested work. Subcontracting is a great way to build up your past performance and grow into a prime contractor.