Federal Subcontracting Guide 2025: How to Win Government Subcontracts
Complete guide to federal subcontracting opportunities. Learn how prime contractors find small business subs, subcontracting plan requirements, and strategies to win subcontracts on major government projects.
Quick Answer: Why Federal Subcontracting?
Federal subcontracting lets small businesses work on major government contracts without competing directly for prime contracts. Large prime contractors are required to subcontract portions of contracts over $750,000 ($1.5M for construction) to small businesses. The federal government has a 23% small business subcontracting goal, creating billions in opportunities annually.
Why Pursue Federal Subcontracting?
Subcontracting is often the best entry point into government work, especially for newer businesses without extensive past performance. Here is why:
Build Past Performance
Subcontracting work counts toward past performance, the single most important evaluation factor for future prime contracts. Start building your track record now.
Lower Barriers to Entry
No need to compete for massive contracts directly. Prime contractors handle the proposal, bonding, and contract administration. You focus on delivery.
Learn the Process
Working alongside experienced primes teaches you government contracting requirements, compliance processes, and agency expectations before you go it alone.
Consistent Revenue
Multi-year prime contracts mean stable subcontracting work. Once you are on a winning team, you may have years of guaranteed work.
Subcontracting Path to Prime
Federal Subcontracting Requirements
The federal government mandates small business subcontracting on larger contracts:
Subcontracting Plan Thresholds
Services and Supplies
Contracts over $750,000 require a small business subcontracting plan from large prime contractors.
Construction
Construction contracts over $1,500,000 require a small business subcontracting plan.
Required Small Business Categories
Subcontracting plans must include goals for these categories:
Small Business (SB)
All qualifying small businesses
SDB
Small Disadvantaged Business
WOSB
Women-Owned Small Business
HUBZone
HUBZone Small Business
SDVOSB
Service-Disabled Veteran-Owned
VOSB
Veteran-Owned Small Business
Why This Matters to You
Prime contractors MUST find small business subcontractors to meet their plan goals. If they fail to meet subcontracting goals, they can face reduced payments, negative past performance ratings, or even contract termination. This creates real demand for your services.
Finding Subcontracting Opportunities
1. SubNet (SBA)
The SBA maintains SubNet at eweb.sba.gov/subnet, where prime contractors post subcontracting opportunities for small businesses.
✓ Free • Official SBA resource • Verified opportunities
2. Prime Contractor Websites
Major government contractors maintain supplier diversity portals. Register with companies like Lockheed Martin, Boeing, Raytheon, General Dynamics, and others.
Most require online registration in their vendor systems.
3. Agency Small Business Offices
Every federal agency has an Office of Small and Disadvantaged Business Utilization (OSDBU). They can connect you with prime contractors working on agency contracts.
Find your target agency OSDBU at sba.gov/osdbu
4. Procurement Conferences
Matchmaking events connect small businesses directly with prime contractors. Events include agency-specific conferences, industry days, and SBA events.
Check agency event calendars and govevents.com
5. Monitor Prime Contract Awards
Use BidFinds to track when prime contracts are awarded. Reach out to winners immediately to offer subcontracting services before they finalize their teams.
✓ BidFinds tracks awards across 50+ portals with AI matching
How to Approach Prime Contractors
Prime contractors receive hundreds of subcontracting requests. Stand out with a professional approach:
Create a Capability Statement
Your capability statement is your one-page resume. Include:
- • Core competencies (what you do best)
- • NAICS codes and certifications (8(a), HUBZone, SDVOSB, etc.)
- • Past performance examples with metrics
- • Contract vehicles you are on (GSA Schedule, etc.)
- • UEI/CAGE code and contact information
- • Differentiators (why choose you?)
Target the Right Contact
Find the small business liaison or supplier diversity manager, not general procurement. LinkedIn is valuable for finding the right person.
- • Small Business Liaison Officer (SBLO)
- • Supplier Diversity Manager
- • Subcontracts Manager
- • Program Manager (for specific opportunities)
Be Specific About Value
Do not just say you want to be a subcontractor. Explain specifically how you can help:
- • What portion of the work can you perform?
- • What certifications do you bring? (helps their goals)
- • What is your relevant past performance?
- • How will you reduce their risk?
Timing is Critical
The best time to approach primes is during proposal development, BEFORE they win. Once they have won and finalized their team, it is much harder to get added. Monitor upcoming solicitations and approach primes early.
Teaming Arrangements
There are several ways to structure a subcontracting relationship:
Teaming Agreement
An agreement to work together on a specific opportunity. Prime and sub agree on roles, work share, and terms before the proposal is submitted.
✓ Common • Flexible • Project-specific
Subcontract Agreement
Formal contract between prime and sub after award. Details specific deliverables, payment terms, flow-down clauses, and performance requirements.
✓ Legally binding • Post-award • Detailed terms
Joint Venture
A new legal entity formed by two or more companies. Often used when small business wants to compete as prime but needs larger partner capabilities.
⚠ Complex • Requires legal setup • SBA rules apply
Contractor Team Arrangement (CTA)
Two or more companies agree to work together on contracts awarded under a contract vehicle like GSA Schedule. Each maintains separate contracts.
✓ Multiple award vehicles • Maintains independence
Mentor-Protege Programs
Mentor-Protege programs provide structured relationships between large and small businesses:
SBA All Small Mentor-Protege Program
The SBA program allows any small business to partner with a mentor (large or small). Benefits include:
- ✓Joint ventures can compete as small business
- ✓Technical and management assistance from mentor
- ✓Access to mentor facilities, equipment, and expertise
- ✓Loans or equity investments from mentor
Agency-Specific Programs
Many agencies run their own mentor-protege programs with additional benefits:
DoD Mentor-Protege
Reimbursement for mentor costs; credit toward subcontracting goals
NASA Mentor-Protege
Focus on R&D and technology transfer
DHS Mentor-Protege
Homeland security focus; developmental assistance
VA Mentor-Protege
Veteran-owned business focus
Frequently Asked Questions
Do I need experience to be a subcontractor?
Not always. Many primes will give small businesses their first government experience. Having commercial experience in your field helps significantly.
What percentage of work goes to subcontractors?
It varies by contract. Small business subcontracting goals typically range from 20-50% of subcontractable work. Construction often has higher percentages.
When do subcontractors get paid?
Payment terms are in your subcontract agreement. Typical terms are Net 30 after the prime receives payment from the government. The Prompt Payment Act requires primes to pay within 30 days.
Does subcontracting build past performance?
Yes. Subcontracting work can be cited as past performance on future proposals. Get letters of recommendation and CPARS-like evaluations from your primes.
Do certifications help with subcontracting?
Absolutely. Certifications like 8(a), SDVOSB, HUBZone, and WOSB make you more valuable because you help primes meet their subcontracting plan goals.
Find Prime Contract Awards to Target
BidFinds tracks contract awards across 50+ government portals. Get notified when prime contracts are awarded in your industry so you can approach winners early.
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