To strengthen their proposals and bids, firms can partner with other companies that have a government contract or are bidding as a prime contractor. Smaller companies often fill niches that round out a prime contractor’s services. The government also gives incentives to firms that subcontract work to small businesses.
Subcontracting can present small businesses with opportunities that might otherwise be unattainable because of limited resources, staffing, capital, or experience. OSDBU works closely with SBA and its Procurement Center Representatives (PCRs) to coordinate policy direction and develop new initiatives on subcontracting issues:
- OSDBU and the SBA PCRs evaluate, review, and make recommendations on subcontracting plans; and
- OSDBU also helps large prime contractors in identifying potential small businesses to assist them in attaining their subcontracting goals.
Details of DOT's Subcontracting Initiatives
Subcontracting allows small and disadvantaged businesses to substantially impact the federal procurement preference programs. Due to legislative mandates, federal prime contractors award billions of subcontracting dollars annually. Any federal contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses), will have the maximum practicable opportunity to participate in the contract consistent with its efficient performance. Furthermore, large prime contractors receiving a federal contract exceeding $700,000 ($1.5 million in the case of construction), and that offer subcontracting opportunities, must establish subcontracting plans with goals that provide opportunities to these small businesses.
More than 50% of DOT subcontracting opportunities are awarded to small business, and prime contractors report their achievements annually and semi-annually using the electronic subcontracting reporting system eSRS.gov.
Prime contractors report into eSRS using Individual Subcontracting Report (ISR) or the Summary Subcontracting Report (SRS). Information on each of these forms can be found by clicking on the links below:
Tips for becoming actively involved in subcontracting
Use The Internet
The Department of Transportation (DOT) Subcontracting Directory is posted on this website here.
You also can research information on prime contractors and subcontracting opportunities through a variety of internet sources:
The Small Business Administration (SBA) Subcontracting Network
The Small Business Administration (SBA) hosts the Subcontracting Network website, Sub-Net, where prime contractors may post subcontracting opportunities. These opportunities are often reserved for small business and may include solicitations or other announcements, including sources sought notices for teaming as partners or subcontractors on future contracts. Sub-Net allows small business to search for opportunities by SIC code, NAICS code, generic description, or solicitation number.
The SBA's Subcontracting Opportunities Directory
SBA also has a Subcontracting Opportunities Directory which lists, by state, primes with a subcontracting plan.
SBA's Commercial Market Representatives (CMRs) counsel small businesses on marketing the commercial sector for subcontracts. You can find contact information on the CMR in your region here.
The System for Award Management
The System for Award Management (SAM) is the primary vendor database for the U.S. Federal Government. The SAM collects, validates, stores and disseminates data in support of agency acquisition missions.
Marketing Your Small Business
The following strategies are intended to assist small businesses in marketing to:
- the government to obtain prime contracts;
- prime contractors for subcontracting opportunities; and
- the commercial sector.
- Develop a network of potential firms that you can call on to work together on DOT opportunities. Meet and speak with other primes and subcontractors to learn from their experiences and evaluate potential teaming opportunities. Seek out prime contractors that may have need for your small business’s expertise, or who have prior experience working with the DOT.
- Initiate a membership with a Chamber of Commerce and trade associations, and attend procurement conferences and seminars, to introduce your business to the representatives of companies that you could potentially partner with.
Get involved in the early stages of procurement and be prepared for projects that are within your area of expertise. Once a procurement possibility has been publicized as full and open competition, seek out any potential for subcontracting opportunities. If a subcontracting plan is required, try to determine who the potential bidders are and contact firms to ascertain their intention to bid. Try to have your small business included in the subcontracting plan when a proposal is submitted to an agency. To increase your chances of obtaining subcontracting opportunities, a subcontracting arrangement can be established with more than one potential bidder for the same requirement.
To protect your proprietary information when entering a subcontracting arrangement, you may choose to establish a Memorandum of Understanding, Non-Disclosure Agreement, and/or signed contractual agreement with the prime.
Stress any federal or state certifications that you may have
Remember, large prime contractors receive credit for working with small businesses that have special certifications.
When two or more firms feel they can come together as a highly competitive team, work creatively to determine who will be the prime, who will be the sub, and how the effort will be divided.
Before committing to a subcontracting opportunity, carefully evaluate how it would benefit your small business. Assess your capabilities, and those of the prime, and consider:
- What do each of you bring to the table?
- What is your cost to enter the arena?
- Will partnering with this firm aid in your success and add to the development of a quality past performance record for you?
Furthermore, know the qualities of a desirable subcontractor. Often, a prime contractor expects to partner with a small business that:
- Will suggest and execute effective solutions.
- Can clearly indicate how it can contribute to the project's overall success.
Researching the prime contractor before soliciting it for a partnership will benefit the small business contractor. Read the company’s profile and mission statement to familiarize yourself with its corporate vision. A successful subcontracting opportunity is advantageous for both the small business and the larger prime.
Pursuant to Public Law 95-507, and subsequent legislative mandates, large prime contractors receiving Federal contract awards valued over $700,000 ($1.5 million for construction) are required to establish plans and goals for subcontracting with small businesses, veteran-owned small businesses, service disabled veteran-owned small businesses, HUBZone small businesses, small disadvantaged businesses and women-owned small business concerns. More information on the government's subcontracting program can be found under the Federal Acquisition Regulations Subpart 19.7