Subcontracting allows small and disadvantaged businesses to substantially impact the federal procurement preference programs. 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
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; evaluate, review, and make recommendations on subcontracting plans; and assist large prime contractors in identifying potential small businesses to assist them in attaining their subcontracting goals.
Tips for becoming actively involved in subcontracting
Small Business Administration's (SBA) Subcontracting Network and Subcontracting Opportunities Directory
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. SBA also has a Subcontracting Opportunities Directory which lists, by state, primes with a subcontracting plan.
Marketing Your Small Business
The following strategies are intended to assist small businesses in marketing to the government to obtain prime contracts and subcontracting opportunities.
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. Additionally, you should 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.
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.