Entering the federal marketplace as a prime contractor can be challenging for small businesses, especially those without a strong track record of past performance. A strategic approach to gaining the necessary experience is to start as a subcontractor for large prime contractors. This allows small businesses to build their past performance, understand federal contracting processes, and develop relationships within the industry. Below is a step-by-step guide to successfully positioning your business as a subcontractor.
Step 1: Understand the Role of a Subcontractor
A subcontractor provides goods or services to a prime contractor who holds a direct contract with a federal agency. Large prime contractors often need small businesses to meet federal subcontracting requirements, making this an excellent entry point for businesses new to government contracting.
Step 2: Register Your Business Properly
Before pursuing subcontracting opportunities, ensure that your business is properly registered:
Register for a Unique Entity Identifier (UEI) in the System for Award Management (SAM.gov).
Register in the Small Business Administration’s (SBA) Dynamic Small Business Search (DSBS) to increase visibility among prime contractors looking for small business partners.
Certifications & Set-Asides: Determine if your business qualifies for small business set-aside programs, such as 8(a), HUBZone, Woman-Owned Small Business (WOSB), or Service-Disabled Veteran-Owned Small Business (SDVOSB), as prime contractors often seek businesses with these designations to meet subcontracting goals.
Step 3: Identify Potential Prime Contractors
Large prime contractors regularly seek small business partners to fulfill subcontracting requirements. Here’s how to find them:
Visit SAM.gov and search for awarded contracts in your industry to see which companies are winning federal contracts.
Use the SBA’s SubNet to find subcontracting opportunities.
Look at the GSA’s Subcontracting Directory and agency-specific small business offices for a list of large primes that have subcontracting needs.
Attend government contracting events, industry days, and networking meetings to connect with prime contractors and procurement officers.
Step 4: Develop a Strong Capability Statement
A capability statement is a marketing tool that outlines your company’s qualifications and experience. A strong capability statement should include:
Company Overview: Business name, UEI, certifications, and contact details.
Core Competencies: Clearly define what your business specializes in.
Past Performance: If you have prior experience with commercial or local government contracts, highlight it.
Differentiators: What makes your company unique?
NAICS Codes: The industry classification codes relevant to your services.
Step 5: Build Relationships with Prime Contractors
Direct Outreach: Research prime contractors in your industry and introduce your business through emails, calls, and LinkedIn connections.
Attend Matchmaking Events: Many government agencies and industry groups host matchmaking sessions where small businesses can meet large primes.
Utilize APEX Accelerators and the SBA: APEX Accelerators and the Small Business Administration (SBA) offer guidance and help small businesses connect with prime contractors.
Step 6: Respond to Subcontracting Opportunities
Regularly check SubNet, SAM.gov, and agency websites for subcontracting opportunities.
Look for Sources Sought Notices and Requests for Information (RFIs) that indicate upcoming opportunities where prime contractors may be looking for partners.
If a prime contractor posts an opportunity, respond with a tailored proposal highlighting how your company can support their contract.
Step 7: Perform Well & Gather Past Performance
Once you secure a subcontracting role:
Deliver quality work on time and within budget.
Maintain clear and professional communication with the prime contractor.
Request performance reviews or references that can be used for future federal opportunities.
Step 8: Leverage Experience to Bid as a Prime
After gaining subcontracting experience, use your past performance and relationships to bid on small prime contracts:
Start with smaller contracts such as Simplified Acquisition Procedures (SAP) contracts.
Explore set-aside contracts if you qualify for SBA programs.
Register for government-wide acquisition contracts (GWACs) and agency-specific multiple-award contracts.
Conclusion
Becoming a federal prime contractor takes time, but starting as a subcontractor is an effective way to gain experience, develop credibility, and position your business for direct federal contracts. By following these steps, small businesses can build a strong foundation in government contracting and ultimately grow into a successful prime contractor.
