Government Subcontracting Guide — How to Become a Subcontractor
Subcontracting is the most common entry point into government contracting. Instead of competing for contracts directly, you partner with an established prime contractor who has already won the work. You deliver a portion of the scope, build past performance, and learn the business without the overhead of managing the government relationship.
This guide covers why subcontracting works, how to find primes, the difference between teaming and subcontracting, and how small business goals create opportunities.
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Why Subcontracting Is the Best Entry Point
Lower barrier to entry
You do not need to navigate the full proposal process, manage a government contract, or handle complex compliance requirements. The prime manages the contract relationship while you focus on delivering your scope of work.
Build past performance
Past performance is the biggest catch-22 in government contracting: you need it to win, but you need to win to get it. Subcontracting lets you build a performance track record that you can reference when you eventually bid as a prime.
Learn the business
Working as a subcontractor exposes you to government processes, contract administration, invoicing, reporting, and compliance requirements. You learn from the prime's experience without bearing the full risk.
Steady revenue stream
Government prime contracts often run 3-5 years with option periods. As a subcontractor, you can establish a stable, recurring revenue base while building toward prime contracting opportunities.
Access to large contracts
Many of the largest government contracts are out of reach for small businesses competing alone. Subcontracting lets you participate in billion-dollar programs by providing your niche expertise as part of a larger team.
Relationship building
Working alongside a prime contractor builds relationships that lead to future opportunities. Primes who trust your work will bring you onto other bids. Government customers who see your performance will remember you.
Subcontracting Plans: Large Business Requirements
Under FAR 19.702, large businesses that receive federal contracts exceeding $750,000 ($1.5 million for construction) must submit a subcontracting plan that establishes goals for subcontracting with small businesses. This is your opportunity.
Subcontracting plans must include specific dollar and percentage goals for each small business category:
Large primes are required to report their subcontracting achievements in the electronic Subcontracting Reporting System (eSRS). They are graded on meeting their goals. This creates real incentives for primes to seek out qualified small business subcontractors — including you.
The SBA sets government-wide goals for small business subcontracting. The current overall goal is 23% of all contract dollars going to small businesses. Individual agencies often set higher targets.
How to Find Prime Contractors
USAspending.gov and FPDS
Search for contracts awarded in your NAICS codes and capability areas. Look at who is winning the work you want to support. USAspending shows prime award recipients, contract values, and agencies. This tells you exactly who to approach.
SBA Dynamic Small Business Search
The SBA's search tool (now part of SAM.gov) lets you find businesses by NAICS code, location, and certification. While primarily a small business directory, it helps identify potential teaming partners and mentor-protege candidates.
Industry days and pre-solicitation conferences
When agencies announce upcoming procurements, they often hold industry days where primes and potential subs can meet. Check SAM.gov for notices and attend every relevant event. Bring your capability statement and be ready to talk about what you bring to a team.
SBA matchmaking events
The SBA hosts matchmaking events where small businesses meet large primes. Events like National Small Business Week and regional procurement conferences are specifically designed to facilitate subcontracting relationships.
Prime contractor websites
Most large defense and IT contractors have "small business" or "supplier diversity" pages on their websites with instructions for registering as a potential subcontractor. Lockheed Martin, Raytheon, Booz Allen, SAIC, Leidos, and others maintain supplier portals.
Procurement Technical Assistance Centers (PTACs)
PTACs provide free counseling and match small businesses with prime contractors. There are nearly 300 PTACs across the country. Your local PTAC knows which primes are active in your area and can make introductions.
Teaming vs Subcontracting vs Joint Venture
These three partnership structures serve different purposes and carry different levels of commitment and risk.
Subcontracting
Teaming Agreement
Joint Venture
Small Business Subcontracting Goals
The federal government sets annual targets for the percentage of contract dollars that should flow to small businesses. These goals create structural demand for small business subcontractors.
| Category | Government-Wide Goal |
|---|---|
| Small Business (overall) | 23% |
| Small Disadvantaged Business (SDB) | 5% |
| Women-Owned Small Business (WOSB) | 5% |
| HUBZone Small Business | 3% |
| Service-Disabled VOSB (SDVOSB) | 3% |
These goals apply to both prime contracts and subcontracts. If you hold any of these certifications, you are especially valuable to large primes who need to meet their subcontracting plan goals. Highlight your certifications prominently in your capability statement and marketing materials.
The SBA Scorecard rates each agency on its small business goal achievement. Agencies that fall short face scrutiny, which increases their motivation to work with primes who have strong small business subcontracting records.
Find Subcontracting Opportunities on Bureauify
Search for active contracts by NAICS code, agency, and set-aside type. Identify prime contractors winning work in your capability areas and find opportunities to join their teams.