If you’re serious about scaling your business and growing your revenue through federal contracting, then you CANNOT overlook subcontracting.
In fact, landing a subcontracting opportunity just might be the way you break into this sector.
So if you’re:
- Thinking about getting into federal contracting.
- Trying to win your first federal contract.
- Already well-established and looking to make even more money.
Then this is the guide for you.
In this blog post we’ll go over:
- How subcontracting can get your foot in Uncle Sam’s door.
- The best approach and strategies for subcontracting.
- All of the benefits that come with subcontracting.
Let’s get right to it.
The Past Performance Paradox
It’s a conundrum that everyone trying to get into federal contracting faces. Pretty much, it goes as follows:
“To win a federal contract I need past performance, to get past performance I need to win a federal contract.”
So where do you even begin!?
Well, it’s quite possible to win your first federal contract without past performance. However, on average it takes around 18 to 24 months for most registered vendors to win their first federal contract.
It’s just that having a past performance rating can potentially reduce the time it takes to win your first prime contract.
“Alright, but I need to WIN A CONTRACT to get past performance.”
Subcontracting on a federal job can actually earn you a past performance rating.
“(A) Establishment.–The Administrator shall establish a pilot program for a small business concern without a past performance rating as a prime contractor performing as a first tier subcontractor for a covered contract (as defined in paragraph 13(A)) to request a past performance rating in the system used by the Federal Government to monitor or record contractor past performance.”
Basically, if you’re not familiar with “governese,” this paragraph means that small businesses working as a first tier subcontractor can request a past performance rating.
“What’s a first tier subcontractor?”
Basically, it’s a subcontractor directly hired by a prime contractor. If a first tier subcontractor were to hire out another subcontractor, that subcontractor would be the second tier subcontractor.
You get the point.
Pretty much, having a past performance rating boosts your chances of winning a federal contract.
You can gain past performance as a first tier subcontractor.
Therefore, subcontracting can potentially be your shortcut to winning your first prime contract.
Your Approach to Subcontracting
Just with federal contracting, you’re going to need a plan of attack to become successful at subcontracting. It’s going to consist of getting registered in the System for Award Management (SAM) and networking.
Here’s how you should go about it and why.
Register in SAM (and other gov’t certifications)
To work as a subcontractor on a federal job, you don’t need to be registered in SAM.
“So…why are you saying to register in SAM?”
Well, for starters, if you do want to become a prime you might as well just get it out of the way. Also, if you’re not an expert in handling gov’t paperwork, this could be a timely process. Errors in your SAM registration can cause you serious delays or even fines.
This is why so many large and small businesses just opt to have a third party firm like US Federal Contractor Registration take care of it. Get it done quickly and efficiently, free of any worries.
Why else would registering in SAM help you as a subcontractor?
As a small business, it will get you logged into the Dynamic Small Business Search (DSBS). DSBS is a search portal used by Contracting Officers looking for vendors to help fulfill their small business quotas as well as Prime Contractors looking for subs.
Believe it or not, some prime contracts require the vendor to sub out work to small businesses. Getting registered in SAM and being in DSBS makes you more visible to primes and more appealing as a sub since it makes the prime’s job of reporting their small business requirements A LOT easier.
That incentive increases when you get more specialized certifications such as the:
- Women-Owned Small Business (WOSB)
- Service Disabled Veteran Owned Small Business (SDVOSB)
- 8(a) Program
- Historically Underutilized Business Zone (HUBZone)
Also, if you are a veteran (without a service disability) you can at least certify for VetBiz which although is not a set-aside, it’s still an outlet to broadcast your business to prime contractors.
Again, all of these certifications can be taken off your desk by a third-party firm.
Basically, you get registered in SAM because:
- You’re going to have to do it anyway.
- It can get you into search portals used by primes.
- Set-asides can increase the incentive to hire you as a subcontractor.
Networking, Networking, and Networking
The key to subcontracting is to have a strong network. Being registered in SAM, having a set-aside certification, and having a capabilities narrative on DSBS can only go so far.
You need to take the initiative to build relationships with primes.
Here are some routes to go about that.
The Small Buisness Administration’s (SBA) SubContracting Network (SubNet) is designed to help connect primes with subs. You can search each state or territory by either solicitation, notices for sources sought, or just through a buisness directory. SubNet is a great resource to point you in the right direction.
Join Your Local Chamber of Commerce
This organization’s sole goal is to forward the interests of buisnesses in your area. They wouldn’t be doing their job if they didn’t have any events or opportunities for networking. Attend them and see what contacts you make.
Attend Trade Shows
Trade shows are great for meeting other businesses in your industry. There are always conferences going on for federal procurement. You might even want to set up your own booth.
Make Use of Social Media
Unless you’ve been living under a rock, then you realize everyone is on social media these days. Get on LinkedIn to find primes who you think would work with your business. Also, for Facebook, US Federal Contractor Registration offers their exclusive MasterMinds group from webinars and networking.
The Benefits of Subcontracting
We’ve already established that subcontracting is a shortcut toward getting your first federal contract. What are the other benefits of it?
Less Time Dealing with Gov’t and Administrative Work
Congratulations! You’ve just gone around one of the biggest deterrents to federal contracting. Now some people are going to tell you that as a subcontractor, you won’t have to deal with the government and all of those bureaucratic processes.
You’ll just have to deal with less of it. Plus, all of the heavy lifting for winning and bidding on this contract has been handled. As a subcontractor, you have to worry less about the administrative work and focus more on your obligations.
Getting Valuable Insight
Knowledge is one of the main paths to success in federal contracting. What better way is there to learn about this sector than from an experienced prime? Now more than ever is the time to jot down notes and figure out what worked for your prime.
Seriously. So what if you’re not the prime? Money is money. Does it really matter if you’re the business that actually won the contract? In fact, there are many instances in which the subcontractor has actually made more than the prime contractor.
Have a question? Ask away!
My name is Hayden Johnson and I’m a copywriter at US Federal Contractor Registration. Since 2010, USFCR has been helping businesses of all industries and sizes succeed in federal contracting. From registrations to training, we offer our clients a wide range of services to give them a competitive edge.
Please send any questions you have about subcontracting or just federal contracting in general to firstname.lastname@example.org.
- Blog title in the subject line.
- Your name and what you do (for the best possible answer).
- YOUR QUESTION!
Thanks, and happy subcontracting!