Subcontracting Program

As a small business, subcontracting can open a world of possibilities! Subcontracting can present small businesses with opportunities that might otherwise be unattainable because of limited resources, staffing, capital, experience, etc.. It also allows small businesses to get their foot in the door by bidding on, and participating in, contracts that they cannot competitively pursue on their own.

Subcontracting has been determined to be an area where small and disadvantaged businesses can substantially impact the Federal procurement preference programs. Federal prime contractors award billions of subcontracting dollars annually. Legislative mandates place great emphasis on this program area. 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 it's efficient performance. Furthermore, large prime contractors receiving a Federal contract exceeding $500,000 ($1 million in the case of construction), and which offers subcontracting opportunities, must establish subcontracting plans with goals that provide maximum opportunities to these small businesses.

There are several steps you can take to become more actively involved in subcontracting.

Use the Internet

The U.S. Department of the Interior (DOI) Subcontracting Directory is posted on the OSDBU web site at: http://www.doi.gov/osdbu/primes.pdf You also can research information on prime contractors and subcontracting opportunities through a variety of other sources on the Internet.

The Small Business Administration (SBA) has a Subcontracting Network web site called Sub-Net located at http://web.sba.gov/subnet/ that is used by prime contractors to post subcontracting opportunities. These opportunities are often reserved for small business and they may include either solicitations or other notices - for example, notices of sources sought for teaming partners and subcontractors on future contracts. The site is designed primarily as a place for large businesses to post solicitations and notices. On Sub-Net you can search for opportunities by SIC code, NAICS code, generic description or solicitation number.

SBA also has a Subcontracting Opportunities Directory located at http://www.sba.gov/services/contracting opportunities/basics/subcontracting/index.html which lists, by state, primes with a subcontracting plan.

Register in the Central Contractor Registration (CCR)
Prime contractors as well as contracting officers use the Central Contractor Registration (CCR), located at http://www.ccr.gov to find potential small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned). Be sure that you are registered in ccr.gov to provide yourself with greater visibility. It is very important that you update your information at least every 18 months, because most searches of the PRO-Net database automatically screen out any businesses that have not updated their information within that time period.

Marketing Prime Contractors
An effective multi-faceted marketing plan for small businesses involves a strategy to market to the government for prime contracts, to prime contractors for subcontracting, and in the commercial sector. The following are "tips" to market for subcontracts:

Network

It is important to meet and speak with other primes and subcontractors to learn from their experiences and evaluate potential teaming opportunities. Develop a network of potential firms that you can call on to work together on DOT opportunities.
For example, if you are an IT firm that has expertise in security issues and a prime is bidding on a network opportunity that has some critical security issues, you want to develop a relationship where you can come together to bid as a highly competitive team. Or, if you don't have any DOT experience, you might want to get to know firms that have contacts within DOT and expertise on transportation issues.
Active membership in a Chamber of Commerce and trade associations, as well as attendance at procurement conferences and seminars, will help you meet representatives of companies that might be a good match for you, or help you meet people who might refer you to another firm that is a good match for you.

Get involved in the early stages of a procurement

Keep your "eyes open" for procurements that are within your area of expertise. Once one of these procurements has been publicized as full and open competition, determine whether there is a potential for subcontracting opportunities. If a subcontracting plan is required, try to determine who the potential bidders are. Contact the firm(s) to see if they are planning to bid on the procurement and ask if a subcontracting arrangement can be formed. You want to get your name 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.

Protect Yourself

In some situations, when entering into subcontracting discussions, it can be important to protect your proprietary information. You might want to establish either a Memorandum of Understanding, Non-Disclosure Agreement and/or a signed contractual agreement with the prime. It is important to protect yourself and check the past performance, references, and certifications of a potential partner before you enter into a legal agreement with them.

Stress any Federal or state certifications that you may have

As described at the beginning of this article, large prime contractors receiving a Federal contract exceeding $500,000 ($1 million in the case of construction), and which offers subcontracting opportunities for small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses) must establish contracting plans that provide maximum opportunities to these small businesses. They get credit for working with you if you have special certifications.

Be creative!

When two or more firms feel they can come together as a highly competitive team, there are times when you can work creatively to determine who will be the prime, who will be the sub, and how the effort will be divided.

Final Considerations
Once you discover a subcontracting opportunity, it is important to carefully evaluate whether it is an opportunity that you would benefit from. Assess your capabilities. Assess the capabilities of the prime. What do you 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? These are all questions that must be asked when determining whether or not to pursue a professional relationship with any firm.

Also, keep in mind what a prime is expecting from a subcontractor. They want someone who will bring solutions to the table. As a subcontractor you must emphasize what you can do to assist the prime in accomplishing the requirements of the contract and how you can contribute to the prime's overall success. Do some research on the prime to qualify them as a potential marketing prospect. Read their mission statement. Ask yourself, "Can I share this firm's corporate vision?" If you find yourself answering "yes" to this, you must be willing to take that vision and make it your own for the life of the contract while working with the prime contractor towards a common goal.