Get Your Start by Subcontracting | Episode 34

Why would a business want to subcontract under a prime contractor for the federal government? It can open the door to many more contracting opportunities allowing you to build a past performance track record and help you create relationships within the federal government.

In this episode we discuss starting in federal contracting by subcontracting. This is a good way to open the door to more opportunities and build experience within the contracting marketplace.

First, it's a great way to increase revenue. Secondly, if you're new to the business of government contracting, it's a good way to get your feet wet and gain  important contracting experience. It's also a way to get into a targeted government agency.

There are many ways to find vendors that have contracts, especially multiple contracts within a particular agency. A database such as the Market Intel provides you information on who buys what you sell, as well as who they bought from previously.

By subcontracting, it allows companies that cannot otherwise bid on contracts the opportunity to be able to participate in these awards. This can take place if the contract size or certain other requirements for the contract as placed by the government.

The primary advantage of subcontracting is it can open the door to many more opportunities. Say for example, you're a small business, and you could never bid a large multi-million dollar contract on your own. Well subcontracting to a company that can meet those requirements would at least allow for you to take home part of the award revenue.

There are also set-aside contracts that the government issues for certain socio-economic conditions. For example, these set-aside requirements may be for businesses that are veteran-owned, woman-owned, minority-owned, HUBZone, or 8(a) disadvantaged to bid on contracts. So, if you've come across a situation where there's a set aside, and you don't qualify or you're not certified under that particular set aside, finding a prime that does qualify would certainly be a way for you to get involved in that contract. Conversely, prime contractors are always looking for set-aside qualified small businesses to participate as subcontractors in their contracts as may be required by federal guidelines under large contracts.

To find prime contractors it’s important to network and speak with contracting and small business liaison officials at the government agencies that you're looking to work with. Ask questions about specific contracts and vendors in your industry and then reach out to these vendors directly with your Capability Statement to discuss how you can help them better fulfill their contracts.

When subcontracting, it’s important that you find the right fit. By right fit, you want to work with a prime contractor that has similar goals and values as you. Think of it as a partnership. 

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Transcript

Get Your Start by Subcontracting | FedBiz’5 – Episode 34

Jesse Sherr  00:02

My name is Jesse, and I work with small businesses in the government marketplace. 

Jesse Sherr  00:06

You're listening to FedBiz'5, where you get informed, get connected, and get results on everything government contracting. 

Jesse Sherr  00:17

Hello, and welcome to another episode of FedBiz'5. We have the Senior Contracting Specialist, Frank Krebs, again today. He's here to talk about subcontracting in the government marketplace. How's it going, Frank?

Frank Krebs  00:30

Hi, it's going good, Jesse. How are things with you? 

Jesse Sherr  00:33

Very good, thankyou. 

Jesse Sherr  00:34

I'm just going to go ahead and jump right in. Why would a business want to subcontract under a prime contractor in the federal government? 

Frank Krebs  00:40

Well Jessie, there are many very good reasons that one might want to subcontract on government contracts. First, and maybe foremost, it's a great way to increase corporate revenue. Second, if you're new to the business of government contracting, it's a good way to get your feet wet and gain some important government contracting experience. It's also a fantastic way to get into a government agency. One that you've been targeting, maybe. 

Frank Krebs  01:12

There are many ways to find vendors that have contracts, especially multiple contracts within a particular agency. And so, when you do find one with multiple awards, they are most likely very well liked and very well respected in that agency and would make a perfect teaming partner. 

Frank Krebs  01:31

Also, when subcontracting, it allows companies that cannot otherwise bid on contracts the opportunity to be able to bid on these contracts. Now, this can take place either because of their size or maybe certain requirements for the contract as placed by the government. But still, at this point, if you do find someone to team with it gives you a chance to grab a piece of the contract.

Jesse Sherr  01:59

Excellent. So, my next question would be, what are the advantages of being a subcontractor?

Frank Krebs  02:04

Basically Jesse, it opens the door to many more contracting opportunities. Now, these could be opportunities on large contracts. Say for example, you're a small business, and you could never bid a large multi million dollar contract on your own. Well, teaming with a company that can meet those requirements would at least allow for you to take home part of the revenue associated with that contract. 

Frank Krebs  02:33

Now, there's also many set aside contracts that the government places out there. For example, they may require companies to be a veteran-owned business, or a woman-owned business to bid on the contract. So, if you've come across a situation where there's a set aside, and you don't qualify, or you're not certified under that particular set aside. Finding a prime that does qualify would certainly be a way for you to get involved in that contract and get in front of that government agency. 

Frank Krebs  03:07

So again, other advantages are you get to build your past performances and your references. You get exposure in many of these cases to both program staff and contract staff within agencies. This allows you to begin building relationships with those folks in those particular agencies. And quite honestly, if you select a good prime, you can learn quite a bit from that particular vendor about government contracting,

Jesse Sherr  03:38

Definite advantages you get with subcontracting in the government marketplace. So, one more question for you. How would a business go about finding a prime contractor?

Frank Krebs  03:50

Well Jesse, there's many ways in which you can find prime contractors. One way, and maybe the most effective way, is to speak with people at the government agency that you're looking to get in with. If you're talking to folks and they say that we contract with Vendor X for those types of services, and I know we've had five or six different contracts with that vendor. Well, now you know that they've got multiple contracts within that agency. 

Frank Krebs  04:20

So, what you want to do is to reach out to that agency and look to see if it's something where it would be beneficial to both of you to participate on their team. Also, you always want to make sure that you get the right fit. And by right fit, what I mean is you want to work under a prime that has very similar goals and values that you have. Otherwise, you're going to run into situations along the way where you're going to be competing with each other, and it's just not going to be that advantageous. 

Frank Krebs  04:52

Another potential for looking for prime is to look for prime's that have certain, or holders if you will, of certain types of contracts. For example, if they're on a GWAC, a government wide acquisition contract, you may want to join their team because this again opens up many areas that you otherwise would not be able to participate in. 

Frank Krebs  05:13

Another opportunity is on GSA Schedule awards, it may be that they need some help in filling their GSA schedules, and this will be something that you'd be able to assist with.

Jesse Sherr  05:23

Well, some good advice, too. Yes, and it's very important to do the research to make sure you have that fit, right? Otherwise, it could fall apart. Before we go, is there any other advice you would like to give?

Frank Krebs  05:35

Well, research companies that work in an agency that you want to be involved in, or that work in agencies that you're already have a relationship with folks in. And do your research on that company? You do, like I say, want to make sure that you're a good fit with that firm?

Jesse Sherr  05:50

Excellent. Well Frank, thank you again. I appreciate it, and I'm sure our listeners do as well. We'll catch you next time.

Frank Krebs  05:57

You got it Jesse, and you have a great day now.

Jesse Sherr  05:58

You too, take care. Bye-bye. 

Jesse Sherr  06:01

This concludes this week's episode of FedBiz'5, where you get informed, get connected, and get results. 

Jesse Sherr  06:12

Today's podcast is sponsored by FedBiz Access, government contracting made simple.

Jesse Sherr  06:17

Visit them at FedBizAccess.com or contact them at 888-299-4498