January 2024: Subcontracting? Absolutely!
Prime Contractor: Organization, generally a business, that holds the contract and works directly with the government.
Subcontractor: An organization, typically a business, which holds a contract with another contractor. This group does not work directly with the government.
There are many reasons to be a subcontractor:
- Gain experience as a business new to government contracting, new to an industry, or new skills to prove you can complete the work on time, on budget, and meet all requirements
- Subcontracts can be in the millions of dollars
- There can be fewer requirements and less management
- Expands opportunities to small businesses because large prime contracts require a small business plan – meaning, a prime contractor must seek out small businesses to subcontract with, giving more opportunities for small businesses
- A specialty or niche trade or skill that prime contractors need to complete their projects
- There can be less administrative and business development costs
- “Fill-in” work during slower times
- Reduce risks and responsibility
- Stable work
As a subcontractor, you also need to understand challenges.
- Deadlines may be very tight
- Lack of understanding of the flow-down requirements
- Non-compete clauses
- Proprietary Rights work may go to the prime contractors
- Poor communication
The U.S. Small Business Administration (SBA) offers compliance reviews, subcontracting reports, rules & regulations, plus training and education. To find subcontract opportunities, the Department of Defense’s Office of Small Business Programs offers a list of its top eight prime contractors. Each prime contractor has their own requirements for being a subcontractor. Levelset offers several ways to search for subcontract opportunities, while SBA offers SubNet, a place for prime contracts to list their open subcontract opportunities. Select a state to review the opportunities. In addition, large prime contractors typically offer information on doing business with them; one example is Northrop Grumman.
If you are unsure where to start or how to get organized, connect with the North Dakota APEX Accelerator program. Our services are offered at no cost to businesses based in North Dakota. Register to schedule an appointment. Additionally, take advantage of the many other training opportunities and events on the ND APEX website.
Not from North Dakota? Find your closest APEX by selecting your state from the map on the APTAC website.