Did You Know?… Subcontracting Expands your Government Sales

Subcontracting opportunities can be a lucrative avenue in the government sector, which allows businesses to participate in government contracting without dealing directly with the government.

Why subcontracting? The federal contracts that are awarded to prime contractors often come with subcontracting plans containing goals for doing a percentage of the work with small businesses.

Written by Julie Fagle
CIRAS Government Contracting Specialist

Who holds a subcontracting plan? Large businesses with prime contracts exceeding $700,000 (except for construction, which is $1.5 million).

How does it work? A subcontracting plan is a plan that is built into the contract and holds the prime contractor accountable to drive business and allocate dollars back into the small business community. Within that contract, the contractor and the government define the percentage of dollars to be spent on preference programs in a particular small business category – such as women-owned, disadvantaged, and service-disabled, veteran-owned small businesses.

Where do you identify prime contractors that hold a subcontracting plans?  It varies from agency to agency; however, many agencies have subcontracting directories posted on the small business pages of their websites.

What are the benefits of being a subcontractor? Past performance experience is not required, unlike doing business directly. Subcontracting allows your business to acquire experience and build your past performance portfolio in the government sector.  It’s also a great learning opportunity to work with the primes, which could potentially lead into other synergies amongst the two organizations, such as a mentor-protégé relationship, partnership, joint venture, or teaming agreement.

Where would I fit in the subcontractor contracting process?  Think about how your product or service is used in the commercial sector. Now, explore where there are parallels in the government sector; air fighter (airplane cockpit; components, navigation system, radios, etc.), Cedar Rapids floodwall projects (civil services, concrete, surveying, etc.), or an education development project (curriculum, printed materials, videos). Take a look at the big picture, and think about what agency would procure that type of good or service.

Next Step:  Market Research.  There are multiple avenues to identify opportunities and research your market, including many search engines.  There’s no need to pay for subscriptions, as many of the search engines that are relevant to identifying prime contractors are accessible at no cost. Prior to beginning market research, identify the applicable NAICS code specific to your target market.

Then, Start Networking.   Attend networking events to connect with prime contractors.  Participate in local and national events, dependent on your target demographic area.  Industry specific organizations also are a great avenue to build your network. These types of events can be found in various places such as FedBizOpps or agency websites.  CIRAS hosts many events throughout the year which provide businesses with opportunities to meet prime contractors and agencies.

Last but not least, utilize the CIRAS PTAC specialist in your area for assistance, as there are many search engines and resources we can recommend you use on your subcontracting journey!


For more information, contact Julie Fagle at jafagle@iastate.edu or 319-310-8612.