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4 Perks of Being a Subcontractor

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4 Perks of Being a Subcontractor

By kmurray, Contributor and Moderator
Published: May 28, 2014 Updated: May 28, 2014

If you’re interested in adding the government to your list of clients – but want to get your feet wet first – consider subcontracting. As a subcontractor, you can perform part of the work on another business’ contract (of the ‘prime’ contractor) without dealing directly with the government. Here’s a look at some of the perks.

  1. Fewer administrative obligations

In general as a subcontractor, you won’t have to deal with the government directly – that’ll be up to the prime contractor, who interfaces with contracting officer within a particular agency. The administrative responsibility you’ll bear rests in the agreement or contract between you and the prime contractor.

  1. Lower business development costs

Another big benefit of subcontracting is the lowered cost of doing business development (BD). Someone else is taking care of capture management – identifying and assessing potential opportunities with the government and outlining the approach to go after them. There’s also costs offset for proposal development, marketing, etc. by working with a prime.

  1. Getting more work

If you offer a specialized service that can be applied broadly as a small piece of another larger project, it’s a great way to gain experience and work that you wouldn’t be able to get otherwise. Many government contracts have various needs and required skills, so you can benefit by potentially earning more work across a range of contracts that need your specific service (e.g, marketing an online tool built by a large prime IT company).

  1. Gaining past performance

Working with partners – the prime contractors – will allow you to gain past performance that you might not be able to gain elsewhere because they've already developed relationships. Building up your past performance is like a track record to use when you go after future work. The longer a positive record, the better chance you’ll have at winning work.

This is just a handful of benefits to being a subcontractor. Ready for the next step? Read Selling to the Government: Five Tips for Becoming a Subcontractor and Getting Your Foot in the Door for tips to help you understand the process of government subcontracting and where to find the opportunities.

 

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About the Author:

Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

Comments:

This is a great article! Businesses must understand that subcontracting is a great way to establish Past Performance and will ultimately lead to having a better Capability Statement when registering on SAM . Businesses can self register or use firms like US Federal Contractor Registration to conduct the process for them.
I have started a Janitorial business and I never knew about this and now I need to study up on it. Thanks for the information any directions more that you may have to offer.
I started out as a subcontractor as well, its a really refreshing way to do business, especially if you build up a reputation because then people come to you!
I started out as a subcontractor and really enjoyed it. I would recommend it highly. Also, I did a lot of research via the SBA website before I started. VERY helpful! Thanks SBA!!
Before my current business endeavor, I was a technician who worked as a subcontractor for 3 service providers. I enjoyed the ability to plan out and adjust my own schedule as needed. My relationship with my providers was excellent, and I would never want to work any other way.
That's how I started and set up my business. :-)
Subcontractors can be a right path towards getting a correct step towards business. As this opportunity helps one to choose a right career path.
Good writeup. I have been a subcontractor for a few years now and love the freedom to work when I want to, for myself, not someone else.

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