Subcontracting Your Starting Point into the Government Market

When considering how to enter the government marketplace, most business people first think about doing business directly with federal, state or local government agencies.

Contracting directly with a government entity involves many steps, and likely involves the requirement that you have years of established experience. In fact, there are many major considerations for doing government business as a prime contractor, including:

• Thorough knowledge of all applicable procurement regulations and laws.
• Registration in numerous vendor databases and keeping them up-to-date.
• Comprehensive market research to identify upcoming work.
• Skills necessary to analyze government solicitations, and then prepare detailed and responsive offers.
• Ability to secure bid, performance and payment bonds, if required.
• Ability to finance what may be a multi-million dollar job for at least 60-90 days until the first payment arrives.
• Established relationships with agency, including buyers and end-users.
• Track record of relevant experience.

If your business lacks the wherewithal to support all this, you may want to consider an alternative.

  

The Alternative to Doing Business Directly with the Government

For less experienced and smaller businesses, there may be a simpler, faster, and less burdensome way to break into the government market — subcontracting. The subcontracting route allows a company to do business with the government indirectly — through a prime contractor — on smaller pieces of work and involving fewer requirements. A subcontractor is answerable to a prime contractor, not the government, and the prime contractor is held responsible by the government for overall work performance.

Prime contractors are responsible for meeting all government contracting requirements. Primes must be able to finance the job, bond the job, and complete the job on schedule.

Preparing To Be a Subcontractor

So, what are the starting points for pursuing the subcontracting path? Here are a few suggestions:

1. Gain at least a general knowledge of the government marketplace.
2. Identify any areas of the government market where you have particular insights.
3. Look for work areas where you may fulfill a specialty requirement or a niche.
4. Familiarize yourself with the government’s various small business preference programs and how you can qualify.
5. Create and polish a presentation about your firm’s capabilities and strengths.
6. Pitch your credentials to prime contractors.