Glossary / Business
SubcontractorSub
A subcontractor works for the prime contractor under a subcontract, delivers part of the scope and is paid by the prime. It has no contract with the government and, with few exceptions, no direct claim against it. Primes with large contracts carry small-business subcontracting goals and must report how much they place with small, disadvantaged, women-owned, veteran-owned and HUBZone firms, which is why many primes look for small subcontractors. The limitations on subcontracting rule caps how much of a set-aside a small prime may pass to firms that are not similarly situated.
Why it matters to your pipeline
Subcontracting is the shortest road into government work for a company with no federal record: the prime handles the buyer and the paperwork, and the subcontractor delivers. It builds past performance, teaches the buyer's expectations and often leads to a prime award at the same site. GovSmith's Search includes the large contractors that need subcontractors, not only the agencies.
When this term shows up in an opening GovSmith finds for you, your vCM explains what it means for that pursuit and does whatever it calls for. You decide; we do the work.
Example
A translation company with no federal history takes a $240K subcontract from a prime on a State Department language-services contract. Eighteen months later it answers a sources-sought notice as a prime, citing that work.
Find out what applies to you
Some terms will matter to your business right away and some won’t for years. A vCM can tell you which are which.