How to Make $10M Federal Subcontracting | Business Development Roadmap

Winning a prime contract with a federal agency can be hard if you're new to the federal government market.

Fortunately, subcontracting offers a lucrative path for many small businesses.

There are 3 Paths to Federal Revenue as a government contractor.

• Related training "3 Paths to Federal Revenue – How to Win on Each Path" 

If you are just getting established or if you just don't want to be a prime, you can still build a $10 million revenue stream by repeatedly subcontracting on existing federal contracts. 

Subcontracting on a contract that is already awarded and managed by a prime contractor is a faster and easier path to federal revenue. 

Subcontracting by the Numbers

As the image shows, your company can subcontract under another small business, or you can subcontract for a large prime contractor.

Either way, the other company has the federal contract –  you are just on their team.

Subcontracting is right for you, if:

1. you want to develop experience and build performance history
2. you don't want the bureaucratic responsibilities required to manage a government contract

Prime contractors with awarded contracts frequently need specialized subcontractors and add FTEs to a project as often, and as long as necessary, to fulfil the government's needs and meet their deadlines.

REVENUE BY THE NUMBERS:

• FOCUS on only one federal agency, one core competency

• IDENTIFY 10 potential teaming partners to build strategic relationships with 
• GOAL: To secure 4 subcontracting opportunities per year per teaming partner  (total = 40 opportunities)
• Example for tech services company (double annual rate = annual rate)
  • Average rate of $100 hours FTE = $200,000 annual
  • 5 FTE = $1M; 50 FTE = $10M
  • Spread across 5 years = $2M per year
  • Faster if your firm is larger
• Opportunity: 8a STARS III contract and subcontracting partners ($50B contract vehicle with 1000 participating companies) The 8(a) STARS III GWAC is a small business set-aside contract that provides flexible access to customized IT solutions from a large, diverse pool of 8(a) industry partners.  Learn more here 8(a) STARS III Contract Overview
  

ROADMAP for SMALL BUSINESS SUBCONTRACTING | The easiest government contracts to win

To succeed in subcontracting, you must hyper-focus on your strongest core competency and be able to communicate this expertise clearly. 

1. Determine your business maturity level
2. Determine your core competency
3. Primary Agency: Choose only one agency to target
4. Primary Location: Determine where you want to grow geographically
5. Contract Vehicles: Determine which vehicles align to your target agency and core competency
6. Capability Statement: Create a fresh statement highlighting your contribution to a partner’s team
7. Call Plan Template: Follow a structured plan to standardize your call objectives and questions
8. SB POCs: Research ideal small business partners
9. Large POCs: Research ideal large business partners
10. Industry Day: Attend industry days at target agency to learn and network
11. Intro Calls: Schedule intro calls to begin new relationships
12. Regular Meetings: Schedule recurring meetings every 2-3 weeks as appropriate
13. General NDA: Once you start conversations with another firm, ask for a signed NDA 
14. Supplier Portals: Register in large prime and agency internal vendor databases
15. Identify Ops: Bring opportunities to discuss with teaming partners
16. Open Reqs: Research open positions with teaming partners to see where you might fit on their current contracts
17. Contract Vehicles: Get on teaming partners contract vehicles
18. Reusable Content: Create reusable content for proposals

• WATCH How To Build New Federal Relationships that Lead to More Contracting Revenue and Success