How to Make $10M by Subcontracting in the Federal Market

If you're new to the federal government marketplace, winning a prime contract with a federal agency can be hard. 

In today's LinkedIn LIVE session, Neil McDonnell explains how your small business can earn $10 million simply by subcontracting on existing federal contracts. Subcontracting is far easier than pursuing a prime and delivers revenue far quicker.

3 PATHS to Contracting Revenue

  1. If your business is new to federal contracting, you will be most successful by subcontracting with other small businesses first. Subcontracting allows you to grow your revenue while learning the important business skills 
  2. If you have at least 3 years of experience and some federal contracting experience, then you might prime directly by focusing on a single agency and a single core competency.
  3. If you are earning $5M+ revenue and have federal contracting experience, you should try to get on the contracting vehicles of large primes and on their existing contracts.

About Large prime contractors

  • Frequently required to partner with small businesses when bidding on or performing contracts for federal, state, or local agencies
  • Create thousands of small business subcontracting opportunities every year.

For most small businesses, subcontracting is a great way to begin to grow their government contracting experience.

As you gain valuable experience as a sub to large contractors, you avoid the administrative overhead costs and resources necessary to manage execution of large contracts.

Subcontracting to a prime can also be a springboard to future direct contract awards within an industry.


The first step on the path to becoming a successful subcontractor is discovering everything you possibly can about your target partner before you pick the phone.

In order to understand the footprint of any organization, divisions, priorities and past contracts before approaching prospective prime contractors, you have to take the time for quality research.

Do you want to sub or prime? and Federal Procurement Data System (FPDS) offer important details including dates, NAICS codes, contacts and more.

HANDOUT : Here is the handout that Neil mentions in his video training above.

Basic Guidance 

Set Goals:

  • Determine your efforts based on how much federal “experience” you currently have. 

Core Competency:

  • You must limit to 3 tops so others can quickly see how you align with them. 

Primary Agency: 

  • If you have some experience, then choose only one agency to pursue partners. 

Primary Location:

  • Determine where you want to grow geographically, i.e. around your offices. 

Contract Vehicles: 

  • Determine which CVs align to your target agency and core competency. 

Capability Statement:

  • Create a fresh one that highlights your contribution to a partner’s team. 

Call Plan Template: 

  • Used for initial outreach efforts to standardize your objectives and questions. 


  • Perform necessary research to find POCs for ideal small business partners. 

Large POCs: 

  • Perform necessary research to find POCs for ideal large business partners. 

Industry Day:

  • Attend industry days at target agency to meet others actively targeting this agency. 

Intro Calls: 

  • When ready, schedule and hold intro calls. Make sure to schedule out; don’t do on the fly. 

Regular Meetings:

  • As you get traction, work to schedule recurring meetings every 2-3 weeks. 

General NDA: 

  • Once you have a firm willing to explore working together, ask for their NDA to sign. 

Supplier Portals:

  • As you target large primes for subcontracting, register in their database of vendors. 

Identify Ops:

  • As you have regular meetings with partner, bring opportunities to discuss. 

Open Reqs:

  • Research your new partners’ open positions to see where you might fit on current contracts. 

Contract Vehicles:

  • As you build your relationship with new partners, get on their contract vehicles. 

Reusable Content:

  • Have proposal pages that can be quickly delivered to prime on your core comps. 

READ MORE : Great blogs and live video trainings

LISTEN MORE – Small Business Success TIps Podcast Episode #27 

  • Nell McDonnell and author and RSM Federal managing director Josh Frank discuss
    1. The 'long-game' cycle of government contracting
    2. How to combine business development with business strategy
    3. How to grow through subcontracting and to directly influence acquisition

99% of the way there.

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