The Do’s and Dont’s of Subcontracting Agreements

Partnering in the federal government can be done in different ways. Since we have briefly touched on Contractor Teaming Agreements, or CTA’s in past posts I want to talk about subcontractor agreements. Normally vendors with little to none government experience obtain sub agreements. A sub agreement is also a great way for contractors who do not hold a government contract to get work experience. Subcontractor agreements are open to all business sizes, the differences between a sub-agreement and a CTA are:

  • Sub- agreement only one party acts as the prime
  • Past performance is not required
  • The party that holds the contract reports quarterly sales, usually the prime (if GSA schedule)

Subcontracting has challenges and should be taken seriously. To ensure that each party performs their duties a written contract should construed. If modifications are made be sure to add every change to the written contract. That way you know what your role is as well as the compensation for the work performed. Here are some challenges of subcontracting:

  • Building business growth is slow
  • Not being properly compensated
  • Not receiving credit for work performed

A contractor that is interested in subbing needs to market their business to available primes in the same way that they market to the public. You need to have an elevator speech which is a summation of your capabilities that you will be able to present in less than a minute. Another marketing technique would be to provide samples of your work through small projects and keep in mind to maintain your focus in building a positive reputation.

Finding a reputable company to sub with calls for you to do your research. You can locate an interested company through:

  • Social media
  • Federal Business Opportunities
  • Sales query sales
  • GSA E-Library
  • Industry events & conferences

Once you have solidified your agreement you should re-evaluate the contract every six months to ensure continued growth and once again always put everything in writing.

For government contract consult contact Procurement Source Solutions 800-267-7640

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