Now Is A Good Time To Get Into Subcontracting

I received a copy of this blog from http://blogpublicspend.com/ and thought my readers might find it interesting.  It pretty much confirms what I have been preaching; this is a great time to get into subcontracting!

You just need to get your ducks in a line and get in on the opportunity.  I will be posting more information that can help you be one of the winners!

Now Is A Good Time To Get Into Subcontracting
by Carlos Raad



Subcontracting is a great way for small business owners to enter the lucrative $500 billion federal market. There are billions of federal dollars being offered though the economic stimulus package under the Obama administration. This has caused the floodgates to open for small business owners competing over contracts directly from federal agencies. For those with no previous experience, winning a federal contract might be a long shot.

Why is subcontracting a great idea?

For one, you can increase your bottom line. You can also learn about the many requirements of government work without having to meet all of them. At the same time, subcontracting can provide direct access to the prime contractor with the kind of expertise and resources that your business may lack.

When bidding on contracts, large companies are required to submit subcontracting plans and they need small businesses to meet their subcontracting guidelines. One caveat is that subcontractors typically earn lower profit margins compared to prime contractors. However if you choose your partner carefully you can build credibility to enter into a prime contracting role in the future.

Attending networking events with federal agencies such as those sponsored by the U.S. Small Business Administration can help you get in front of prime contractors and decision makers at federal agencies.

Small business owners can also post their profiles for free online and network with contractors through websites such as the Federal Contracting Network and mySBX. You can also sign up with large prime contractors through their corporate websites. Browsing sites such as the SBA’s Subcontracting Network where prime contractors post opportunities can be a good way to identify the key players in the market.

When approaching prime contractors, small business owners need to be able to succinctly explain what they do and show how they can add value. I also recommend that you scrutinize prime contractors to verify that they are trustworthy and will follow through on contractual commitments.

It may sound obvious but make sure you understand the terms and conditions of the contract before signing it. I also recommend keeping any eye on compensation and how quality control will be conducted. Hiring an attorney or other expert in this field may be a good idea.

Finally, you need to ensure the contract is profitable or at least a break-even proposition. Some small business owners may be tempted to low-ball an offer with the hope of leveraging it into other business at higher rates. However this can be a mistake as that same price that will be expected in future contracts.

Does anyone have any other recommendations or resources for small businesses looking to win government contracts? Provide comments!