Subcontracting for Prime Contractors: How to Get Started

Subcontracting plan threshold

Over $900,000 (since Oct 1, 2025)

Construction plan threshold

Over $2 million

Who must have a plan

Primes that are not small businesses

SubNet and USAspending

Free to search

Mentor-protege agreement

Up to 6 years

Protege share of JV work

At least 40%

SBA mentor-protege review

About 105 days

Why Subcontracting Is a Good First Step

Many small businesses start in government work as subcontractors. A prime contractor holds the contract with the agency and hires other companies to do parts of the work. As a subcontractor, you sign a contract with the prime, not with the government, and the prime pays you.

This path lets you learn how federal projects run while the prime handles the agency relationship. You build past performance, which helps you win your own prime contracts later. You also meet the people who buy and manage the work.

Subcontracting Plans and the Dollar Thresholds

Federal law asks large prime contractors to share work with small businesses. When a company that is not small wins a contract expected to exceed $900,000, it must have a small business subcontracting plan. For construction contracts, the threshold is $2 million. These amounts took effect on October 1, 2025, when the FAR inflation adjustment raised them from $750,000 and $1.5 million.

The plan sets goals for how much of the work will go to small businesses. It includes separate goals for small disadvantaged, women-owned, HUBZone, veteran-owned and service-disabled veteran-owned small businesses. The plan becomes part of the contract, and the prime reports its progress in the government's Electronic Subcontracting Reporting System, called eSRS.

Primes file an Individual Subcontract Report twice a year, due 30 days after each six-month period ends on March 31 and September 30. They also file a Summary Subcontract Report each year. Because the prime is measured on these goals, it has a real reason to find capable small companies like yours.

Small businesses that win set-aside contracts have their own rule, called the limitations on subcontracting. On a services set-aside, a small prime may not pay more than 50 percent of the amount it receives to subcontractors that are not similarly situated small firms. The limit is also 50 percent for supplies, 85 percent for general construction and 75 percent for specialty trade construction. This means small primes also look for small subcontractors.

SBA SubNet and Other Free Directories

The Small Business Administration runs SubNet, its Subcontracting Network. Large prime contractors post subcontracting opportunities there, each with a point of contact. Small businesses can browse the listings for free and filter them by state or keyword. You contact the prime directly about any posting that fits.

SBA also publishes a free directory of prime contractors that have subcontracting plans. Each entry lists the company and its small business liaison. Several agencies, including GSA, the Department of Transportation and the Department of Agriculture, keep their own subcontracting directories too.

Primes also search for subcontractors in SBA's Small Business Search, which draws on your SAM.gov profile. Keep that profile complete with your NAICS codes, certifications, capabilities and past work. A strong profile helps primes find you when they are building a team.

How to Find Primes on USAspending and SAM.gov

USAspending.gov is a free public website that shows who wins federal money. Use the award search, filter by your NAICS code, the agency you want to work with and your state, and you will see the companies already winning that work. The record shows the award amount, the dates and the place of performance. Those companies are your best prospects for subcontracts.

SAM.gov also posts contract award notices in its Contract Opportunities section. Search for award notices in your NAICS code to learn who just won a contract and when the work starts. A new award is a good time to reach out, because the prime is often still filling its team.

When you contact a prime, send a short capability statement. It should list your services, your NAICS codes, your certifications, a few past projects and your contact details. Ask the prime's small business liaison how they add new suppliers. Many large primes have a supplier registration portal on their own website.

Teaming Agreements

A teaming agreement is a written contract between two or more companies before a bid. Usually one company agrees to act as the prime and the other agrees to be its subcontractor if the team wins. The FAR recognizes these arrangements in Subpart 9.6, and agencies generally treat them as a normal way to combine strengths.

A good teaming agreement says what work each company will do, who writes which parts of the proposal and how the parties share information. It often promises a share of the work, sometimes stated as a percentage. Both companies keep their separate identities, and only the prime signs the government contract.

Joint Ventures and the Mentor-Protege Program

A joint venture is different from teaming. The partners form a new business entity, or a formal partnership, that submits the bid and signs the contract itself. The joint venture registers in SAM.gov with its own UEI, and the partners share the work, the risk and the profit under a written agreement.

SBA's Mentor-Protege Program helps small businesses pair with an experienced mentor company. The protege must be a small business and must apply with a named mentor. The agreement can last up to six years from SBA's approval, and a protege can have up to two mentors over the life of its business. SBA charges no fee to apply.

The biggest benefit comes when the mentor and protege form a joint venture. If SBA approved the mentor-protege agreement before the joint venture submits its offer, the joint venture can compete as a small business for any contract where the protege qualifies as small. That includes 8(a), women-owned, HUBZone and service-disabled veteran-owned set-asides that the protege qualifies for. The protege must perform at least 40 percent of the joint venture's work.

To apply, both companies register in SAM.gov and complete SBA's free online mentor-protege tutorial. They then sign a mentor-protege agreement and apply through SBA's certification website using the protege's UEI. SBA's review takes about 105 days, made up of 15 days of screening and 90 days of processing.

Free Help

Your local APEX Accelerator, formerly called a PTAC, gives free counseling on finding primes, writing a capability statement and reviewing teaming agreements. SBA's Commercial Market Representatives work with large primes on their subcontracting plans and can point you to companies that need your skills.

Many agencies also hold free matchmaking events where small businesses meet prime contractors. Their small business offices list these events on their websites. Going to one or two each year is a simple way to start building relationships with primes.

Sources

https://public-inspection.federalregister.gov/2025-16412.pdf
https://www.sba.gov/federal-contracting/contracting-guide/prime-subcontracting
https://www.sba.gov/federal-contracting/contracting-guide/prime-subcontracting/subcontracting-opportunities
https://www.sba.gov/contracting/resources-small-businesses/cmr-directory/sbas-directory-federal-government-prime-contractors-subcontracting-plan
https://www.sba.gov/federal-contracting/contracting-assistance-programs/sba-mentor-protege-program
https://www.usaspending.gov
https://sam.gov

Checked October 2026. Thresholds and rules change; each source above is the official page.