When a Federal contract is awarded to an other than small business (or commonly referred to as a large business), exceeds a certain threshold, e.g. $750K ($1.5 million for construction), and subcontracting possibilities exist, the contract is required to include a small business subcontracting plan. This plan sets goals for subcontracting to various types of small businesses including:

• Small Businesses;
• Small Disadvantaged Businesses;
• HUBZone Small Businesses;
• Women-Owned Small Businesses;
• Veteran-Owned Small Businesses;
• Service-Disabled Veteran-Owned Small Businesses;

The subcontracting plan must include the percentage goals for utilizing small business, and socio-economic categories of small business including SDVOSB and VOSB as subcontractors, the total dollars planned to be subcontracted, and the methods used to develop and achieve these goals. The small business subcontracting plan requirement ensures that small businesses have maximum practicable opportunities to participate in Federal contracts.

The U.S. Small Business Administration provides access to government-wide subcontracting opportunities through SUB-Net and Subcontracting Assistance Directory.

Subcontracting is a strategic entry point for small businesses looking to grow in the Federal marketplace. If offers a valuable opportunity to gain insight into agency operations and customer needs by working alongside experienced prime contractors. Subcontracting also helps build relevant past performance - often a critical factor in winning future prime contracts. In an environment where procurements shift toward larger, longer-term contracts, subcontracting provides a practical path for small businesses to stay competitive, demonstrate capability, and position themselves for future success.