FedSubK Feature: Prime or Subcontractor? What to Know About Each Role
Updated: Jun 18, 2024
Embarking on the journey of Federal contracting can be overwhelming. FOMO (Fear of Missing Out) can push you into going after prime contract opportunities before your business may be ready for the litany of reporting and other administrative contractual requirements that must be completed during performance of the work. Being a subcontractor does not sound glamorous but, in the Federal marketplace, it can be a lucrative role without all the headaches and hassles of being a prime. Understanding the roles of prime contractors and subcontractors is essential for success in the complex Federal acquisition process.
Prime Contractor: The Responsible Company
When a federal agency contracts with a business to provide products and/or perform services to the Government, that entity is known as the “prime contractor” (or “Prime,” for short). Primes are the party ultimately responsible for the performance of all work under contract and management of the project budget, regardless of what entity (prime, subcontractor, or supplier) performs work as part of the Prime’s team. Being a prime contractor establishes direct privity of contract with the Government (FAR 9.104-1). This legal relationship distinguishes prime contractors in their direct engagement with federal agencies. Primes direct and control all engagements and communications with the Government client. This level of responsibility and control also results in:
- Increased Government scrutiny during performance.
- Increased administrative burden due to
- communications timelines,
- timely and accurate reporting requirements, and
- general compliance procedures for Federal contracts found in the Prime contract from the Federal Acquisition Regulation (FAR) and the agency’s FAR supplement (as applicable).
- Oversight responsibility and the requirement to flow down these same contract provisions and clauses to subcontractors and suppliers for compliance, when applicable.
- Subcontracting reporting (applicable to large businesses only).
Part of the reporting and compliance required by a Prime is covered by the Representations and Certifications your business completed as part of its System for Award Management (SAM.gov) registration. These would be (among others):
- Representation of business size by NAICS, and
- Executive Compensation.
Other reporting and compliance required by the Prime is dictated by clauses found in the contract. These would be (among others):
- Submissions of invoices.
- Whistleblower protections.
- Government property.
- Prohibitions on–
- Contracting for hardware, software, and services developed or provided by Kaspersky Lab and other covered entities,
- Contracting for certain telecommunications and video surveillance services or equipment,
- Certain internal confidentiality agreements or statements,
- Contracting with inverted domestic corporations,
- Use of ByteDance covered applications during performance (aka “No Tik Tok”),
- Segregated facilities,
- Banning text messaging while driving, and
- Certain foreign purchases.
- Reporting on first-tier subcontract awards, employment of veterans, and service employees.
- Limitations on subcontracting (applicable to small business primes).
- Making accelerated payments to small business subcontractors.
- Equal opportunity, to include veterans, workers with disabilities, and employee notification of rights.
- Employment eligibility verification.
- Minimum wage and Department of Labor wage requirements (e.g., Service Contract Labor Standards (SCLS) or Davis-Bacon and other Related Acts (DBRA) prevailing wages).
- Privacy training.
Subcontractor: The Team Player
Primes routinely collaborate with other entities and suppliers to enhance project capabilities. The Prime contracts with these entities, called “Subcontractors,” to provide a portion of the product and/or service required by the Government under the Prime’s contract. Subcontractors must remember that in this role they:
- Have no privity of contract with the Government under this relationship; only with the Prime. Prime contractors communicate and negotiate with the Government, while subcontractors communicate and negotiate with Primes.
- Should not directly engage the Government in any manner and all requests from the subcontractor should go through the Prime for review and discussion.
- Take their sole direction from the Prime, not the Government (Contracting Officer (CO or KO) or Contracting Officer’s Representative (COR)).
While Subcontractors may have reporting requirements that flow down to them under Federal contracts, that reporting is most often to the Prime contractor with few exceptions where reporting is done as part of the Subcontractor’s System for Award Management (SAM.gov) registration (i.e., Executive Compensation).
Being a subcontractor on a federal contract has definite benefits:
- Less reporting requirements (though compliance may still be required).
- Learning about the Federal contracting process through the Prime’s actions (i.e., client needs, communications with the Government, modifications and change order process, etc.).
- Gaining valuable project and past performance experience on a federal contract that you can use on future opportunities when you decide to quote or propose as a Prime yourself.
- Gaining valuable name recognition and earning capital to expand business opportunities in both the Federal and private sectors.
Primes and Subcontractors During the Proposal Process. It is crucial that Primes create and communicate a clear and streamlined proposal process to their subcontractors and suppliers to ensure the development of a viable and timely quote or offer meeting the Government’s performance requirements, price, and schedule needs. The Prime should clearly delineate roles in this process and establish a timeline for subcontractors and suppliers to provide personnel and price information early.
!!!A Word of Caution on “bait and switch” tactics!!!
What is it? When a Prime includes a desirable Subcontractor (or personnel) in a proposal for the purpose of winning the quote or offer then after winning the award, the Prime changes out Subcontractors (or personnel) for a different company (or individual). That's "bait and switch". The Government is getting wise to these tactics and has been adding language to classify Subcontractors as “Key Subcontractors” or their personnel as “Key Personnel” which requires the Prime to replace the subcontractors or personnel with companies or employees with equal or better experience, education, performance history, and skills. Put simply, don't do it (or you'll be remembered, and not in a good way).
Prime / Subcontractor Agreements.
Written agreements between the Prime and any subcontractors are important to ensure not only the Prime’s terms and conditions are met, but the required flowdown provisions and clauses from the Government are met by subcontractors at all tiers (or as indicated) under a federal contract. The requirement to comply for subcontractors is usually based on statute, type of work, types of employees, or dollar threshold of the subcontract agreement.
The Prime is typically responsible for drafting the agreement between the Prime and Subcontractor and it should contain, as a minimum,
- Identification of the Prime’s Federal contract, by number, order number (as applicable), and Federal agency.
- Scope of work or services that clearly defines the Subcontractor's role and scope of work on the contract.
- Terms related to deliverables, timelines, and compensation.
- Flow down provisions and clauses from the Federal contract.
- Compliance with prime contract requirements and how compliance is assured.
- Clear lines of communication between the parties to include the Prime’s communication of project needs and expectations to the Subcontractor.
- Define the roles and responsibilities of both parties during performance.
- Recordkeeping requirements and document control.
- Modifications and change order processes and pricing of the same.
- Resolution of disagreements, use of Alternative Dispute Resolution (ADR), and legal authority for disagreements.
FAR and agency provisions and clauses typically state at the end of the provision or clause language when the compliance or reporting requirement flows down to subcontractors, at what tier, and any instructions for the Prime for wording or language to be used or substituted in the flowdown.
Subcontractors must further flow down any Federal contract provision or clause that requires applicable at lower subcontract tiers. Agreements between first tier and lower-tier subcontractors are the responsibility of the parties in question, not the Prime. The first-tier subcontractor may also be responsible for upwards reporting and ensuring compliance of lower-tier subcontractors. This adds an administrative burden to the Subcontractor, but not near that required of the Prime.
Know Your Readiness.
Before diving in to win a Prime contract, be real and ask yourself–
- Is my company financially stable enough and has enough available capital that it can wait 30 or 60 days, or more, to get paid? Waiting for payments is not uncommon, unfortunately.
- Do you have the breadth of experience needed to perform successfully?
- Are you known or proven in your industry, particularly under the NAICS code that classifies the products and/or services you wish to sell to the Government?
- Do you have knowledge of the Federal marketplace for your industry or NAICS?
- Do you have existing relationships with agency personnel (i.e., buyers, program personnel, small business specialists, etc.)?
- What is the extent of our experience and successful performance on Federal contracts as a subcontractor?
- Does the company have the internal administrative infrastructure (i.e., resources, time, management, and operations structure) such that the offer, compliance, and reporting requirements of a Prime can be met timely?
- Can we meet any bonding requirements?
- Can we self-perform, or do we need a team, and what will that team look like?
- For bid/proposal preparation?
- For performance?
- For any specialized requirements?
- For administrative support?
- Has the Prime and its team performed together?
If you answer any of these questions in the negative, consider if proposing as a Prime on a Federal contract is the best avenue to participate in the opportunity. These questions merely expose gaps your business may have that need filled in order to participate as a Prime. Get those gaps filled before you propose!
Navigating Federal contracting, whether a prime or a subcontractor, is a business decision. Know before you jump in the deep end; starting in the shallow end is always a safe bet and, before long, you will be swimming with the big fishes. It is a time-consuming and complex business to report and comply with all the Federal Government’s requirements and that complexity grows every day (aka, look at the new cybersecurity rules forthcoming). Better understanding the roles of Primes and Subcontractors is a crucial first step to growing a lucrative and successful relationship with the Federal Government. Being realistic about the role that best fits your business now and as it grows is key for a successful Federal contracting journey.
#federalcontracting #subcontractor #prime #rolesincontracting
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The FAR Overhaul: Long-Deferred Maintenance on the Government's Procurement Highway
If you’ve ever worked in federal procurement — as a contracting professional, program manager, small business, prime, sub, or advisor — you’ve probably had this moment:
You’re doing your best to follow the rules…and suddenly you hit a clause, a cross-reference, or a requirement that feels like it came out of nowhere.
That’s because the Federal Acquisition Regulation (FAR) isn’t just a set of rules. It’s a highway system. A massive, heavily traveled road network that’s been patched, expanded, and rerouted for decades — and in many areas, it’s operating with years of deferred maintenance.
Let’s talk about what that really means using the highway analogy to explain why the Revolutionary FAR Overhaul isn't as "revolutionary" as some might think.
The FAR is like a Well-Traveled Federal Highway
The FAR is the main road that nearly every federal acquisition travels on. And like any highway system:
- Everyone uses it
- Everyone depends on it
- And over time, it’s been modified in ways that made sense in the moment… but created complexity later
If you look at any highway on Google Maps it shows a rather clean route. FAR, we were taught, was set up to be the same way: requirements, procedures, clauses, and guidance. But once you’re actually “driving” that road? Well, you realize the terrain is full of twists and turns. It's more complicated than you realized.
Hidden Guardrails: The Rules You Don’t See Until You Need Them
Some of the FAR’s most critical compliance safeguards are like guardrails buried under weeds or snow. They’re there for a reason: to prevent waste, protect fairness, ensure accountability. But they’re not always easy to spot. In practice, you often discover them when someone asks:
“Did you document that?”
“Where’s your justification?”
“Why didn’t you compete this?”
“Which clause applies here?”
That’s when you realize the guardrails were present the whole time — just not visible.
Guardrails are added all the time or in the process of being fixed (via rulemaking). But all that construction can clog up traffic and make the time for arrival (contract award) continually recalculate.
Hazards & Risks: Potholes, Speed Traps, and Fog
Now add in the hazards:
- Potholes = ambiguity and unclear language
- Fog = inconsistent interpretation across offices and agencies
- Construction zones = evolving policy updates, executive orders, and new mandates
- Speed traps = protests, audits, IG scrutiny, and compliance reviews
And these hazards hit different people differently. The same stretch of FAR may feel smooth to one team and treacherous to another. That’s not because the people are bad at driving — it’s because the road is uneven.
Side Roads & Gray Areas: The Detours Everyone Knows About
Then there are the side roads. Some are official alternate routes: simplified acquisition procedures, flexibilities, exceptions, and FAR “shortcuts” that exist for good reasons. Those are the routes people take because they’ve always taken them. Indicators might be hearing yourself or your peer say --
“We’ve always done it this way.”
“That’s how the last CO handled it.”
“This should be faster.”
“It’ll probably be fine.”
Side roads aren’t automatically wrong. But they come with risks, Eventually someone asks, “Why did you go that way instead of the main route?”
Others are the gray areas -- the gravel roads and roads only the locals (experienced COs/KOs) know. Those routes have to be navigated very carefully and even the best driver can have issues even if there is less traffic. Many times they beat those on the highway to their destination, but it's only because they know where all the seen and unseen hazards are from their years driving that route.
So What Is the FAR Overhaul, Really?
Here’s the key point:
✅ It is NOT building a new road.
✅ It is NOT bulldozing the FAR and replacing it.
✅ It IS road maintenance -- the kind that should've been done years ago.
And when you have decades of deferred maintenance, it takes a lot of work to make that road appear to be what it was all along.
But that's not "revolutionary". That's finally doing the work you've been putting off because you couldn't get to it.
The County (in this case, the FAR Council, being the governing body over the FAR and its contents) could always do a little better job at maintenance than they do. But their budget and resources are low and their workload demands are very high (just take a look at the FAR Open Case Report). Sometimes it takes a new Sheriff In town (a new Administration) driving down the highway see what those too close to it should have been aware of all along. Layers upon layers of deferred maintenance.
The FAR Overhaul is best understood as freshening up the same highway.
- Clearing overgrowth = outdated and redundant material and non-regulatory clutter.
- Improving signage = clarity and usability.
- Standardizing merges and exits = better consistency and flow.
- Removing obsolete detours = non-regulatory clutter, outdated terminology, and rules that no longer serve their purpose.
And a bonus is the updated maps available for your travels (FAR Companion and Practitioner Albums)
The destination isn’t changing. But the route is FAR more functional -- see how I did that. ;)
Why This Metaphor Matters
When people hear the word “overhaul,” they often assume “Everything is changing.” But what this effort really signals is “We are fixing the road we’ve been driving on for decades.” That’s important because procurement has become more complex, acquisition timelines are under pressure, and both agencies and industry need guidance that is easier to understand, apply, and defend.
If the FAR Overhaul is the same old FAR highway with better pavement, clearer signs, fewer surprises, and, hopefully, less time lost in detours, fewer compliance collisions, and a smoother drive for everyone. The biggest difference is that now all travelers know what the locals knew all along. How to get from point A to point B in less time using an updated road system and map.
Safe travels on the FAR Highway in 2026!
The FAR Is a Highway System… and the Revolutionary FAR Overhaul Is Long-Overdue Road Work
Contract Types and Contract Vehicles: The Difference Matters
Nuances matter in Federal Contracting. Those who haven't lived the Federal Contracting experience day in and day out may believe it's minor details that don't make a difference. They don't pick up on the nuances.
For those that have lived it from behind the walls of an agency know how those nuances can make a difference between how you are perceived building relationships with primes, potential team members and, most importantly, agency decision-makers.
One nuance -- Contract Types and Contract Vehicles.
Contract TYPES are defined by the pricing structure and risk ratio between the parties. They are:
✅️ Firm-Fixed-Price (FFP) to include FFP with Economic Price Adjustment (FFP w/EPA), Prospective Price Determination, Fixed-Ceiling Priced Contracts with Retroactive Price Redetermination, and those with a Level-of-Effort term (FFP-LOE).
✅️ Cost Reimbursement (or "Cost-Plus" ("CP")) to include cost sharing, Cost-Plus-Fixed-Fee (CPFF), Award Fee (CPAF), and Incentive Fee (CPIF).
✅️ Time-and-Materials (T&M) with materials on a fixed-price or cost-reimbursement basis.
✅️ Labor-Hour (L-H).
Contract VEHICLES provide the performance and administrative structure for the Contract Type. Those are:
✅️ Definitive Contracts are for specific stand-alone project(s) that fall above the Simplified Acquisition Threshold (SAT).
✅️ Indefinite Delivery Vehicles (IDVs) include Indefinite Delivery Indefinite Quantity contracts (IDIQs), Definitely Quantity, and Requirements vehicles. They include, but are NOT exclusively, governmentwide (GWACs), agency-specific, or GSA Multiple Award Schedules (MAS).
➡️➡️ Under the IDV umbrella falls task orders (services) & delivery orders (products) and specific instructions for who can order and how.
✅️ Agreements such as Basic Agreements, Basic Ordering Agreements (BOAs), and Blanket Purchase Agreements (BPAs).
➡️ ➡️ They are most often an umbrella for calls / orders (agencies call them both of these things even where FAR / RFO is specific, so it is easy to get confused), but don't have to be.
✅️ Purchase Orders (POs) (actions that fall under SAT).
✅️ Letter Contracts.
Yea, I know. FAR (even the RFO) lumps them all together as "Contract Types" in Part 16. But none stand alone. In my opinion, the FAR rewriters blew their chance to clarify this important piece of the procurement puzzle. For example:
▶️ IDIQs for services may include the ability to issue multiple types of task orders like fixed-priced, cost, T&M, and L-H under them, or only one type.
▶️ Definitive contract vehicles can be any contract type or combination thereof (hybrid) as indicated in the contract line items (CLINs) and for which terms and conditions are included.
Bottom line is -- There is not a complete understanding of a contract vehicle without defining its contract type(s).
If you see folks lumping TYPES and VEHICLES together in a discussion without explaining the difference, you know they aren't familiar with the nuances of this part of the FAR / RFO.
Follow those that are and have. Visit fedsubk.com and Expand your Federal Contracting knowledge today.
There are nuances in every FAR / RFO Part, including Part 16. We talk about why it is important to know and understand them in this marketplace.
FedSubK Feature: Be Seen! Why Your SBS Profile is So Important
UPDATED November 2025 to incorporate changes from the SBA Dynamic Small Business Search (DSBS) to the new SBA Small Business Search (SBS)
I’ve posted on LinkedIn a lot recently about ways to be seen as a little fish in the big pond that is the Federal marketplace. Every GovCon consultant has a take on the best entry points with agencies. My take is there is only one place small businesses MUST put their best foot forward to be quickly and easily seen by Federal buyers for potential opportunities and influence small business set-asides.
The Small Business Administration (SBA) Small Business Search (SBS) is THE PLACE you must be on your A-game.
The Small Business Search (SBS) is a database in which SBA houses information on the current pool of certificated small businesses. Presently, small businesses that do not have certifications or are self-certified, may also create a profile in this database. The SBS is used by contracting officers, small business specialists, large prime contractors, and other small businesses looking for teaming partners to find small businesses that can help meet Federal requirements and identify businesses that can help the Government (or a prime contractor) meet its small business goals. SBS is one of the first--and often only--sources used in market research by agencies to determine the numbers of small businesses able to provide products or services by North American Industry Classification System (NAICS) code.
You can see why this might be an important place to pay attention to, eh?
Businesses have forgotten about the SBS in the last few years because SAM.gov no longer sends small business registrants directly to SBS at the end of their registration to complete the profile like it used to. I HUGE bummer. Businesses now must wait for their SAM.gov registration to be activated, then they can establish an SBA SBS account, claim their entity record, and fill in their company profile in the SBS system. Federal buyers are looking for detailed information from SBS to use as part of their market research efforts.
SBS isn’t only for market research.
Even more importantly, the SBS shows Federal buyers the status of any pending certification applications for the purpose of determining whether you are eligible to compete for a set-aside action. For example, an Economically Disadvantaged Woman Owned Small Business (EDWOSB) can still submit an offer for an WOSB set-aside even with a pending application for certification showing in the SBS. Contracting Officers often use SBS as a source to confirm the socioeconomic certification status and 8(a) program participation along with SAM.gov.
While MySBA Certifications automatically sends socioeconomic certification status to SAM.gov and updates the requisite reps and certs to reflect the correct socioeconomic status, recently it has taken weeks for that migration to occur. WOSBs and EDWOSBs have reported not seeing their correct socioeconomic status reflected in their SAM entity record.
Businesses should always check their SAM entity record to ensure that the proper status is shown within a reasonable time after receipt of an active certification status; usually within 14 business days. If the record is not accurately reflected, you can contact answerdesk@sba.gov or the SBA socioeconomic program under which your business was certified for assistance. If a Contracting Officer says that your SAM record does not reflect the status claimed, ask the Contracting Officer to check SBS for the more accurate information because of these delays.
So now let’s talk about BEING SEEN in SBS and walk through each part of the registration.
Understanding how to maximize the fields in SBS is how you can make the best possible first impression so that Federal buyers want to learn more about YOU!
The Key Words
Often businesses pluck these from thin air and over-generalized based on what they think the Government wants to see. Key words need to reflect and incorporate aspects of your primary NAICS, secondary NAICS, and what you can provide under those NAICS. If you use key words that don’t reflect your primary NAICS, you’ll leave the Government scratching their head about you. They won’t understand the message you’re sending about your company. Be consistent and specific with key words while tying into your NAICS codes in order to leave the best impression. You have 500 characters -- use them wisely.
The Website
Be sure that you include the URL for any website you have. Make it be more than a landing page. It needs to tell your story. It needs to include information about your company, what you sell, past customers, and products or solutions you provide. And most of all, it must be polished. Scrub your site hard for formatting, typos, grammatical errors, etc. Acquisition personnel using the SBS will often quickly click on the site to see just how polished it is. When it looks good, they get the impression you know your stuff and pay attention to details.
The Capabilities Narrative
This is the written equivalent of your elevator pitch. This section should include all the things you’d include in that two-minute speech. Hit hard on what your company specialized in and its core product or service areas. Show the business’s focus and avoid being all over the map by overpromising on the breadth of work the business performs.
Near the end of the capabilities narrative, list any socioeconomic certifications Why not lead with it? Because that certification is only part of your business, and it alone does not get you interest from the Contracting Officer. End with that information so the Contracting Officer can easily see it in a quick query and get your business into their market research counts.
Lastly, identify any government contract vehicle or GSA Schedule your company may hold. If you can catch their eye that you have an existing GSA Schedule or your business participates in the 8(a) program, you’ll get counted and likely get a look in terms of the Contracting Officer wanting to know more. If they need to meet a socioeconomic goal, they can see quickly. You’re helping the Contracting Officer do their job. They LOVE that! (And made another great first impression!)
SBS now also includes a field to add a link to your online capabilities statement. Use it!
“Extras” You Should Never Skip
Performance History
I cannot say this enough…if you history doing work for any Government or quasi-Government entity at any level -- Federal, State, or Local level -- list them! Don’t play the “they’ll see that when I propose” game. Showing performance history—even if it is minimal or commercial and not Government--helps. How? It proves the viability of the business and the size and types of projects you’ve completed. Those goes a long way to determining eligibility of the business based on performance on same / similar work of a same / similar dollar value (“Rule of Two” stuff – you can read more about that here).
Review Your Profile
Go out to the SBS site and use the filters for your NAICS, business name, geographic location, and business types. Make sure your show up and see how your profile measures up to your competitors. Look at their records and see what they included that you haven’t. Use the good ideas of others, but don’t plagiarize. Contracting Officers will see that and that won’t look good for either of you.
Keep Evolving
Your SBS isn’t something that you can just set and forget either. Make reviewing your profile in SBS something you do when you renew your SAM.gov registration every year. If something major changes in your business focus, NAICS, or socioeconomic status, make associated changes in SBS.
What GovCon doesn't always talk about -- The SBS Influence
When doing market research and trying to determine if an acquisition should be set-aside for small businesses, the Government is not only counting about the numbers of small businesses that claim they can do the work under a NAICS code in SBS. They are analyzing your SBS profile to see if your business could be one of the "... two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery" and they have “…a reasonable expectation of obtaining an offer…” from you. (There’s that pesky “Rule of Two” again.)
In other words, based on what they see, could you submit a proposal likely to win? And how does a Contracting Officer determine that? Simply put... the your answers to everything we just covered.
Completing your profile helps tip the market research scales toward a small businesses set-aside and possibly a specific socioeconomic set-aside. If you're all over the map in your SBS narrative, the Government will not consider you viable eligible contractor towards that “Rule of Two” and could possible choose to go another way with their acquisition strategy, away from a small business set-aside. Or worse, they set it aside but remember your name from the market research as one of the businesses that didn’t make their initial market analysis cut.
Influence where you can! SBS is the place where you have a lot of influence!
Have I convinced you to get out there and create or update your SBS profile yet?
While the system is no longer got the word "Dynamic" in the title, don't forget its meaning. Life is dynamic, business is dynamic, and your SBS profile should still be dynamic, too. Get it completed ASAP. You can’t afford not to.
Remember again, SBS IS WHERE FEDERAL BUYERS GO TO FIND SMALL BUSINESSES and where other small businesses go to find teaming partners and subcontractors.
Get out there, GET NOTICED, BE SEEN, and STAY DYNAMIC!
(former title: FedSubK Feature: Be A Dynamic Small Business!)
