If you want to subcontract for or are interested in teaming with a prime contractor, you may be asked to submit a proposal. Prime contractors usually have specific information they want to see. You'll likely receive a request for qualifications (RFQ) or a request for proposal (RFP) explaining these requirements.
Below, you'll learn about the information that potential government clients or subcontractors might be required to include and a few tips for creating the strongest possible government subcontractor proposal.
What is Subcontracting?
In government contracting, a prime contractor is a business that works directly with the federal, state, or local government on a contract opportunity. Sometimes, that prime contractor will enter into a teaming agreement or work with a subcontractor (or sub) to provide some of the products or services that the prime cannot provide on its own. Subcontracting is the process of the subcontractor working with the prime to deliver products and services to the government.
Subcontracting is the process of the subcontractor working with the prime to deliver products and services to the government
What Should Be Included in a Subcontractor Agreement?
A subcontractor agreement is a formal document that a prime and sub enter into. Any subcontract agreements will include basic project requirements and several key components, such as a table of contents, business information, a full scope of work, payment terms, and language to help resolve potential disputes.
Key Components of a Subcontractor Proposal
- Subcontractor business information: You'll want to include some basic information about your business - your company name, location, tax ID number, etc. You'll also want to highlight what your business does and the unique capabilities it offers the government.
- Scope of work: Any qualified subcontractor will want to specify a detailed scope of work they will be doing for the prime contractor.
- Payment terms: Your business will want to get paid for all its hard work! Most agreements will include a complete cost breakdown of the subcontract price. Be sure to include a payment schedule in your bid proposals and include both preferred payment methods and payment terms.
- Dispute resolution: If any issues arise during the contract's fulfillment, it is always important to consider including indemnification and termination clauses.
How to Write a Subcontractor Agreement
Below are three tips on writing subcontracts that every potential subcontractor should follow.
1. Review Qualifications and Disadvantaged Business Enterprise Information
In addition to the basics that might be included in a capability statement – your company's name, address, ownership status, length of time in business, DUNS number, tax identification number, and the name of a principal contact.
You should include your company's history, management strategy, and any qualifications that set it apart from other subcontractors. Also, details about the company's relevant experience with similar jobs should be incorporated.
The prime contractor may also want to know if your company is a small business (SMB), a minority- or woman-owned business or has been certified as a disadvantaged business enterprise (DBE). You'll probably be asked to include information about licenses and industry certification, as well.
2. Write a Strong Statement of Work, Products, and Services
The statement of work should accurately describe the products and services the prime contractor needs you to provide. It may be a short letter or a detailed report. In the statement of work, describe the contributions you'll make to the project, along with deadlines for starting and completing work. Also include details on design review, testing, training, and other necessary tasks.
The prime contractor will also want assurance of accountability. Your statement of work should identify the project's point of contact, indicate whether inspections or facility tours are possible, reassure that the job will be completed on time, and outline your plans for auditing the project as part of this accountability.
3. Set a Budget for Your Government Subcontractor Proposal
Your budget explains how much the contract will cost and why. You should be able to explain all the job's components and direct costs, such as pricing details, supplies, materials, insurance, travel, and legal fees.
Also, explain all the indirect costs of your overhead and infrastructure, such as rent, human resources, equipment, and management. Be prepared to clarify why certain costs are included. For example, the prime contractor may question the travel budget and have you break it down into the number of necessary business trips. Or you may need to justify an equipment purchase.
Your bid proposals must include extensive information to present a compelling case to the prime contractor.
Before you plunge into your proposal, find out everything the prime contractor wants to know about its potential clients and subcontractors—then strive to provide it and be willing to offer more information upon request. Above all, stress why your company is the best subcontractor for the job.
What Kinds of Subcontracts are Available from the Government?
There are opportunities for your business to provide products and services via government subcontracts in nearly every industry category, including information technology, engineering, and construction contracts.
Depending on the products or services being procured in the contract, the government may use a different type of contract to meet its needs.
These are the most common types of government contracts that your business may encounter as it seeks out new subcontracting opportunities:
- Fixed-price contracts
- Cost-reimbursement contracts
- Time and materials contracts
- Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Free Guide
A Guide to Understanding Types of Government Contracts
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How to Win More Subcontracting Agreements
Are you looking to put these tips into action and start uncovering more government subcontractor leads or teaming opportunities for your business?
You might be ready to learn more about GovWin IQ, the leading market intelligence platform that provides up-to-the-minute government contracting information and early notice of upcoming opportunities.
Whether you're a small business contractor or a larger enterprise company, GovWin can help you meet your government sales goals.
