What Is a Prime Contractor?
A prime contractor is the business that holds a contract directly with the government. It's responsible for all the work, including any it subcontracts.
Prime contractor in plain English
To bid as a prime, you need a full SAM.gov registration. A UEI-only registration isn't enough.
A small business prime on a set-aside has to do a required share of the work itself under the limitations on subcontracting.
Large primes on contracts above $900,000 ($2 million for construction) generally need subcontracting plans with small business goals, which gives them a reason to team with small firms.
Related terms
- Subcontractor: A subcontractor is a business hired by a prime contractor to do part of a government contract. Your customer is the prime, not the agency.
- Subcontracting plan: A subcontracting plan is a large prime contractor's written commitment to goals for using small businesses as subcontractors on a federal contract.
- Limitations on subcontracting: The limitations on subcontracting rule caps how much of a set-aside contract a small business can pay other firms to perform. On services, the cap is 50%.
- UEI (Unique Entity ID): A UEI (Unique Entity ID) is the 12-character ID SAM.gov assigns to your business. It replaced the DUNS number on April 4, 2022.
Put it to work
Looking for another term? Browse the full glossary or the government contracting glossary guide.