What Is a 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.
Subcontracting plan in plain English
Large businesses that win federal contracts above $900,000, or $2 million for construction, generally must submit one when there are subcontracting possibilities. Small businesses are exempt.
Plans include goals for small, disadvantaged, women-owned, HUBZone and service-disabled veteran-owned businesses. That gives large primes a built-in reason to look for certified small firms.
SBA publishes a directory of prime contractors with subcontracting plans, a good list of companies to pitch.
Related terms
- 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.
- 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.
- 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%.
Put it to work
Looking for another term? Browse the full glossary or the government contracting glossary guide.