Prime Contractor
Also known as: Prime, prime awardee, contractor of record
What you do here: Hold the contract, self-perform the required share, and manage the subs
At a Glance
- Who it's for
- The certified SDVOSB that wins and signs the set-aside contract
- What it does
- Puts you in privity with the government — you own the deliverable and the risk
- Governing authority
- FAR 2.101 (definition); self-performance under FAR 52.219-14 / 13 CFR § 125.6
- Size / status effect
- You must be a small, certified SDVOSB at offer — and stay one through award
- Self-performance
- Must perform ≥50% of services / ≥15% of general construction (SSE work counts)
What It Is
The prime contractor is the entity that holds the contract directly with the government — the one in "privity" with the contracting officer. On an SDVOSB set-aside, the prime must be a certified service-disabled veteran-owned small business, and it carries the full legal responsibility for performance, quality, schedule, and compliance, even for work it hands to subcontractors. Being the prime is the whole point of a set-aside: it is where the set-aside dollars are counted and where the self-performance rules (the limitations on subcontracting in 13 CFR § 125.6, implemented by FAR 52.219-14) bite. The prime may subcontract, but it cannot subcontract away so much of the work that it becomes a pass-through — it must perform a minimum percentage of the contract itself, with the important exception that work given to similarly situated entities counts toward that self-performance.
When You Use It
- Whenever you win a set-aside in your own name — you are the prime and the government looks to you for everything.
- When you assemble a team of subcontractors to reach past your own capacity but keep control of the contract.
- When you must certify SDVOSB status: it is the prime's status that is certified and verified, at the time of the initial offer including price.
- As the counterpart to the subcontractor role — every subcontract runs from a prime, not directly to the government.
Key Features
| Feature | What It Means |
|---|---|
| Privity with the government | Only the prime has a contract with the government. Subcontractors have no direct claim against the government; they look to the prime, and the prime looks to the government. |
| Full performance responsibility | The prime is answerable for the entire contract, including work performed by subs — you cannot point at a sub to escape a default or a bad CPARS rating. |
| Self-performance floor | On a services set-aside the prime (plus similarly situated subs) must perform at least 50% of the cost; general construction is 15%, specialty trade construction 25%. Miss it and you violate FAR 52.219-14. |
| Status is the prime's | The SDVOSB certification that qualifies the award is the prime's. A subcontractor's veteran status does not make a non-SDVOSB prime eligible. |
| Flow-down duty | The prime must flow the mandatory FAR clauses down to its subcontractors and remains responsible for their compliance. |
The SDVOSB Angle
As an SDVOSB prime you capture the set-aside dollars and build the past performance that wins the next award — but you also carry the self-performance obligation. Before you build a team, model the limitations on subcontracting: every dollar you push to a subcontractor that is *not* similarly situated counts against your 50% (services) or construction floor. The winning move is to team with other certified SDVOSBs as similarly situated subs, because their labor counts as yours for the self-performance test while still expanding your reach.
How to Set It Up
- Confirm you are a certified SDVOSB in SBA VetCert and small under the solicitation's NAICS code before you offer.
- Map the statement of work and decide what you will self-perform versus subcontract.
- Run the limitations-on-subcontracting math so your teaming plan keeps you above the self-performance floor.
- Prefer similarly situated (small, SDVOSB) subcontractors for work you must count as self-performance.
- Put teaming and subcontract terms in writing and flow the required FAR clauses down to every sub.
Watch Out For
- Subcontracting out so much that you become a pass-through can violate FAR 52.219-14 and invite an ostensible-subcontractor / affiliation finding.
- The prime is on the hook for a sub's failures — a weak teammate becomes your default and your CPARS problem.
- Only the prime's SDVOSB status counts; a veteran-owned subcontractor does not qualify a non-SDVOSB prime for the set-aside.
- Eligibility is fixed at the time of the initial offer including price — you can't cure a size or status problem after the fact.
Run the Numbers
Frequently Asked
What is a prime contractor on a federal contract?
The prime contractor is the firm that holds the contract directly with the government and is legally responsible for the entire job, including work it subcontracts out. On an SDVOSB set-aside, the prime must itself be a certified service-disabled veteran-owned small business and must self-perform at least the minimum share the limitations on subcontracting (13 CFR § 125.6 / FAR 52.219-14) require.
Does a subcontractor's SDVOSB status help the prime qualify for a set-aside?
No. On an SDVOSB set-aside it is the prime's status that must be certified — a veteran-owned subcontractor does not make a non-SDVOSB prime eligible. However, if the subcontractor is a similarly situated entity (small and SDVOSB), the work it performs counts toward the prime's self-performance requirement under the limitations on subcontracting.
How much work must an SDVOSB prime perform itself?
For a services contract, the prime plus its similarly situated subcontractors must perform at least 50% of the cost of contract performance incurred for personnel. For general construction it is 15%, and for specialty trade construction 25%. For supplies, the prime must perform (or the SSE must supply) at least 50% of the cost of manufacturing, excluding materials. These are the limitations on subcontracting in 13 CFR § 125.6.
Primary Sources
- FAR 2.101 — Definitions (subcontract, prime)
- 13 CFR § 125.6 — Limitations on subcontracting
- FAR 52.219-14 — Limitations on Subcontracting (clause)
Plain-English reference, not legal advice. Teaming, joint-venture, affiliation, and subcontracting rules are fact-specific and the SBA regulations and FAR are amended from time to time — always read the current 13 CFR and FAR text, confirm the requirements with the contracting officer and your SBA resources, and consult qualified counsel before structuring a joint venture, teaming agreement, or subcontract you intend to rely on.
Change log (1)
- LaunchedPublished the federal teaming, joint venture & subcontracting arrangements reference covering how an SDVOSB works with other firms on a set-aside — the prime contractor and subcontractor roles, the FAR Subpart 9.6 contractor team arrangement (teaming agreement), the SDVOSB joint venture (13 CFR § 128.402), the SBA mentor-protégé joint venture (13 CFR § 125.9), the similarly situated entity that counts a sub's work as self-performance (13 CFR § 125.6), the ostensible subcontractor rule (13 CFR § 121.103(h)), general affiliation (13 CFR § 121.103), the small business subcontracting plan (FAR Subpart 19.7 / 52.219-9), and flow-down clauses (FAR 52.212-5 / Subpart 44.2) — each with an at-a-glance quick-facts card, a when-you-use-it list, a key-features table, an SDVOSB-specific angle, a how-to-set-it-up checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source citations, and cross-links into the glossary, regulation explainers, how-to guides, set-aside comparisons, FAQ, clauses, forms, and the limitations-on-subcontracting, subcontracting-goal, set-aside eligibility, and size-standard calculators.