Subcontractor
Also known as: Sub, lower-tier contractor, teaming partner (sub role)
What you do here: Perform a defined slice of the work under contract to the prime, not the government
At a Glance
- Who it's for
- A firm doing part of the work under agreement with the prime (or a higher-tier sub)
- What it does
- Adds capability/capacity to a team without the sub joining the prime's contract
- Governing authority
- FAR Subpart 44.2; flow-downs under FAR 52.244-6 / 52.212-5
- Size / status effect
- No privity with the government; the sub's status counts only if it is a similarly situated entity
- Payment
- Paid by the prime under the subcontract, not by the government
What It Is
A subcontractor is a firm that performs some portion of the work under an agreement with the prime contractor (or a higher-tier subcontractor) rather than directly with the government. There is no privity between a subcontractor and the government: the sub's customer is the prime, the prime pays the sub, and the prime remains responsible to the government for the sub's work. Subcontracting is the ordinary way a prime assembles the skills and capacity a solicitation demands. For an SDVOSB, subcontracting cuts both ways — as a prime you use subs to reach past your own headcount, and as a sub you can perform federal work on a larger firm's contract without holding the prime award yourself. What the sub's role does *not* do, by itself, is transfer the prime's set-aside status: a veteran-owned sub does not qualify a non-SDVOSB prime, and a sub's work only counts toward the prime's self-performance floor when the sub is a similarly situated entity.
When You Use It
- When a prime needs a capability, clearance, geographic footprint, or surge capacity it doesn't have in-house.
- When an SDVOSB wants to perform federal work but isn't ready or eligible to prime the requirement.
- When a large prime must meet small-business subcontracting goals and seeks SDVOSB subcontractors.
- As the building block of a teaming agreement — most teaming arrangements are prime-plus-subcontractors.
Key Features
| Feature | What It Means |
|---|---|
| No government privity | The sub contracts with the prime, not the government. It generally cannot bring a claim directly against the government and looks to the prime for payment and direction. |
| Prime stays responsible | The government holds the prime accountable for subcontractor performance — the prime manages, inspects, and answers for its subs. |
| Flow-down clauses | The prime must pass mandatory FAR clauses down into the subcontract (FAR 52.244-6 for commercial items lists the required flow-downs). |
| Counts as self-performance only if SSE | A subcontractor's labor counts toward the prime's limitations-on-subcontracting floor only if the sub is a similarly situated entity — small and holding the same set-aside status. |
| Consent to subcontract | On some contract types the prime needs the contracting officer's consent for certain subcontracts (FAR 44.201-1), especially cost-reimbursement work. |
The SDVOSB Angle
For a growing SDVOSB, the subcontractor role is the on-ramp: you perform on a bigger firm's contract, earn past performance, and learn the customer before you prime. When you *are* the prime, choose subs deliberately — a similarly situated (small, SDVOSB) sub's work counts as your own self-performance, while a large or non-SDVOSB sub's work counts against your 50% floor. Track your subcontract dollars the way the government will: as a percentage of the work you did *not* self-perform.
How to Set It Up
- Define the sub's scope, deliverables, price, and schedule in a written subcontract before performance starts.
- Confirm whether the sub is a similarly situated entity if you're counting its work toward self-performance.
- Flow the mandatory FAR clauses down (see FAR 52.244-6 / 52.212-5) and any solicitation-specific requirements.
- Get the contracting officer's consent to subcontract where the contract requires it.
- Keep records tying each subcontract dollar to the limitations-on-subcontracting calculation.
Watch Out For
- A sub that performs the primary and vital work of the contract can trigger the ostensible subcontractor rule and affiliate you.
- Over-reliance on one subcontractor for the core scope is a classic size-protest and pass-through risk.
- A veteran-owned subcontractor does not confer SDVOSB eligibility on the prime — only the prime's status counts.
- Failing to flow down a required clause leaves the prime — not the sub — exposed to the government.
Run the Numbers
Frequently Asked
What is the difference between a prime contractor and a subcontractor?
The prime holds the contract directly with the government and is responsible for the entire job. A subcontractor performs part of the work under an agreement with the prime and has no direct contract (privity) with the government — the prime is the sub's customer and pays the sub. On a set-aside, only the prime's socioeconomic status qualifies the award.
Can an SDVOSB subcontract count toward the prime's self-performance requirement?
Only if the subcontractor is a similarly situated entity — meaning it is a small business and holds the same set-aside status as the prime (SDVOSB on an SDVOSB set-aside). Work performed by a similarly situated subcontractor is not counted as subcontracted for purposes of the limitations on subcontracting in 13 CFR § 125.6; it counts as the prime's own performance.
Do subcontractors get paid by the government?
No. Subcontractors are paid by the prime contractor under the subcontract terms, not by the government. Because there is no privity, a sub generally cannot invoice or sue the government directly. This is why subcontract payment terms — and the prime's financial health — matter so much to a subcontractor's cash flow.
Primary Sources
- FAR Subpart 44.2 — Consent to Subcontracts
- FAR 52.244-6 — Subcontracts for Commercial Products and Services
- 13 CFR § 125.6 — Limitations on subcontracting
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.