Some of the largest contractors are, not coincidentally, some of the nation’s largest companies. Lockheed, Boeing, Raytheon and General Dynamics (all defense contractors) are the four largest government contracting companies and they earn about $80 billion a year from the government.
Fortunately, you don’t have to be a large or major corporation in order to get a government contract. The government has a set-asides contracting opportunities just for small businesses.
There are two types of contractors: Prime contractors are companies that directly earn the contract from the Federal Government and Subcontractors are companies that work for the prime contractor for a portion of the contracted work. A subcontractor is defined by Federal Acquisition Regulation (FAR) 3.502-1 as:
Any person, other than the prime contractor, who offers to furnish or furnishes any supplies, materials, equipment or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract and includes any person who offers to furnish or furnishes general supplies to the prime contract or a higher tier subcontractor.
Large prime contractors who have received federal contracts for goods and services other than construction, valued at more than $700,000, or for construction valued at more than $1.5 million, are required to establish plans and goals for subcontracting with small businesses.
So, you can be a subcontractor to provide your products or services to large corporations who will use them as a component of what they are providing to the government through their contract. As a subcontractor, your unique specialty can get incorporated into a much larger project where the government is the buyer. You don’t even have to know how to sell/bid with the government although any knowledge in this area only helps you and we recommend that you learn how to bid on projects on your own.
What you do have to know is your own business and what you can produce. You should also be comfortable with connecting with people at the large corporations so that you are able to introduce your products or services. Like many areas of business being able to build relationships will be a key component. If your business is Veteran or Woman-Owned, you have an edge.
When you are ready to go after subcontracting opportunities, I encourage you to utilize SubNet – The Small Business Administration’s (SBA) Subcontracting Network System. The Sub-Net system bridges the gap between large companies seeking small businesses and small businesses seeking contracting opportunities.
