# How to Make $10M Federal Subcontracting | Business Development Roadmap

Feb 23, 2023

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Winning a prime contract with a federal agency can be hard if you're new to the federal government market.

Fortunately, subcontracting offers a lucrative path for many small businesses.

## **There are 3 Paths to Federal Revenue as a government contractor.**

- **Related training ["3 Paths to Federal Revenue – How to Win on Each Path"](https://youtu.be/fYAR8RqYgyg)**

If you are just getting established or if you just don't want to be a prime, you can still build a $10 million revenue stream by repeatedly subcontracting on existing federal contracts.

Subcontracting on a contract that is already awarded and managed by a prime contractor is a faster and easier path to federal revenue.

## Subcontracting by the Numbers

As the image shows, your company can subcontract under another small business, or you can subcontract for a large prime contractor.

Either way, the other company has the federal contract – you are just _on their team_.

**Subcontracting is right for you, if:**

1. you want to develop experience and build performance history  
2. you don't want the bureaucratic responsibilities required to manage a government contract

Prime contractors with awarded contracts frequently need specialized subcontractors and add FTEs to a project as often, and as long as necessary, to fulfil the government's needs and meet their deadlines.

How to Make $10M by Subcontracting on Federal Contracts | Neil McDonnell LinkedIn LIVE (2022) - YouTube

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[How to Make $10M by Subcontracting on Federal Contracts | Neil McDonnell LinkedIn LIVE (2022)](https://www.youtube.com/watch?v=aYBcR3XQUVA) [Neil McDonnell](https://www.youtube.com/channel/UCQJi8PLmFWs39tHazaldwOw)

### **REVENUE BY THE NUMBERS:**

- **FOCUS on only one federal agency, one core competency**
- **IDENTIFY** 10 potential teaming partners to build strategic relationships with
- **GOAL**: To secure 4 subcontracting opportunities _**per year per teaming partner** (total = 40 opportunities)_
- **Example for tech services company (double annual rate = annual rate)**  
  - _Average rate of $100 hours FTE = $200,000 annual_  
  - _5 FTE = $1M; 50 FTE = $10M_  
  - _Spread across 5 years = $2M per year_  
  - _Faster if your firm is larger_  
- _**Opportunity: 8a STARS III contract and subcontracting partners** ($50B contract vehicle with 1000 participating companies) The 8(a) STARS III GWAC is a small business set-aside contract that provides flexible access to customized IT solutions from a large, diverse pool of 8(a) industry partners. Learn more here **[8(a) STARS III Contract Overview](https://www.govconchamber.com/blog/8astarsiii)**_

###

## ROADMAP for SMALL BUSINESS SUBCONTRACTING | The easiest government contracts to win

To succeed in subcontracting, you must _hyper-focus_ on your strongest core competency and be able to communicate this expertise clearly.

01. **Determine your business maturity level**  
02. **Determine your core competency**  
03. **Primary Agency:** Choose only one agency to target  
04. **Primary Location:** Determine where you want to grow geographically  
05. **Contract Vehicles:** Determine which vehicles align to your target agency and core competency  
06. **Capability Statement:** Create a fresh statement highlighting your contribution to a partner’s team  
07. **Call Plan Template:** Follow a structured plan to standardize your call objectives and questions  
08. **SB POCs:** Research ideal small business partners  
09. **Large POCs:** Research ideal large business partners  
10. **Industry Day:** Attend industry days at target agency to learn and network  
11. **Intro Calls:** Schedule intro calls to begin new relationships  
12. **Regular Meetings:** Schedule recurring meetings every 2-3 weeks as appropriate  
13. **General NDA:** Once you start conversations with another firm, ask for a signed NDA  
14. **Supplier Portals:** Register in large prime and agency internal vendor databases  
15. **Identify Ops:** Bring opportunities to discuss with teaming partners  
16. **Open Reqs:** Research open positions with teaming partners to see where you might fit on their current contracts  
17. **Contract Vehicles:** Get on teaming partners contract vehicles  
18. **Reusable Content:** Create reusable content for proposals

- **WATCH** **[How To Build New Federal Relationships that Lead to More Contracting Revenue and Success](https://www.youtube.com/live/-GhKGph95Uc?feature=share "How To Build New Federal Relationships that Lead to More Contracting Revenue and Success")**