# Teaming and subcontracting

> How to work under a prime, how teaming agreements and joint ventures work, and the limits on subcontracting that protect set-asides.

Last verified October 2026. Page: https://victavio.com/learn/teaming-and-subcontracting

You do not have to start as the prime. Many businesses get their first government work as a subcontractor. It builds a record, teaches you the process, and lets a larger company carry much of the paperwork.

## Ways to work together

**Subcontract.** You do part of the work for a prime contractor. Your contract is with the prime, not the government, and the prime pays you.

**Teaming agreement.** Two or more companies agree to pursue a specific contract together, usually with one as the prime and the others as subcontractors. The government recognizes these arrangements. A good agreement says who does what, how the work is split, who talks to the government (usually the prime), and whether either side may team with others on the same bid.

**Joint venture.** Two or more businesses form a joint venture to pursue specific contracts. SBA has rules on when a joint venture of small businesses counts as small and can bid on set-asides.

**Mentor-protege.** SBA's mentor-protege program pairs an experienced firm with a small business. Approved pairs can form joint ventures that bid on set-asides, under specific rules.

Have an attorney review any teaming agreement, joint venture or mentor-protege agreement before you sign it.

## The limits on subcontracting

Set-asides exist so small businesses do the work. So the prime on a set-aside has limits:

- **Services:** the prime may pay no more than 50% of what the government pays it to subcontractors that are not similarly situated.
- **Supplies and construction** have their own limits, written in the same clause.

A similarly situated subcontractor holds the same status as the prime, such as another small business on a small business set-aside. Work it performs with its own employees generally does not count against the limit.

**Most 1099 contractors count as subcontractors.** Under SBA rules, work by an independent contractor generally counts as subcontracted unless that person would be treated as your employee for size purposes. Record who is a W-2 employee and who is a 1099 contractor before you price a job.

A prime that cannot explain its own contract without its subcontractor on the call worries contracting officers. Know your part of the work.

## Where primes look for subcontractors

Large businesses with federal contracts above $900,000 ($2 million for construction) generally must have a small business subcontracting plan with goals. They look for capable small firms. Ways to find them:

- Award notices on SAM.gov and past awards on USAspending.gov show who wins work like yours.
- Many large primes run supplier registration portals.
- Agency small business offices and industry days connect primes with small firms.
- APEX Accelerators can help with matchmaking.

## Reaching out to a prime

Keep the first message short: who you are, the notice, the part of the work you can do, one or two proof points, and a request for a 15-minute call. Send it yourself, one company at a time, from your own email. Business email rules apply, including the CAN-SPAM Act, so include your business address and stop if they ask you to.

## After an award

If you lose a bid, contact the winner. Congratulate them and offer to help as a subcontractor if they need it. New winners sometimes need help fast.

## In Victavio

Notices set aside for a status you do not hold appear in "Team up or watch". Each notice's Past awards section shows firms that won similar work from that buyer, according to USAspending.gov.

## Official sources
- [FAR Subpart 9.6: Contractor team arrangements](https://www.acquisition.gov/far/subpart-9.6)
- [FAR 52.219-14: Limitations on subcontracting](https://www.acquisition.gov/far/52.219-14)
- [13 CFR 125.6: Prime contractor's limitations on subcontracting](https://www.ecfr.gov/current/title-13/chapter-I/part-125/section-125.6)
- [FAR 19.702: Subcontracting plan requirements](https://www.acquisition.gov/far/19.702)
- [SBA: Prime and subcontracting](https://www.sba.gov/federal-contracting/contracting-guide/prime-subcontracting)
- [SBA: Mentor-Protege program](https://www.sba.gov/federal-contracting/contracting-assistance-programs/sba-mentor-protege-program)
- [FTC: CAN-SPAM Act compliance guide for business](https://www.ftc.gov/business-guidance/resources/can-spam-act-compliance-guide-business)

This lesson is general information, not legal advice. Rules change. Check the official source before you act.
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