Subcontracting allows small and disadvantaged businesses to substantially impact the federal procurement preference programs. Due to legislative mandates, federal prime contractors award billions of subcontracting dollars annually. Any federal contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses), will have the maximum practicable opportunity to participate in the contract consistent with its efficient performance. Furthermore, large prime contractors receiving a federal contract exceeding $650,000 ($1.5 million in the case of construction), and that offer subcontracting opportunities, must establish subcontracting plans with goals that provide opportunities to these small businesses.
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