As a fellow Service-Disabled Veteran-Owned Small Business (SDVOSB) owner, I remember the excitement (and confusion) of landing that certification. The big question many of us face is how to get started as an SDVOSB contractor in the federal marketplace. Should you jump in by bidding on contracts by yourself, or team up with more experienced companies on projects? In this post, I'll share guidance from experience and industry resources on both approaches – with a strong emphasis on why partnering on federal contracts is often the smartest first step. We'll compare teaming vs. bidding solo, discuss best practices for each route, outline common partnership structures (prime/sub, teaming agreements, joint ventures, mentor-protégé), and mention the types of partner companies new SDVOSBs often work with (from large primes like Booz Allen and Leidos to AEC firms, IT integrators, logistics contractors, etc.). By the end, you should have a clearer game plan for winning your first federal work – and I invite other members to share their experiences too!
If you're newly certified, you might be surprised how quickly bigger firms start reaching out. Many SDVOSBs begin their federal contracting journey not by winning a contract outright, but by joining a larger team as a subcontractor. In fact, it's common to get a call or email from a prime contractor or project management firm assembling subcontractors for a major proposal. There's a reason for this: Federal regulations encourage big primes to partner with small businesses. Any large contract above certain thresholds requires a subcontracting plan with goals for small business participation – including goals for veteran-owned and service-disabled veteran-owned small businesses. In other words, big primes need qualified SDVOSBs to meet their requirements, and they actively search for firms like yours to join their teams.
Teaming as a subcontractor tends to be a more realistic and successful path for new SDVOSBs than immediately pursuing prime contracts on your own. Why? For one, winning a prime contract as a newcomer is hard. You'd be managing everything and competing directly against established players with long past-performance histories. By contrast, subcontracting lets you participate in federal projects without dealing directly with the government. As the SBA explains, if you're not prepared to work with a federal agency as a prime, working under a prime contractor allows you to still get involved in federal procurements. You essentially “ease into” government contracting by letting the prime handle the heavy lifting of compliance, paperwork, and client management, while you contribute your piece of the work. This is a great way to learn the ropes and build past performance, with far less risk and bureaucracy up front.
Three common paths for a small business in federal contracting. The left road (“Sub under Small”) and right road (“Sub under Large”) represent teaming as a subcontractor – often the perfect path for a company that is just getting started, allowing access to opportunities set aside for small businesses. The middle road (“Prime with Agencies”) represents bidding as a prime contractor – a route typically pursued only after you have enough experience (years of past performance, contract management know-how, maybe security clearances and relationships) to handle direct contracts. As the graphic suggests, most new SDVOSBs will find partnering to be the best way to win SDVOSB work initially, until they gain the experience to confidently prime.
When you team up under a larger contract, your chances of success often increase. The prime brings the past performance, customer relationships, and contract vehicles; you bring niche expertise or a socio-economic credit (like SDVOSB status) that strengthens the team. In fact, subcontracting on an existing federal contract is widely regarded as the faster and easier path to break into federal revenue for small businesses. One small business expert notes that if you're just establishing yourself, you can grow to a multi-million-dollar revenue by repeatedly subcontracting – leveraging the prime’s contract win instead of trying to win it all yourself. By being a part of a winning team, you start getting project experience (and income) much sooner than if you spent months (or years) chasing a prime contract win.
Let's break down why partnering on federal contracts (i.e. joining a team as a sub) is often the smart play for a new SDVOSB:
In short, partnering lets you get your foot in the door quickly and relatively safely. It’s often the best way to win SDVOSB work when you’re new, because you’re plugging into an existing engine rather than trying to build your own from scratch.
To be clear, I’m not saying never go after prime contracts – just that you should be realistic about the timeline. Many SDVOSB owners (myself included) spent the first couple of years primarily as subcontractors, building a track record, before feeling ready to prime a contract. A popular infographic on government contracting paths shows that subcontracting (either under a small prime or a large prime) is “perfect for just getting started,” whereas engaging prime contracts directly usually makes sense “when you have [enough] federal experience, 3+ years of revenue, [and] strategic partners” in place. In practical terms, you might subcontract on a few projects, get some successful past performance and knowledge under your belt, and then start priming smaller contracts on your own in your niche.
The good news is that primes are actively looking for SDVOSB partners. Make yourself visible and attractive to them. Ensure your small business profiles are complete and up to date – especially your SAM.gov registration and SBA Dynamic Small Business Search (DSBS) profile. Large contractors do use DSBS to find small businesses, but they will only reach out if your profile clearly shows your capabilities and certifications. (Nothing turns a prime off like an empty DSBS entry.) Also, consider getting on relevant teaming lists or databases. For instance, SBA’s SUBNet is a database where large businesses post subcontracting opportunities for small firms – worth checking for leads.
Finally, network, network, network. Attend industry days, veteran business conferences, and matchmaking events. Many government agencies and big primes host outreach events for small businesses. (I personally found industry conferences incredibly useful – sometimes the prime’s small business liaison officer would literally invite us to bid as subs after a chat at our booth.) Large integrators like Booz Allen Hamilton and Leidos even sponsor small business forums and matchmaking sessions to identify new partners. For example, Booz Allen states that these networking forums have “resulted in many teaming agreements for specific procurements” they pursue. Leidos likewise hosts regular virtual events to connect with small businesses, which have been extremely successful in providing potential small partners exposure to Leidos program managers. The takeaway: put yourself out there, and you may find teaming opportunities come to you.
What about the other route – going after prime contracts on your own right away? Some SDVOSBs do attempt this from the start, especially if they have a very specific niche or prior experience they can leverage. It’s certainly possible to win contracts as a newcomer (particularly smaller ones or micro-purchases), and there are set-aside programs to help. Let’s examine the pros and cons of bidding solo, and how to improve your chances if you choose this path.
Pros of Priming on Your Own:
But there are significant Cons/Challenges:
Tips to Succeed as a Prime Contractor (If You Go Solo):
If you decide to pursue prime contracts early on, here are some best practices to improve your odds:
Many of these “solo” best practices overlap with what you’d eventually do after some teaming experience. The main point is, bidding solo is a higher stakes game for a new SDVOSB, so you must approach it very strategically. Some firms mix both approaches: maybe subcontract on a big contract for steady work, and simultaneously bid a few small primes on the side. That way you aren’t betting everything on uncertain proposals, but you’re also pushing to build your prime track record.
To summarize the discussion, here’s a side-by-side look at teaming as a subcontractor versus going it alone as a prime:
There’s no one-size-fits-all answer – some SDVOSBs will find a quick prime opportunity that fits them, while others will spend years subbing before priming. But in general, for most new SDVOSBs, partnering offers a gentler learning curve and more immediate opportunities to prove themselves. Think of it as starting as a “rookie” on a championship team vs. trying to be the star player on day one. Over time, your goal can be to graduate into a prime contractor in your own right, if that aligns with your business growth plans.
When we talk about “partnering” or “teaming,” it can actually take a few different forms. It’s useful to understand the structures of typical partnerships in federal contracting, so you can navigate opportunities correctly. Here are the main ones:
In summary, at the start you will likely be looking at prime-subcontractor relationships and teaming agreements (the least complex ways to team). As you mature, you might venture into JVs and mentor-protégé deals to go after bigger fish. It’s important to know these terms because people will throw them around in conversations. For instance, a contracting officer might ask if your proposal team is a JV or a prime-sub team; a fellow business owner might suggest you pursue a mentor-protégé with a certain large company. Understanding the landscape will help you make informed decisions and speak the lingo with confidence.
One of the great things about being an SDVOSB is that many different types of companies want to partner with you. Below are some common categories of partner companies and what they typically look for. As you network, keep an eye out for these potential collaborators:
In all cases, do your homework on potential partners. Whether it’s a Fortune 500 prime or a fellow SDVOSB, you want to partner with reputable companies that follow through on commitments. Look at their track record with small businesses. (Most large primes have a published small business contracting report or brag about their dollars to small biz – like the Leidos example above – which is a good sign.) When you partner, ensure that you get a fair workshare and that the partnership aligns with your long-term goals (e.g., learning new skills, accessing new customers, etc.). One of the best ways to win SDVOSB work is to latch onto partners who value what you bring and will help you grow.
We’ve touched on some of these already, but let’s concisely list a few best practices for successful teaming as a new SDVOSB contractor:
Finally, always be learning. Every proposal you participate in, every debrief you hear (win or loss), every project you deliver – extract lessons from it. Federal contracting has a lot of nuances, from how to price a bid to how to write a technical volume. Teaming allows you to observe how bigger players do it. Take those lessons and incorporate them into your own processes. Over time, you’ll evolve from the sub that needed guidance to the prime that leads contracts (and perhaps mentors other SDVOSBs!).
For a newly certified SDVOSB, the federal contracting arena can seem daunting – but remember, you’re not alone. Many of us have been exactly where you are, and we’ve found that starting out by partnering on federal contracts is often the prudent move. It doesn’t mean you lack ambition; it means you’re strategic about building strength before taking on larger battles. Teaming up (especially as a subcontractor to experienced primes) can provide the springboard you need to eventually win contracts of your own. Meanwhile, keep an eye on those smaller prime opportunities and be ready to seize them when the time is right.
In summary, SDVOSB teaming strategies like subcontracting, joint ventures, and mentor-protégé agreements can significantly increase your chances of success early on. They are usually the best way to win SDVOSB work when you’re just getting started, compared to going solo on day one. As you gain experience and past performance, you can progressively take on prime roles and even become a mentor to others.
I hope this overview gives you a solid game plan on how to get started as an SDVOSB contractor. Leverage your status, build partnerships, deliver excellent work, and the contracts will come. It’s a journey – one mission at a time.
Now, I’d love to hear from other SDVOSB owners and experienced federal contractors here on the forum: What was your approach starting out? Did you find teaming to be effective, or did you jump into priming? Any tips or “lessons learned” to add for our new members? Please share your stories and questions. Together, we can help every SDVOSB in this network thrive in the federal market!
Why Teaming is Often the
If you're newly certified, you might be surprised how quickly bigger firms start reaching out. Many SDVOSBs begin their federal contracting journey not by winning a contract outright, but by joining a larger team as a subcontractor. In fact, it's common to get a call or email from a prime contractor or project management firm assembling subcontractors for a major proposal. There's a reason for this: Federal regulations encourage big primes to partner with small businesses. Any large contract above certain thresholds requires a subcontracting plan with goals for small business participation – including goals for veteran-owned and service-disabled veteran-owned small businesses. In other words, big primes need qualified SDVOSBs to meet their requirements, and they actively search for firms like yours to join their teams.
Teaming as a subcontractor tends to be a more realistic and successful path for new SDVOSBs than immediately pursuing prime contracts on your own. Why? For one, winning a prime contract as a newcomer is hard. You'd be managing everything and competing directly against established players with long past-performance histories. By contrast, subcontracting lets you participate in federal projects without dealing directly with the government. As the SBA explains, if you're not prepared to work with a federal agency as a prime, working under a prime contractor allows you to still get involved in federal procurements. You essentially “ease into” government contracting by letting the prime handle the heavy lifting of compliance, paperwork, and client management, while you contribute your piece of the work. This is a great way to learn the ropes and build past performance, with far less risk and bureaucracy up front.
Three common paths for a small business in federal contracting. The left road (“Sub under Small”) and right road (“Sub under Large”) represent teaming as a subcontractor – often the perfect path for a company that is just getting started, allowing access to opportunities set aside for small businesses. The middle road (“Prime with Agencies”) represents bidding as a prime contractor – a route typically pursued only after you have enough experience (years of past performance, contract management know-how, maybe security clearances and relationships) to handle direct contracts. As the graphic suggests, most new SDVOSBs will find partnering to be the best way to win SDVOSB work initially, until they gain the experience to confidently prime.
When you team up under a larger contract, your chances of success often increase. The prime brings the past performance, customer relationships, and contract vehicles; you bring niche expertise or a socio-economic credit (like SDVOSB status) that strengthens the team. In fact, subcontracting on an existing federal contract is widely regarded as the faster and easier path to break into federal revenue for small businesses. One small business expert notes that if you're just establishing yourself, you can grow to a multi-million-dollar revenue by repeatedly subcontracting – leveraging the prime’s contract win instead of trying to win it all yourself. By being a part of a winning team, you start getting project experience (and income) much sooner than if you spent months (or years) chasing a prime contract win.
Benefits of Partnering on Federal Contracts as a New SDVOSB
Let's break down why partnering on federal contracts (i.e. joining a team as a sub) is often the smart play for a new SDVOSB:
- Higher Win Probability: A well-established prime contractor has the past performance and resources that make proposals very competitive. By riding that train as a team member, you share in the victory. Simply put, a small business hitching onto a strong prime’s bid has a better shot at winning than going solo. Subcontracting is a proven, lucrative path for many small firms – it lets you tap into contracts already awarded to someone else, which is generally a faster and easier way to start generating revenue in the federal market.
- Learn While You Earn: As a subcontractor, you get to learn the process without being thrown into the deep end alone. Your prime handles the direct dealings with the government – negotiating the contract, managing compliance, submitting reports – all the stuff that can be overwhelming at first. “Being a subcontractor permits you to participate... without dealing directly with the government” on all those fronts. This hands-on experience under a mentor-like prime is invaluable. You see how deliverables are managed, how federal clients communicate, how to navigate federal regs – all while delivering your piece of the work and building your past performance credentials.
- Lower Risk and Responsibility: The prime contractor carries the ultimate responsibility to the agency. If issues arise, the prime fixes them. Your job is to make the prime’s life easier by doing your part well. In return, you face less liability if something goes wrong at the project level. As one guide puts it, if you can help the prime fulfill the contract efficiently, on time, and with quality, you stand to create a long, rewarding relationship – all without bearing the full weight of the contract on your own shoulders.
- Past Performance and Network Building: Performing as a sub on federal projects gives you past performance references for future bids. You can cite the work (with permission) when you later pursue prime contracts or other teaming opportunities. Additionally, teaming expands your professional network. Every project is a chance to impress a prime contractor (and even the end customer, indirectly). Many primes will keep good SDVOSB subs in mind for future work. Over time, these relationships snowball, leading to more invites to join teams or even mentor-protégé opportunities. Essentially, you’re building a reputation in the industry as a reliable partner.
- Leveraging Set-Aside Advantages Indirectly: As an SDVOSB, you have an edge in the federal market through set-asides and goals. However, you might not immediately win a set-aside on your own. By teaming with a large firm, you still play a role in those socio-economic goals. Large primes often seek SDVOSB subs to fulfill subcontracting plan goals, since the government aims to award at least 5% of federal contracting dollars to SDVOSBs each year. In big “bundled” contracts (where agencies combine many tasks into one huge award), small businesses generally can’t bid as prime, but the winning large firms are usually “managers, not doers,” and must find capable small subs to do the work. This means huge opportunities for you as a sub. (For example, in one analysis, 37% of a major DoD prime contractors’ contract dollars went to small business subcontractors!)
- Revenue Without the Overhead: Being a prime means spending a lot on proposal prep, compliance systems, audits, etc. As a sub, you have fewer upfront costs in chasing work. You typically negotiate a scope and price with the prime, and you get to work. There’s no need for a massive business development budget just to land one subcontract. In many cases, subcontracts can even have higher profit margins because the prime absorbs much of the administrative overhead.
In short, partnering lets you get your foot in the door quickly and relatively safely. It’s often the best way to win SDVOSB work when you’re new, because you’re plugging into an existing engine rather than trying to build your own from scratch.
Realistic Expectations: Teaming First, Priming Later
To be clear, I’m not saying never go after prime contracts – just that you should be realistic about the timeline. Many SDVOSB owners (myself included) spent the first couple of years primarily as subcontractors, building a track record, before feeling ready to prime a contract. A popular infographic on government contracting paths shows that subcontracting (either under a small prime or a large prime) is “perfect for just getting started,” whereas engaging prime contracts directly usually makes sense “when you have [enough] federal experience, 3+ years of revenue, [and] strategic partners” in place. In practical terms, you might subcontract on a few projects, get some successful past performance and knowledge under your belt, and then start priming smaller contracts on your own in your niche.
The good news is that primes are actively looking for SDVOSB partners. Make yourself visible and attractive to them. Ensure your small business profiles are complete and up to date – especially your SAM.gov registration and SBA Dynamic Small Business Search (DSBS) profile. Large contractors do use DSBS to find small businesses, but they will only reach out if your profile clearly shows your capabilities and certifications. (Nothing turns a prime off like an empty DSBS entry.) Also, consider getting on relevant teaming lists or databases. For instance, SBA’s SUBNet is a database where large businesses post subcontracting opportunities for small firms – worth checking for leads.
Finally, network, network, network. Attend industry days, veteran business conferences, and matchmaking events. Many government agencies and big primes host outreach events for small businesses. (I personally found industry conferences incredibly useful – sometimes the prime’s small business liaison officer would literally invite us to bid as subs after a chat at our booth.) Large integrators like Booz Allen Hamilton and Leidos even sponsor small business forums and matchmaking sessions to identify new partners. For example, Booz Allen states that these networking forums have “resulted in many teaming agreements for specific procurements” they pursue. Leidos likewise hosts regular virtual events to connect with small businesses, which have been extremely successful in providing potential small partners exposure to Leidos program managers. The takeaway: put yourself out there, and you may find teaming opportunities come to you.
The Alternative: Bidding Solo as a Prime Contractor (Pros, Cons, and Tips)
What about the other route – going after prime contracts on your own right away? Some SDVOSBs do attempt this from the start, especially if they have a very specific niche or prior experience they can leverage. It’s certainly possible to win contracts as a newcomer (particularly smaller ones or micro-purchases), and there are set-aside programs to help. Let’s examine the pros and cons of bidding solo, and how to improve your chances if you choose this path.
Pros of Priming on Your Own:
- Full Control & Revenue: If you win a contract as the prime, you’re in the driver’s seat. You aren’t splitting the pie with a higher-tier contractor. You control execution, management, and you get direct credit from the government for the performance. For a growing business, a prime contract can be a game-changer – it gives you direct past performance with an agency and can significantly boost revenues and past performance record.
- Set-Asides and Sole-Source Opportunities: The federal government reserves many contracts exclusively for small businesses and for SDVOSBs. Competition is literally restricted to companies like yours. Agencies have a mandate to try to award at least 5% of contracting dollars to SDVOSBs, and they issue SDVOSB set-aside solicitations as well as occasional sole-source awards (direct one-vendor awards) when criteria are met. If you spot a solicitation that is a 100% SDVOSB set-aside in your field – and you believe you can meet the requirements – you have a much more level playing field to win it as a prime. In addition, if you build a relationship with an agency client, you might be able to secure a sole-source SDVOSB contract up to the legal threshold (typically $4 million for most services) if you are uniquely qualified. These opportunities exist only for primes, not subs.
- Reputation with the Customer: Being the prime contractor means your company is the one delivering to the government. If you do a great job, the agency knows your name, not just the prime’s. This can help you win more work directly with that agency (or others) in the future. Essentially, you’re building a direct client reference. Also, primes get performance evaluations in systems like CPARS, which are crucial for future bids. Subs typically do not get CPARS records (though you can still get a past performance reference via a letter or as a named team member). So winning as a prime starts your track record in the government’s databases.
- Growth and Scale: Sometimes, taking on prime contracts can accelerate your growth faster – if you can manage them successfully. Instead of waiting for a prime to dole out a small portion of work, you’re in charge of the whole effort (and can even subcontract out parts to others). This can mean more revenue and more employees hired under your company’s banner early on. Some SDVOSBs with strong backgrounds (say, retired senior officers with agency connections, or niche tech experts) do jump straight into significant prime wins. It can be done, and it can vault you ahead.
But there are significant Cons/Challenges:
- Steep Learning Curve: As a new prime, all the responsibilities fall on you. You must prepare the proposal (often a complex, weeks-long or months-long endeavor of writing and pricing). If you win, you then must manage the contract to the letter – handling invoicing in Wide Area Workflow, complying with Federal Acquisition Regulation clauses, managing any subcontracts you issue, meeting all deliverable deadlines, and dealing with issues like government inspections or audits. There is zero hand-holding. Mistakes can lead to losses or even contract termination. For a newbie, this can be overwhelming and costly. Many experienced folks say the first year or two in federal contracting is a full education. If you prime early, expect some trial by fire.
- Lower Win Probability (at first): Cold truth: a brand-new SDVOSB with no past performance record in federal contracting will find it difficult to win a competitive prime contract award. Even on SDVOSB set-asides, you might be up against other veteran-owned firms that have been around longer or incumbents converting a contract from large to small business. Agencies look for evidence that you can do the job – prior similar projects, relevant corporate experience, proven financial and management capability. If you lack those, you’ll need a stellar proposal strategy to compensate (e.g. key personnel resumes that shine, or strong commercial past performance). It’s not impossible, but be prepared for an uphill battle. Industry stats often show that it can take 12-24 months for a small business to win its first prime contract. Meanwhile, you could potentially have been earning as a sub in that time.
- Resource Intensive: Bidding on contracts isn't free – it takes time and money. Writing proposals, paying proposal writers or consultants, traveling to meet clients, etc., are all business development costs with uncertain ROI. If you win, some contracts are fixed-price (risk on you to deliver within budget) or cost-reimbursement (heavy auditing of your costs). You also need proper accounting systems for federal work, possibly security clearances, insurance, and other infrastructure. These represent significant overhead for a very small company to absorb. Subcontractors, by comparison, often face less stringent requirements (the prime might shield them from some compliance burdens).
- Performance Risks and Regulations: As a prime SDVOSB on a set-aside, you must abide by the “Limitations on Subcontracting” rule – meaning you cannot subcontract out all the work to someone else (otherwise a large company could misuse a small business as a front). Generally, for services contracts you must perform at least 50% of the labor cost with your own staff (less for construction trades). So you need to have enough capability in-house to do that share. Also, if you have a large subcontractor helping you, beware of the ostensible subcontractor rule (the government may scrutinize if your large sub is actually doing the “primary” work). In short, when you prime, you need to truly lead the project. If things go wrong, all fingers point to you. This level of risk is something to carefully consider when you’re still a small operation.
Tips to Succeed as a Prime Contractor (If You Go Solo):
If you decide to pursue prime contracts early on, here are some best practices to improve your odds:
- Start Small: Target small contracts or task orders that match your size and experience. This could mean contracts under the Simplified Acquisition Threshold (<= $250k) or small business set-asides where the scope is manageable. Micro-purchases or simplified acquisitions often have less stringent proposal requirements. Even a $50K contract win gets you on the board and gives you a reference. Don’t swing for a $10M multi-year contract as your very first job – that’s like trying to climb Everest before a practice hike.
- Leverage Your Unique Strengths: If you have a particular niche expertise or technology that few others have, highlight that relentlessly. Your proposal should show why the government gets more value or less risk by choosing you. Being an SDVOSB alone is usually not enough – you need to solve the agency’s problem better, faster, or cheaper. Focus on your core competencies and make them clear. As one subcontracting expert advises small firms, “hyper-focus on your strongest core competency and be able to communicate it clearly” – that applies to primes too.
- Build Past Performance Creatively: If you lack direct federal past performance, use related experience – commercial projects, state/local government work, or even key personnel experience (what your team members did at previous jobs) – to demonstrate capability. You can also consider partnering even as a prime: perhaps team with another small business (through a subcontractor or a teaming agreement) that brings complementary past performance. Just remember the “similarly situated” rule: a sub that is also an SDVOSB is treated like yourself for performance calculation, which can help meet the 50% requirement (mentor-protégé joint ventures use this a lot; more on that soon).
- Use Mentor-Protégé or Joint Ventures: One way to bolster your strength as a prime is via the SBA Mentor-Protégé Program (MPP). Under this program, you can partner with a larger mentor company and even form a joint venture that can bid on contracts as an SDVOSB (so long as you, the protégé, are SDVOSB-qualified). The mentor can assist you with everything from business systems to financing to navigating the bid process. A mentor-protégé JV is a powerful tool: it lets you go after bigger contracts as a prime while still counting as a small business team. Just be aware it requires an SBA-approved agreement and close compliance with JV rules. Many SDVOSBs have used this to graduate to priming larger opportunities successfully.
- Invest in Proposal Expertise: If writing winning proposals is not your forte (and for most of us, it’s an acquired skill), invest in help. This could mean hiring a proposal consultant or a business development coach who knows federal contracting. They can guide you on proposal structure, pricing strategy, and how to address evaluation criteria. A polished, compliant proposal can make a world of difference, especially when you don’t have a long track record to lean on.
- Engage Agency Small Business Offices: When targeting an agency, get to know their Small Business Specialist (each agency and major command has one). Introduce your company, ask about upcoming SDVOSB opportunities, go to their outreach events. These officials can’t play favorites, but they can provide valuable guidance on navigating their organization and sometimes even facilitate introductions or market your capabilities internally. Showing that you’re an active, interested vendor can put you on the radar when a quick-turn need arises.
- Be Prepared to Be the Prime: This sounds obvious, but it means having the infrastructure and mindset ready. Get your accounting system in line with federal standards (DCAA compliance if needed for cost contracts). Have project management practices in place. Ensure you can obtain the necessary bonding (for construction) or insurance. In short, present yourself like a prime contractor in your proposals and meetings – organized, accountable, and solution-oriented. The government needs confidence that even though you’re small, you can manage big responsibilities.
Many of these “solo” best practices overlap with what you’d eventually do after some teaming experience. The main point is, bidding solo is a higher stakes game for a new SDVOSB, so you must approach it very strategically. Some firms mix both approaches: maybe subcontract on a big contract for steady work, and simultaneously bid a few small primes on the side. That way you aren’t betting everything on uncertain proposals, but you’re also pushing to build your prime track record.
Joining a Team vs. Bidding Solo: A Quick Comparison
To summarize the discussion, here’s a side-by-side look at teaming as a subcontractor versus going it alone as a prime:
- Chance of Winning: Teaming – Leverages the prime’s past performance and existing contract vehicles, so higher chance for a newbie to get on a winning team. Solo – You’re starting from scratch, which is tougher; expect a longer lead time to your first win (often many months or more).
- Work Scope & Responsibility: Teaming – You handle only your defined scope; the prime manages the overall contract and client interface. You face less administrative burden (e.g. fewer reports, no direct audits). Solo – You are responsible for 100% of contract performance to the government. All admin, reporting, and compliance duties fall on you (and any subs you manage).
- Risk and Liability: Teaming – Lower risk. If the project has issues, the prime usually must fix them or deal with consequences. Your risk is mainly completing your tasks and getting paid by the prime. Solo – High risk. If something goes wrong, your company could face negative past performance or even default. You also carry financial risk (e.g. a fixed-price contract that goes over budget comes out of your hide).
- Reward and Profit: Teaming – You get only a slice of the pie (your subcontract value), and the prime usually includes their markup. However, your costs are lower (no huge proposal expense), and margins can actually be healthy with less overhead. Solo – You keep the whole contract value (and can even subcontract parts out), but you also incur all the costs of pursuit and management. A successful prime win can greatly boost revenue, but the profit depends on how well you execute within budget.
- Building Credentials: Teaming – Yields past performance indirectly. You can cite it, though you may need to explain your role. You also gain references from primes. It’s a stepping stone for credibility. Solo – Yields official past performance in government databases and a direct client satisfaction record, which is gold for future bids. But you need to win first to get this benefit.
- Relationships: Teaming – You develop strong B2B relationships (with primes and possibly other subs). A happy prime can lead to lots of future work and maybe a formal mentor-protégé relationship. Solo – You develop direct agency relationships. You become “known” to the government customer, which can lead to more direct awards or recommendations. Ideally, you want to eventually cultivate both types of relationships.
There’s no one-size-fits-all answer – some SDVOSBs will find a quick prime opportunity that fits them, while others will spend years subbing before priming. But in general, for most new SDVOSBs, partnering offers a gentler learning curve and more immediate opportunities to prove themselves. Think of it as starting as a “rookie” on a championship team vs. trying to be the star player on day one. Over time, your goal can be to graduate into a prime contractor in your own right, if that aligns with your business growth plans.
Understanding Common Teaming Structures (Prime-Sub, Teaming Agreements, JVs, Mentor-Protégé)
When we talk about “partnering” or “teaming,” it can actually take a few different forms. It’s useful to understand the structures of typical partnerships in federal contracting, so you can navigate opportunities correctly. Here are the main ones:
- Prime Contractor & Subcontractor: This is the most straightforward. The prime holds the contract with the government and is the one accountable to the agency. A subcontractor works under the prime, via a separate agreement between prime and sub. The sub delivers a portion of the work or supplies to help the prime fulfill the contract. As noted earlier, the government often requires large primes to use small business subs, which creates opportunities for SDVOSBs. In this arrangement, you (the SDVOSB) would typically be the subcontractor to a larger prime, at least initially. All your dealings are with the prime; you usually do not communicate with the government customer except informally on the ground. This model is very common and relatively simple – you just need a good subcontract agreement in place. (Tip: Always sign a subcontract agreement that clearly states your scope, deliverables, payment terms, etc., when joining a prime’s team after a win.)
- Teaming Agreement (Pre-Contract): Before a contract is won – often during the proposal stage – companies may sign a teaming agreement. This is basically a promise: “If we (the team) win the contract, we agree that Company A will be the prime contractor and will give Company B a subcontract for XYZ scope of work (often a certain percentage of the effort).” Teaming agreements lay out roles and exclusivity (e.g. the sub agrees not to join another competing team for that bid). They are not binding contracts for the work itself (since the work isn’t won yet), but they show commitment. As a new SDVOSB, you’ll likely sign teaming agreements with primes as you join their bid efforts. It ensures that if your team wins, you have a defined piece of the pie. Keep in mind, a teaming agreement must be followed by an actual subcontract after award. Also, for set-aside contracts, the teaming partner usually must be a “similarly situated” small business or else the prime must still meet the limitations on subcontracting rules themselves – but that's the prime’s issue to manage. From your perspective, teaming agreements are a ticket to join the ride on a proposal.
- Joint Venture (JV): A joint venture is a more formal partnership where two or more companies create a separate legal entity or an official partnership to bid on and perform a contract together. In federal contracting, JVs are often used when two small businesses team up, or when a large and small business want to work together on a small business set-aside in a mentor-protégé relationship. For SDVOSB purposes, a JV can qualify as an SDVOSB if it meets certain criteria. Specifically, if an SDVOSB teams with another company (large or small) under SBA’s Mentor-Protégé program, their JV is considered a small business and can go after SDVOSB set-aside contracts. JVs require a written JV agreement and sometimes have to be approved by SBA (for 8(a) or mentor-protégé JVs). The JV might be structured as an LLC or partnership just for that contract. In practice, JVs are like forming a temporary new company that combines the partners’ resources. The SDVOSB usually has to be the managing venturer in an SDVOSB JV (controlling 51% of the JV and its decisions) to comply with rules. JVs can be powerful if you, as an SDVOSB, want to prime a larger contract but need a big partner’s backing – with a JV, you bid together as one. But be mindful of the administrative overhead (separate entity tax returns, banking, etc.) and the need to clearly split responsibilities. Many veteran business owners use JVs once they have a bit more experience, or when entering a mentor-protégé deal.
- Mentor-Protégé Arrangements: The U.S. SBA runs the All Small Mentor-Protégé Program (MPP), which SDVOSBs can use to their advantage. In a mentor-protégé relationship, your SDVOSB is the protégé and you find a larger company (could be a big prime or even a larger small business) to be your mentor. The mentor provides various forms of assistance – strategic guidance, back-office support, possibly business development help, even financial investment – to help your business grow. The big carrot here is what we mentioned: an SBA-approved mentor-protégé pair can form a JV that is eligible for small business contracts (including SDVOSB set-asides). This is how, for example, an SDVOSB with maybe $1M in revenue can team up with a Fortune-500 defense contractor to bid a huge contract as an SDVOSB JV – perfectly legally. The mentor-protégé program also has benefits like mentor eligibility for subcontracting credit, etc. Outside SBA’s program, some agencies (like DoD) had their own mentor-protégé programs, but they mostly align with SBA’s now. If you find a willing mentor, definitely explore this – it can accelerate your learning and lead to big opportunities. (As a real-world example, Leidos – a large prime – has been recognized for its Mentor-Protégé work with SDVOSBs; Leidos and its SDVOSB protégé SureSecure Solutions won NASA’s Mentor-Protégé Agreement of the Year Award in 2021. That shows mentors do invest in helping SDVOSBs succeed.)
In summary, at the start you will likely be looking at prime-subcontractor relationships and teaming agreements (the least complex ways to team). As you mature, you might venture into JVs and mentor-protégé deals to go after bigger fish. It’s important to know these terms because people will throw them around in conversations. For instance, a contracting officer might ask if your proposal team is a JV or a prime-sub team; a fellow business owner might suggest you pursue a mentor-protégé with a certain large company. Understanding the landscape will help you make informed decisions and speak the lingo with confidence.
Types of Companies New SDVOSBs Can Partner With (Examples)
One of the great things about being an SDVOSB is that many different types of companies want to partner with you. Below are some common categories of partner companies and what they typically look for. As you network, keep an eye out for these potential collaborators:
- Large Prime Contractors (Defense & IT Integrators): These are big players like Booz Allen Hamilton, Leidos, Lockheed Martin, Northrop Grumman, Raytheon, General Dynamics, etc., who regularly lead multi-million and billion-dollar federal contracts. They often need SDVOSB subs to meet subcontracting goals and to bring specialized skills. For example, Booz Allen notes that small businesses enhance their competitive edge and performance, and they constantly seek out qualified SDVOSBs for teaming and subcontracting opportunities. Leidos similarly has an award-winning small business program, working with SDVOSBs in areas like cybersecurity, engineering, and logistics – in 2022 Leidos subcontracted **$1.9 billion to small and diverse businesses (39% of their spend) and emphasizes “promoting strategic teaming” with small firms. The takeaway: Big primes are actively hunting for capable SDVOSB partners. If your skills align with their contract needs, they can be excellent partners. Find their small business liaison officers (SBLOs) or supplier portals and get on their radar.
- AEC Firms (Architecture, Engineering, Construction): Large AEC and construction firms (think Jacobs, AECOM, Fluor, KBR, Gilbane, Hensel Phelps, etc.) often have federal contracts for infrastructure, military bases, VA hospitals, etc. They look for small business subcontractors for trades, design specialties, environmental services, and more. An SDVOSB construction or engineering firm might start as a sub doing, say, electrical work or environmental assessments on a VA hospital project under a big general contractor. Many AEC primes also pursue SDVOSB set-aside design-build projects by teaming with SDVOSB firms in a JV or as lead designers, due to veterans’ preference in agencies like VA and Army Corps.
- Professional Services & Program Management Firms: There are mid-tier and large consulting firms that specialize in managing federal programs, often needing teams of diverse skillsets. Examples include firms like Deloitte (government practice), Accenture Federal, CACI, SAIC, Perspecta (now part of Peraton), and many others that provide project management support, acquisition support, or staffing to agencies. These integrators frequently require niche small businesses on their teams – e.g., a specialized IT SDVOSB to handle a cybersecurity task on a DHS program, or an SDVOSB management consulting firm to help on a VA program management support contract. They appreciate small teammates who are agile and bring subject matter experts. Also included here are contract staffing firms who might win large outsourcing contracts and need lots of subcontracted personnel (if you provide niche staffing, you could plug into those contracts).
- IT Systems Integrators and Software Companies: Tech-focused primes, big or small, often partner with SDVOSBs especially if the project has a veteran-centric element (like VA health IT) or requires certain clearances. A company like Microsoft, IBM, or Oracle (through their federal divisions or partner networks) might partner with an SDVOSB on delivering a solution to the government. Likewise, smaller FedTech firms sometimes seek SDVOSB joint ventures to go after set-aside tech contracts. If you’re in IT, look for larger vendors who have small business partner programs.
- Logistics and Facilities Support Primes: There are large firms handling logistics, transportation, base operations, and facility management for DoD and other agencies (e.g., Vectrus, PAE (now Amentum), Sodexo, UPS Supply Chain, etc.). They often subcontract portions of work like warehousing, transportation, maintenance, or supply services to SDVOSBs. For instance, an SDVOSB trucking company might carry a portion of a Defense Logistics Agency delivery contract under a big prime. Or an SDVOSB facilities firm might maintain some buildings as a sub to a base operations support contract. If your business is in these operational areas, target the primes that hold those mega-contracts.
- Other SDVOSBs and Small Businesses: Yes, your peers can be partners too! Sometimes a group of small businesses forms a team to pursue an opportunity together, especially if it’s a total small business set-aside. One might be prime, others subs; or they create a joint venture. For example, two SDVOSBs might team up – one has IT expertise, the other has admin support services – to jointly bid on a broad VA support contract. This way they cover more ground together. These are basically consortium teams. Just remember, if none of you have much experience, it can be the blind leading the blind; but if each brings something solid, it can work. Also, an 8(a) or HUBZone firm might team with an SDVOSB if a contract has multiple socio-economic goals or to leverage each other’s statuses.
In all cases, do your homework on potential partners. Whether it’s a Fortune 500 prime or a fellow SDVOSB, you want to partner with reputable companies that follow through on commitments. Look at their track record with small businesses. (Most large primes have a published small business contracting report or brag about their dollars to small biz – like the Leidos example above – which is a good sign.) When you partner, ensure that you get a fair workshare and that the partnership aligns with your long-term goals (e.g., learning new skills, accessing new customers, etc.). One of the best ways to win SDVOSB work is to latch onto partners who value what you bring and will help you grow.
Teaming Best Practices for New SDVOSBs
We’ve touched on some of these already, but let’s concisely list a few best practices for successful teaming as a new SDVOSB contractor:
- Polish Your SAM/DSBS Profile: This is your online calling card for federal work. Make sure your System for Award Management (SAM) registration is active and that your Dynamic Small Business Search (DSBS) profile is complete with your SDVOSB status, keywords, past project summaries, and points of contact. Large primes do search DSBS to find partners; they filter by SDVOSB and NAICS codes. According to the SBA, primes use DSBS regularly, so “ensure that your profile in DSBS is complete including socioeconomic certifications, a capabilities narrative, keywords, NAICS codes, and performance history.” A robust profile can lead a prime to your doorstep.
- Create a Capabilities Statement: This is a 1-2 page marketing slick that highlights your company’s core capabilities, past experiences, differentiators, and contact info. It’s the resume for your business. Tailor it for the federal audience: include your DUNS/UEI, CAGE code, NAICS, contract vehicles (if any), and socio-economic badges (SDVOSB, etc.). Have this ready to email or hand out at events. A good “cap statement” can make a strong first impression on a prime.
- Network and Market Aggressively: As mentioned, attend those matchmaking and industry events. Talk to primes’ small business reps. Leverage any veteran business networks (like the SDVOSB Chamber or local veterans business events). If walking the halls at trade shows isn’t your thing, at least connect on platforms like LinkedIn – follow and engage with the big primes’ small business outreach posts. Many deals come from simply being in the right place at the right time and speaking up about your capabilities. Also utilize resources like your regional APEX Accelerator (formerly PTAC) – they often host events and can introduce you to agency buyers or primes looking for partners.
- Deliver Value and Reliability: Once you do get on a team, knock it out of the park. Deliver quality work, communicate clearly, and be a team player. Your goal is to make the prime look good to the customer. If you achieve that, the prime will likely invite you to future contracts. As the Wolters Kluwer guide emphasized, “if you can make a prime's life easier” by doing your job well and on time, you greatly increase your chances of a long-term partnership. Become known as the SDVOSB who always delivers and causes zero headaches – you’ll have more work than you can handle.
- Understand Your Subcontract: When you engage with a prime, ensure you review the subcontract terms carefully. Pay attention to delivery schedules, payment terms (e.g., pay-when-paid clauses), and any flow-down federal clauses you must follow. It’s okay to negotiate a bit, especially around payment timing (small businesses need cashflow!). Also clarify how past performance will be handled – can you cite the work in the future? Will the prime acknowledge your role in CPARS or in a reference? Building a trusting relationship is key, but always protect your business interests by having clear agreements.
- Consider Formal Partnerships Early: Even as a newcomer, you can start exploring mentor-protégé relationships or strategic alliances. If there’s a prime you clicked with, ask if they have a mentor-protégé program (many large companies do, like Booz Allen and Leidos have formal processes. Being taken under the wing of a big firm through MPP can fast-track your learning and credibility. Similarly, don’t shy from joining forces with other small businesses when it makes sense – maybe you have one half of a solution and another SDVOSB has the other half; together you win. These partnerships can be done via JV or just subcontracting to each other.
- Stay Compliant and Up-to-date: Ensure you maintain your SDVOSB verification (no lapses in status), stay current on any relevant certifications (like 8(a) if you have it, or ISO if required in your industry), and follow laws applicable to federal contractors (for instance, don’t run afoul of procurement integrity or ethics rules when communicating with federal officials). A prime will be more comfortable teaming with you if you clearly understand the “rules of the game.” Simple example: know that you cannot lobby for a sole-source by taking a contracting officer to golf (ethics violation!). Show that you’re a serious, professional outfit.
Finally, always be learning. Every proposal you participate in, every debrief you hear (win or loss), every project you deliver – extract lessons from it. Federal contracting has a lot of nuances, from how to price a bid to how to write a technical volume. Teaming allows you to observe how bigger players do it. Take those lessons and incorporate them into your own processes. Over time, you’ll evolve from the sub that needed guidance to the prime that leads contracts (and perhaps mentors other SDVOSBs!).
Conclusion: Your Path Forward & Invite to Share Experiences
For a newly certified SDVOSB, the federal contracting arena can seem daunting – but remember, you’re not alone. Many of us have been exactly where you are, and we’ve found that starting out by partnering on federal contracts is often the prudent move. It doesn’t mean you lack ambition; it means you’re strategic about building strength before taking on larger battles. Teaming up (especially as a subcontractor to experienced primes) can provide the springboard you need to eventually win contracts of your own. Meanwhile, keep an eye on those smaller prime opportunities and be ready to seize them when the time is right.
In summary, SDVOSB teaming strategies like subcontracting, joint ventures, and mentor-protégé agreements can significantly increase your chances of success early on. They are usually the best way to win SDVOSB work when you’re just getting started, compared to going solo on day one. As you gain experience and past performance, you can progressively take on prime roles and even become a mentor to others.
I hope this overview gives you a solid game plan on how to get started as an SDVOSB contractor. Leverage your status, build partnerships, deliver excellent work, and the contracts will come. It’s a journey – one mission at a time.
Now, I’d love to hear from other SDVOSB owners and experienced federal contractors here on the forum: What was your approach starting out? Did you find teaming to be effective, or did you jump into priming? Any tips or “lessons learned” to add for our new members? Please share your stories and questions. Together, we can help every SDVOSB in this network thrive in the federal market!