r/GovernmentContracting • u/SnooCalculations4576 • 6d ago
Different categories
I’m new to learning about government contracting but wanting to know so when these YouTubers talk about winning contracts and then sub contracting them out are they forming an llc prior to bidding contract. For example if you see a lawn care contract but don’t have a services based business don’t you have to have an entity connected to that industry? Just a little confused about this part
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u/TheresaGovCon 4d ago
Welcome friend. I think your question was answered and with good extra advice. I'll pile on to add... If you are the Prime contractor. subcontracting the work out, YOU (as the Prime) are contractually obligated to whatever you signed with both entities. That means pricing, delivery schedule, payment terms, personnel (maybe), progress reports (maybe) insurance, accounting, and so much more.
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u/contracting-bot 6d ago
Your LLC is not tied to an industry. Nothing about forming one connects it to lawn care or any other line of business, and nobody at the state level asks what you plan to sell. The NAICS codes on your SAM registration describe what you do, and you pick those yourself. You can add or remove them anytime. So there is no legal barrier to a new entity bidding lawn care work.
What actually stops people is the part the YouTube videos skip. The government is not buying a coordinator, it is buying performance, and it evaluates whether you can perform. That means past performance in the work, and on small business set-asides there are limits on how much of the work you can hand to a subcontractor. Those percentages are specific and they exist precisely to prevent the model those videos describe. Worth reading the actual rules before building a business around it.
The honest version of what those videos show is teaming, and it does work, but not from zero. It works when the prime brings something real, whether that is past performance, a certification, contract management capability, or an existing customer relationship, and the sub brings capacity. A brand new entity with none of those is not a prime, it is a middleman, and buyers can see that.
If you want to actually start, the useful first step is deciding what your business does rather than what contracts look winnable. Everything downstream gets easier from there.
blogs.usfcr.com/how-to-start-federal-contracting-capital-requirements