The Difference between Subcontractors and Employees

Subcontractors play a large role in the world of government contracting. While employees and subcontractors can both do similar jobs, there are important differences between them. Primarily, subcontractors work on specific, temporary jobs to meet a specific need. Employees will usually work full-time on a variety of tasks as needed by the employer. When looking to win and fulfill a government contract, subcontractors can serve to round out the service offerings of a business without the training and onboarding required for full-time employees.

The Benefits of Hiring an Employee

Hiring a full-time employee is a significant investment for most businesses that can offer big rewards. The right employee can help to fill out a team and drive new opportunities for a business on a scale that may not be possible for part-time employees, contractors, or subcontractors. Full-time employees get to know the ins and outs of a business and have knowledge of all the inner workings, making them excellent representatives of a business. These employees are also able to be placed onto different tasks once a job has been completed, allowing for consistency in the workplace.

The Benefits of Hiring a Subcontractor

While subcontractors may not work for a business full-time, they are usually highly proficient in specific areas that a business might need for a certain period of time. According to Indeed, “subcontractors often possess specialized skills for their industries, which often include construction, technology, retail, and creative fields. Working as a subcontractor might provide benefits like more flexible scheduling and greater specialization within your field.” Typically, hiring a subcontractor also means reduced costs. Subcontractors also don’t require the same healthcare and insurance benefits as a full-time employee.

How Do Subcontractors Help Win Government Contracts?

When a business wins a government contract, it becomes a contractor. However, businesses are not always fully equipped to fulfill all the needs of a government agency. A subcontractor works alongside the business that won the contract to fulfill specific requirements that cannot be met by the original contractor. According to the U.S. General Services Administration, contractors and subcontractors who work together can:

  • Compete for proposals for which they wouldn’t otherwise qualify
  • Increase market share and become more competitive
  • Reduce risk by sharing responsibilities
  • Focus on the supplies and services that best match resources and strengths of each company
  • Find greater success as a small and/or disadvantaged business

Many government agencies actively seek out contractor and subcontractor relationships when creating a job order. By utilizing these complementary relationships, government agencies have the opportunity to get a total solution without having to source multiple, separate companies. These relationships can even help government agencies to satisfy socioeconomic procurement goals and requirements.

CTAs or Subcontractors?

When creating a proposal, it is important to note the distinction between a contractor team arrangement (CTA) and a prime contractor and subcontractor relationship. By definition, a prime contractor is the business or organization that works directly with a government agency. A subcontractor is one who then works for the prime contractor to help fulfill the specific needs the government agency. In a prime contractor/subcontractor arrangement:

  • Only the prime contractor needs a government contract.
  • Only the prime contractor is the sole point of contact between the government and the organization. The prime contractor is responsible for its subcontracting activities. Many times, government agencies are encouraged to specify in the Request for Quotation (RFQ) that the use of subcontractors before work can be performed.
  • The prime contractor is limited to the supplies and/or services awarded on its original contract.

There are important differences in the format of the subcontractor relationship when compared to the contractor team arrangement (CTA). The U.S. General Services Administration defines a CTA as, “an arrangement in which two or more contractors’ team together to provide a total solution to meet a customer’s needs.” This differs from a prime contractor/subcontractor relationship in a few key areas. Mainly, a CTA requires each team member to have a contract with a government agency.

This arrangement also shares more responsibility between each member of the team, allowing each contractor to have open contact with the government agency and require that each team member fulfill the assigned duties addressed in the initial agreements.

Is a Subcontractor the Right Choice?

Oftentimes, a good subcontractor is far more cost effective than bringing in new, full-time employees. With the proper management, a subcontractor can be an ideal asset for businesses looking to win both federal and local government contracts. While this arrangement does place the responsibility of fulfillment square on a single businesses’ shoulders, it also offers greater control for the business. In a prime contractor/subcontractor relationship, the business is the single point of contact to the government agency and the sole holder of the contract.

Complete Contract Consulting provides businesses with the ability to gain in-depth reporting, ensure compliance, and easily manage subcontractors to ensure complete fulfillment of a contract. Many government agencies have strict reporting requirements. CCC helps businesses to obtain and organize this information to ensure a fruitful, lasting relationship with the government agency.

Finding a Subcontractor

While there is a myriad of options on the job market, finding the right subcontractor isn’t always easy. As the holder of a government contract, a business will have specific, detailed requirements on the qualifications, certifications, and size of any subcontractor it hires. The U.S. government offers multiple resources for finding qualified subcontractors, but this can still be a daunting task.

Complete Contract Consulting also offers matching services to help find the right subcontractor through database research and outreach. The CCC team will ensure that all proposed subcontractors are certified and can provide all the necessary validation that government agencies require.

If you’re ready to learn more about how your business can use subcontractors to obtain reliable revenue and grow your business through government contracts, contact our team today! With over 30 years of experience to draw from, Complete Contract Consulting is ready to help you submit a winning proposal.

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(561) 766-0884

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