Massachusetts Procurement Technical Assistance Center

 

Subcontracting Preference Programs—What are they? Do I quality for any?

  

Did you know that the current federal procurement laws call for a goal of 23% of all federal government contract dollars to be awarded to small business, either directly or through subcontracts? Additionally, several other programs, called subcontracting preference programs, have been developed to support the growth of specific types of small business, for example, women-owned businesses. The Federal Government has set goals for each program to assure that government agencies and prime contractors award contracts to diverse business types.

For the small business owner, identifying yourself as being eligible for one of these subcontracting preference programs can be an advantage in government contracting. Failure to take advantage of a preference program is like not taking all of your income tax deductions.

Click on the link below for a chart that describes the seven most recognized subcontracting preference programs, the qualification criteria and the contracting benefits associated with each program.

How to Read the Chart:

  • Program Name and Purpose: Explains the reason for the creation of the program
  • Qualifiers: The characteristics of the business or owner(s) that qualify one for this program.
  • Certification Required: Some programs require certification. For those that require a certification process, the name of the certification agency is listed.
  • Goal: This is the percentage of contract value, called out in legislation, targeted for a preference group (e.g. a contract valued at $1,000,000 is let to a large business; the small business goal would be 23% or $230,000).
  • Set Aside: This is a contract that is set aside for competition solely among members of a preference group, given adequate competition among members of that preference group. 
  • Price Preference: The amount added to non-participating bidders when competing in full and open competition with a qualifying firm. 
  • ProNet Registration: ProNet is a database managed by the U.S. Small Business Administration. It serves as an online catalog of businesses that are in these preferences programs. 

  

If you have any questions about the information in this chart, you may contact the Massachusetts Procurement Technical Assistance Center at 413-545-6303 or the U.S. Small Business Administration at 617-565-5590.