How Can Anyone Make $10K+/Month From Government Contracts?

TL;DR

You can start subcontracting government contracts by registering a small business on SAM.gov, finding an understandable service opportunity, securing a qualified provider’s quote, and submitting a researched bid that covers the quote, overhead, and unforeseen costs. Natalie reports earning $11,000 on one deal by charging the government $52,000 and paying her subcontractor $41,000. Read on for her bidding, pricing, fulfillment, and compliance process.

Transcript

My subcontractor charged me 41,000 and I charged the government 52,000. So I made 11,000 profit in just a 2e period. The first contract that I bid on was the first contract that I won. That was kind of when I was like, "Okay, well this is really easy." >> $10,000 net profit to you every year for 5 years just from making a deal. You really don't do ... Read More

Key Insights

• Government contract brokering is a model in which a prime contractor wins an award, hires a service provider to perform the required work, invoices the government, pays the subcontractor, and retains the difference after accounting for overhead and unforeseen costs.
• SAM.gov is the free public website identified for registering a business and finding federal contract opportunities. Natalie compares registration to completing a job application because the process asks for information about the company before it can begin submitting bids.
• Service contracts are presented as easier starting opportunities than product contracts because a bidder can negotiate payment timing directly with local providers. Product fulfillment may introduce additional variables involving manufacturers, approved countries, certifications, delivery requirements, and manufacturing standards.
• A subcontractor quote should be secured before submitting a government bid. Natalie warns that winning first and searching for a provider afterward can leave the prime contractor responsible for work that it has no qualified or willing company available to perform.
• Pricing should be based on publicly available historical government spending data, not an arbitrary percentage markup. The proposed price should incorporate the subcontractor's quote, company overhead, and allowance for unforeseen costs while remaining appropriate for comparable government purchases.
• Natalie's first contract was a five-year formalin disposal award in California. Her subcontractor quoted about $700 per pickup, she bid $1,500, and the agency estimated 14 to 16 pickups annually, leaving an expected margin of $800 for each completed pickup.
• Government contracting can be managed remotely when a prime contractor teams with a provider near the performance location. Natalie describes bidding on work outside her home state, including landscaping two time zones away, while local subcontractors carry out the physical services.
• Subcontracting limitations depend on the individual contract. The description states that not every award contains such a clause, but when the cited limitation applies, the company must perform at least 51% of the work through a compliant structure, including an employee-leasing teaming arrangement or qualifying similarly situated entities.

Questions & Answers

Q: How do you start subcontracting government contracts?

Form an LLC or otherwise register a small business with your state, then register the company for free on SAM.gov. Find a service solicitation you understand, obtain a written quote from a qualified provider, review the requirements and historical spending, and submit a price that covers the provider, overhead, and unforeseen costs.

Q: How does subcontracting a government contract make money?

The prime contractor submits a price to the government and hires a subcontractor to perform the service for a lower amount. After invoicing and receiving payment, the prime contractor pays the provider and retains the remaining margin after costs; Natalie reports charging $52,000, paying $41,000, and making $11,000.

Q: What government contracts are easiest for beginners to evaluate?

Natalie recommends starting with service contracts whose requirements are understandable and avoiding opportunities with confusing packages or numerous attachments. Painting, landscaping, and waste disposal let a bidder speak directly with providers, while product contracts may involve manufacturers, certifications, approved countries, delivery rules, and manufacturing standards.

Q: Why should you secure a subcontractor before submitting a bid?

A subcontractor’s quote establishes the expected fulfillment cost and confirms that a qualified provider is willing to perform the work. Winning first and searching afterward could leave the prime contractor responsible for a requirement that no available provider will complete.

Q: How should you price a subcontracted government bid?

Use public historical government spending data instead of choosing an arbitrary markup. Combine that research with the subcontractor’s quote, company overhead, and an allowance for unforeseen costs; on Natalie’s first award, the provider quoted about $700 per pickup and she bid $1,500.

Q: Can you win a government contract without industry experience?

Natalie says she had no background in formalin or hazardous waste when she bid on her first contract, which she won. She identified qualified hazardous-waste companies, obtained a provider’s quote, added her researched price, and submitted the bid, showing that a capable subcontractor and compliant proposal can supply expertise the prime contractor lacks.

Q: Can government contracts be managed remotely?

Natalie describes managing work outside her home state by teaming with providers near the performance location. Her first award involved formalin disposal in California while she was in Miami, and she also discusses landscaping work two time zones away; the local subcontractor performs the physical service while the prime contractor coordinates and invoices.

Q: Are there limits on subcontracting government contract work?

The applicable rules depend on the individual solicitation, so every contract must be reviewed carefully before bidding. The existing description notes that when the cited subcontracting limitation applies, the prime contractor must perform at least 51% of the work through a compliant structure, which may include an employee-leasing teaming arrangement or qualifying similarly situated entities.

Summary & Key Takeaways

• Natalie describes a government contracting model in which a small business finds opportunities through SAM.gov, obtains quotes from service providers, and submits a higher researched price to the government. If awarded the contract, the business coordinates the subcontractor, invoices the agency, receives payment, pays the provider, and retains the remaining margin as profit.

• Her first award involved formalin disposal in California. A hazardous waste company quoted about $700 per pickup, while she bid $1,500. The agency estimated 14 to 16 pickups annually under a five-year contract lasting until 2029, creating a potential margin of $800 each time the subcontractor completes a pickup.

• The recommended process emphasizes understandable service contracts, qualified providers, historical spending research, and compliance. Natalie advises securing a willing subcontractor before bidding and using public records to set pricing instead of choosing arbitrary markups. Bidders must also examine solicitation clauses, including any applicable limitation requiring the prime contractor to perform at least 51% of the work.