Nine questions to ask before you sign a federal subcontract

The document you are about to sign

A prime calls. They like the capability statement, they want you on a bid, and a subcontract lands in your inbox as a flat PDF. Forty pages, half of it incorporated by reference, and the proposal is due in four days. Signing feels like the only way to keep the work, which is what the schedule is for. The nine questions below are where small firms lose money on federal subcontracts. Each is cheap to fix before signature and close to impossible after.

None of this assumes bad faith. Most primes send a template written for a different kind of vendor, and the terms that hurt a small software firm are there because nobody ever asked. A prime that will not discuss any of the nine has told you something anyway.

1. What is my scope, and who gets to change it?

Federal subcontracts define scope one of two ways. Some attach a subcontract statement of work the prime wrote for you. Others incorporate the government's performance work statement by reference and assign you "the tasks described in Section 3.2." The second form is cheaper for the prime to produce and much worse for you, because Section 3.2 describes a whole program, and it will grow.

Ask for a scope document naming deliverables, acceptance criteria, and the price or level of effort for each. Then ask what happens when the requirement changes. Under FAR 52.243-1 and 52.243-2 the contracting officer can direct a change within the general scope of the prime contract, and the prime gets an equitable adjustment. Neither clause gives you anything. Your right to an adjustment exists only if your subcontract writes one.

A workable change provision has four parts. Only a named person at the prime can direct a change. Direction has to be in writing. You get a defined window, commonly ten business days, to price the impact before you are obligated to perform. And work done at the prime's verbal direction is billable at your rates until the parties agree otherwise. That last part carries the weight, because scope creep arrives as a technical lead's email, never as a formal modification.

2. When do I get paid, and does prompt payment reach me?

The Prompt Payment Act (31 U.S.C. 3901 to 3907) obligates the government to pay a prime within 30 days of a proper invoice, with interest running after that. It creates no right for you. No statute requires a prime to pay a services or software subcontractor on any schedule at all.

The nearest thing is FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors. When the prime receives an accelerated payment from the government, the clause directs it to pay small business subcontractors "to the maximum extent practicable," at every tier. The government's own policy target for paying small business is 15 days. Read the quoted phrase again: no interest penalty, no enforcement route you can reach. It belongs in the file. It is not a payment term.

Your payment term is whatever the subcontract says, so read the conditional language. "Pay when paid" is a timing rule, and the prime still owes you. "Pay if paid" is a condition precedent: if the government never pays the prime, the prime never owes you. Courts in many states enforce that condition only when it is stated unmistakably, and several refuse to enforce it at all in construction. Ask to replace it with an outside date, such as 45 days from your invoice. While you are there, define what makes an invoice "proper," so a missing field is not an excuse for a 60-day delay.

3. Which prime-contract clauses actually flow down?

Every prime subcontract has an incorporation clause. The lazy version reads: "All clauses of the prime contract are incorporated herein and shall apply to Subcontractor as if Subcontractor were the Contractor and the Contractor were the Government." Do not sign that sentence. It imports clauses that are meaningless between private parties, such as Limitation of Funds, and it imports the government's remedies against a contractor without the government's obligations to one.

Ask instead for a clause matrix: a numbered attachment listing each incorporated clause with the substitution of parties stated clause by clause. Any prime with a real subcontracts group already keeps one. Some clauses do have to reach you. Others never will.

Clause	What it does	Does it reach a subcontract?
FAR 52.204-25 Covered telecom prohibition	Bars covered telecom and video surveillance equipment	Yes, all subcontracts, including commercial products and services.
FAR 52.219-8 Utilization of Small Business	Good-faith effort to use small business below you	Yes, to other-than-small subs above the simplified acquisition threshold.
FAR 52.232-40 Accelerated payments	Faster payment down the chain	Yes, to small business subs at every tier. No penalty attached.
DFARS 252.204-7012 Safeguarding covered defense information	NIST SP 800-171 controls, 72-hour incident reporting	Yes, when performance involves covered defense information.
FAR 52.233-1 Disputes	Contract Disputes Act rights	No. Government to prime only. You have no privity.
FAR 52.232-25 Prompt Payment	30-day government payment with interest	No. It binds the paying office, not the prime.

One doctrine will not rescue you. In G.L. Christian & Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963), a court read a mandatory clause into a government contract that had omitted it. That doctrine governs contracts between the government and a prime, and it does not fill gaps between two private firms. A clause your prime left out is simply absent.

4. Who owns what I build?

On defense work two clauses govern most of it: DFARS 252.227-7013 for noncommercial technical data and 252.227-7014 for noncommercial computer software. They sort rights by who paid. Unlimited rights let the government use and disclose without restriction. Government purpose rights allow government-purpose use for a period, commonly five years, then convert to unlimited. Limited rights in data and restricted rights in software protect what was developed exclusively at private expense. Those items belong on the assertions table filed with the offer, and anything you fail to assert before award is very hard to protect later.

Two failure modes recur. The first is a subcontract template written for commercial product development, carrying a work-made-for-hire clause and an assignment of "all inventions, improvements, and works conceived in connection with the Work." That sweeps in the tooling you brought with you. Ask for a background-IP schedule listing your existing models, libraries, and pipelines by name, excluded from assignment and licensed only as far as performance requires.

The second is pressure, and the regulation speaks to it. DFARS 252.227-7013 says the prime "shall not use its power to award contracts as economic leverage to obtain rights in technical data from its subcontractors or suppliers," and the same clause lets a subcontractor deal with the government about its own assertions. If your contribution rests on SBIR-developed software, note that SBIR data carries a protection period of 20 years from date of award under the SBA SBIR Policy Directive, and say so before signature rather than at delivery.

5. What happens to the people I name?

There is no government-wide FAR key personnel clause. Agencies write their own, usually as a Section H special contract requirement, and the pattern is consistent: the contract names individuals, the prime cannot substitute them without contracting officer approval, and 15 or 30 days notice is typical.

Naming an engineer in a prime's proposal does three things at once. It gives the evaluator a real person to score. It commits your firm to keeping that person across a base period plus options, at a rate the prime negotiated. And it hands the prime a documented relationship with your employee.

Ask for four things. A substitution standard of "equal or better qualifications," measured against the resume in the proposal rather than the prime's preference. A commitment that the prime will carry your substitution request to the contracting officer instead of treating it as a default. A non-solicitation running both directions for the term plus twelve months, since the one-way version is standard and one-way is the whole issue.

Watch for language letting the prime remove your people "at its sole discretion" without cause. Paired with a fixed-price seat, that clause ends your revenue without ever terminating your subcontract.

6. What does exclusivity cost, and what do I get for it?

FAR Subpart 9.6 recognizes contractor team arrangements and tells contracting officers not to normally involve themselves in them. That neutrality runs both ways. The government will not enforce your teaming agreement.

Often, neither will a court. In Cyberlock Consulting, Inc. v. Information Experts, Inc., 939 F. Supp. 2d 572 (E.D. Va. 2013), aff'd, 549 F. App'x 211 (4th Cir. 2014), a teaming agreement promising a future subcontract at a stated workshare was held unenforceable as an agreement to agree, because the parties still had to negotiate the subcontract later. The asymmetry is the point. Your exclusivity promise is easy to prove. The prime's workshare promise is often worth nothing in court.

So price the promise. Scope exclusivity to one solicitation, identify it by number, and end it on the earliest of award, the prime's decision not to bid, or a fixed date. Add an automatic release if the prime does not submit a proposal or does not name your firm in it.

Then ask for consideration: a defined workshare tied to named scope, a contribution toward your bid-and-proposal cost, or a rule that your resumes go into a proposal only with written consent. Strongest of all, attach the negotiated subcontract as an exhibit, signed at the same time and effective on award. That step turns an agreement to agree into a contract.

7. If I am the prime, what does 13 CFR 125.6 require?

The question inverts when you win a set-aside and want a larger partner on your own contract. SBA's limitations on subcontracting cap how much of the award can leave the small business.

FAR 52.219-14 makes the limitation an enforceable contract term, and the Small Business Act sets the penalty at the greater of $500,000 or the amount spent above the permitted level (15 U.S.C. 645(d)). Compliance is measured against what the government pays you, so a subcontract priced as a share of revenue can drift over the line as options are exercised.

SBA's ostensible subcontractor rule at 13 CFR 121.103(h) is the second trap. It treats a prime and a subcontractor as affiliated for size purposes when the subcontractor performs the primary and vital requirements, or when the prime is unusually reliant on it, and a size protest on that ground can cost an award you already won. Both rules point the same way: keep the distinctive technical work inside your own firm. SBIR carries its own floor, since the awardee must perform at least two-thirds of the research in Phase I and half in Phase II.

One item from the other side of the table. FAR 19.702 requires a large prime to submit an acceptable small business subcontracting plan on contracts expected to exceed $900,000, or $2 million for construction, when subcontracting possibilities exist. If a prime is courting you partly to meet those goals, that is legitimate, and it tells you what you are worth to them.

8. How do disputes get resolved, and can I reach the government?

The Contract Disputes Act (41 U.S.C. 7101 to 7109) lets a contractor claim to the contracting officer and appeal a final decision to a board of contract appeals or the Court of Federal Claims. You are not that contractor. There is no privity between a subcontractor and the government, and the boards dismiss subcontractor appeals on that ground routinely.

The accepted route is a sponsored pass-through claim, where the prime submits your claim in its own name. Under the Severin doctrine, from Severin v. United States, 99 Ct. Cl. 435 (1943), a prime cannot recover a subcontractor's damages if it bears no liability to the subcontractor for them, so a broad release buried in your subcontract can extinguish the claim before anyone files it. The fix is a sponsorship provision, sometimes called a liquidating agreement: the prime agrees to present your certified claim, you fund the prosecution, the prime's liability to you is capped at what it recovers, and both parties expressly preserve that liability so the Severin bar does not apply.

Then read the rest of the dispute article as a budget line. Where is the forum, and what does travel there cost? Is arbitration mandatory, and who pays the arbitrator? Does a "continue performance pending resolution" obligation require you to keep spending during a fight about whether you will be paid? For a firm with three months of runway, that last clause decides the outcome by itself.

9. What happens if the prime loses?

There are three versions of losing, and each needs its own sentence in the agreement.

No award. The teaming agreement should terminate on its own, exclusivity should release automatically, and proprietary material you contributed should be returned or destroyed on request. Write a survival clause that keeps confidentiality alive and lets everything else expire, so a lost bid does not quietly hold you out of the recompete three years later.

Termination. If the government terminates the prime contract for convenience, the prime will terminate yours. You need a mirror termination-for-convenience article paying incurred costs, settlement expenses, and profit on work performed, with a window to submit a settlement proposal. Without it, unbilled work in progress on the day of termination is a loss. A default termination is worse, because the prime will look for somewhere to allocate the failure, which is one more reason to keep acceptance records clean from week one.

Insolvency. If the prime fails financially, you are an unsecured creditor holding invoices. On construction contracts above $150,000 the Miller Act (40 U.S.C. 3131 to 3134, implemented at FAR 28.102-1) gives subcontractors a payment bond to claim against. Services and software subcontracts have no equivalent. No bond, no lien against federal property, no direct claim on the government. Your protection is commercial: invoice monthly instead of at milestones, cap the unbilled work you carry, stop work when receivables age past an agreed threshold, and check the prime the way they check you. SAM.gov shows registration and exclusions; USAspending.gov shows what they have actually been awarded.

Before signature

• A scope attachment with deliverables, acceptance criteria, and price or level of effort per item.
• A written change procedure naming who can direct work, and a rate for directed work pending agreement.
• An outside payment date that does not depend on the government paying the prime.
• A clause matrix listing every incorporated prime-contract clause with the parties substituted.
• A background-IP schedule and your data-rights assertions, attached before the offer goes in.
• Exclusivity scoped to one solicitation, with automatic release triggers and an end date.
• A claim-sponsorship provision, and a mirror termination-for-convenience article.

Bottom line

Subcontracting is a good way for a small technical firm to reach a program it could not win on its own, and the agreement carrying it is a commercial contract between two companies working in the shadow of a federal award. The regulations shape that contract. They do not protect you inside it. Nine questions, sent in one email before the deadline, cost less than a single unpaid invoice cycle.

Frequently asked questions

The document you are about to sign

A prime calls. They like the capability statement, they want you on a bid, and a subcontract lands in your inbox as a flat PDF. It runs 40 pages, half of it incorporated by reference, and the proposal is due in four days. Signing feels like the only way to keep the work. That schedule is doing exactly what it was built to do. The nine questions below are where small firms lose money on federal subcontracts, and each one is cheap to fix before signature and close to impossible after.

None of this assumes bad faith. Most primes send a template their subcontracts group wrote for a different kind of vendor, and the terms that hurt a small software firm are usually there because nobody ever asked for anything else. Asking is normal. A prime that will not discuss any of the nine has told you something useful.

1. What is my scope, and who gets to change it?

Federal subcontracts define scope one of two ways. Some attach a subcontract statement of work the prime wrote for you. Others incorporate the government's performance work statement by reference and assign you "the tasks described in Section 3.2." The second form is cheaper for the prime to produce and much worse for you, because Section 3.2 was written to describe a whole program, and it will grow.

Ask for a scope document naming deliverables, acceptance criteria, and the price or level of effort attached to each. Then ask the harder question: what happens when the requirement changes? Under FAR 52.243-1 and 52.243-2 the contracting officer can direct a change within the general scope of the prime contract, and the prime gets an equitable adjustment. Neither clause gives you anything. Your right to an adjustment exists only if your subcontract writes one.

A workable change provision has four parts. Only a named person at the prime can direct a change. Direction has to be in writing. You get a defined window, commonly ten business days, to submit price and schedule impact before you are obligated to perform. And work performed at the prime's verbal direction is billable at your rates until the parties agree otherwise. That last part carries most of the weight, because scope creep arrives as a technical lead's email asking for one more thing, never as a formal modification.

2. When do I get paid, and does prompt payment reach me?

The Prompt Payment Act (31 U.S.C. 3901 to 3907) obligates the government to pay a prime within 30 days of a proper invoice, with interest running automatically after that. It creates no right for you. No statute requires a prime to pay a services or software subcontractor on any particular schedule.

The nearest thing is FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors. When the prime receives an accelerated payment from the government, the clause directs it to pay small business subcontractors "to the maximum extent practicable" after receipt of a proper invoice, and requires the same terms in subcontracts with small business concerns at every tier. The government's own policy target for paying small business is 15 days. Read that quoted phrase carefully: the clause carries no interest penalty and no enforcement route you can reach. It belongs in the file. It is not a payment term.

Your payment term is whatever the subcontract says, so read the conditional language. "Pay when paid" is a timing rule, and the prime still owes you. "Pay if paid" is a condition precedent, meaning that if the government never pays the prime, the prime never owes you. Courts in many states enforce that condition only when it is stated unmistakably, and several states refuse to enforce it at all in construction. Ask to replace it with an outside date, for example the earlier of ten days after the prime's receipt or 45 days from your invoice.

Three smaller details are worth an hour each. Define what makes an invoice "proper," so a missing field is not an excuse for a 60-day delay. Cap the rejection window, so the prime must reject in writing with reasons inside a week or the invoice stands accepted. And on a cost-reimbursement subcontract, settle provisional indirect billing rates in writing, because final rate settlement can arrive two years later against a company that has already spent the money.

3. Which prime-contract clauses actually flow down?

Every prime subcontract has an incorporation clause. The lazy version reads: "All clauses of the prime contract are incorporated herein and shall apply to Subcontractor as if Subcontractor were the Contractor and the Contractor were the Government." Do not sign that sentence. It imports clauses that are meaningless between private parties, such as Limitation of Funds. It imports the government's remedies against a contractor without the government's obligations to one. And it makes you responsible for compliance you cannot perform, including reporting into systems you cannot access.

Ask instead for a clause matrix: a numbered attachment listing each incorporated clause with the substitution of parties stated clause by clause. Any prime with a real subcontracts group already maintains one. Some clauses do have to reach you, by statute or by their own terms. Others never will, and reading the difference shows you where your protection has to be written by hand.

Clause	What it does	Does it reach a subcontract?
FAR 52.204-25 Prohibition on certain telecom (Sec. 889)	Bars covered telecommunications and video surveillance equipment from performance	Yes. The clause requires its substance in all subcontracts, including for commercial products and services.
FAR 52.222-50 Combating Trafficking in Persons	Prohibits trafficking-related practices; compliance plan above thresholds	Yes, in all subcontracts, by its own terms.
FAR 52.219-8 Utilization of Small Business Concerns	Requires good-faith effort to use small business at lower tiers	Yes, in subcontracts to other-than-small firms above the simplified acquisition threshold that offer further subcontracting.
FAR 52.232-40 Accelerated payments to small business subs	Directs faster payment down the chain	Yes, to small business subcontractors at every tier. No penalty attached.
DFARS 252.204-7012 Safeguarding covered defense information	NIST SP 800-171 controls plus 72-hour cyber incident reporting to DoD	Yes, when performance involves covered defense information or operationally critical support.
FAR 52.233-1 Disputes	Contract Disputes Act rights against the government	No. It runs between the government and the prime. You have no privity.
FAR 52.232-25 Prompt Payment	30-day government payment obligation with interest	No. It binds the paying office, not the prime.

One doctrine will not rescue you. In G.L. Christian & Associates v. United States, 312 F.2d 418 (Ct. Cl. 1963), the court read a mandatory termination clause into a government contract that had omitted it. That doctrine governs contracts between the government and a prime. It does not fill gaps in an agreement between two private firms. A protective clause your prime left out is simply absent.

4. Who owns what I build?

On defense work, two clauses govern most of it: DFARS 252.227-7013 for noncommercial technical data and DFARS 252.227-7014 for noncommercial computer software. They sort rights by who paid for development. Unlimited rights let the government use and disclose without restriction. Government purpose rights allow government-purpose use for a period, commonly five years, then convert to unlimited. Limited rights in technical data and restricted rights in software protect items developed exclusively at private expense.

Category follows funding, and assertions matter more than intentions. Items developed at private expense go on the assertions table submitted with the offer. Anything you failed to assert before award is very hard to protect after delivery, and your prime will not do that homework for you.

Two failure modes recur. The first is a subcontract template written for commercial product development, carrying a work-made-for-hire clause and an assignment of "all inventions, improvements, and works conceived in connection with the Work." That language sweeps in the tooling you brought with you. Ask for a background-IP schedule listing your pre-existing models, libraries, and pipelines by name, excluded from assignment and licensed to the prime only as far as performance requires.

The second is pressure, and the regulation speaks to it directly. DFARS 252.227-7013 states that the prime "shall not use its power to award contracts as economic leverage to obtain rights in technical data from its subcontractors or suppliers," and the same clause lets a subcontractor deal with the government about its own assertions rather than routing them through the prime. Small firms rarely know that provision exists. If your contribution rests on software developed under an SBIR award, note that SBIR data carries its own protection period, running 20 years from date of award under the SBA SBIR Policy Directive, and say so in writing before signature rather than at delivery.

5. What happens to the people I name?

There is no government-wide FAR key personnel clause. Agencies write their own, usually as a Section H special contract requirement, and the pattern is consistent: the contract names individuals, the prime cannot substitute them without contracting officer approval, and 15 or 30 days advance notice is typical.

Putting a named engineer into a prime's proposal does three things at once. It gives the evaluator a real person to score. It commits your firm to retaining that person across a base period plus options, at a rate the prime negotiated. And it hands the prime a documented relationship with your employee.

Ask for four things. A substitution standard of "equal or better qualifications," measured against the resume in the proposal rather than against the prime's preference. A commitment that the prime will carry your substitution request to the contracting officer instead of treating a request as a default. A non-solicitation clause running in both directions for the term plus twelve months, since the one-way version is standard and one-way is the entire issue. And a written cure period before any deduction or termination tied to staffing.

Watch for language letting the prime remove your personnel "at its sole discretion" or "at the customer's request" without cause. Paired with a fixed-price seat, that clause lets a prime end your revenue without ever terminating your subcontract.

6. What does exclusivity cost, and what do I get for it?

FAR Subpart 9.6 recognizes contractor team arrangements and instructs contracting officers not to normally involve themselves in them. That neutrality runs both ways. The government will not enforce your teaming agreement.

Often, neither will a court. In Cyberlock Consulting, Inc. v. Information Experts, Inc., 939 F. Supp. 2d 572 (E.D. Va. 2013), aff'd, 549 F. App'x 211 (4th Cir. 2014), a teaming agreement promising a future subcontract at a stated workshare was held unenforceable as an agreement to agree, because the parties still had to negotiate subcontract terms later. Similar reasoning has been applied since. The result is asymmetric: your exclusivity promise is easy to breach and easy to prove, and the prime's workshare promise is frequently worth nothing in court.

So price the promise. Scope exclusivity to one solicitation, identify it by number, and end it on the earliest of award, the prime's decision not to bid, or a fixed calendar date. Add an automatic release if the prime does not submit a proposal or does not name your firm in the one it submits.

Then ask for consideration. A defined workshare percentage tied to named scope. A contribution toward your bid-and-proposal cost. A commitment that your resumes go into a proposal only with written consent, so your engineers are not shopped across three teams. Strongest of all, attach the fully negotiated subcontract as an exhibit to the teaming agreement, signed at the same time and effective on award. That single step is what turns an unenforceable agreement to agree into a contract.

7. If I am the prime, what does 13 CFR 125.6 require?

The question inverts when you win a set-aside and want to bring a larger partner onto your own contract. SBA's limitations on subcontracting cap how much of the award can leave the small business.

Two consequences follow. FAR 52.219-14 makes the limitation an enforceable contract term, and the Small Business Act sets the penalty at the greater of $500,000 or the amount spent above the permitted level (15 U.S.C. 645(d)). Compliance is measured against what the government pays you, so a subcontract priced as a share of your revenue can drift over the line as options are exercised.

Separately, SBA's ostensible subcontractor rule at 13 CFR 121.103(h) treats a prime and a subcontractor as affiliated for size purposes when the subcontractor performs the primary and vital requirements or the prime is unusually reliant on it. A size protest on that ground can cost an award you already won. Both rules point the same direction: keep the technically distinctive work inside your firm, and be able to show which staff performed which tasks. SBIR work carries its own floor, since the awardee must perform at least two-thirds of the research in Phase I and at least half in Phase II.

One item on the other side of the table. FAR 19.702 requires a large prime to submit an acceptable small business subcontracting plan on contracts expected to exceed $900,000, or $2 million for construction, when subcontracting possibilities exist. If a prime is courting you partly to meet those goals, that is a legitimate reason and a useful measure of what your participation is worth to them.

8. How do disputes get resolved, and can I reach the government?

The Contract Disputes Act (41 U.S.C. 7101 to 7109) lets a contractor submit a claim to the contracting officer and appeal a final decision to a board of contract appeals or the Court of Federal Claims. You are not that contractor. There is no privity between a subcontractor and the government, and the boards dismiss subcontractor appeals on that ground as a matter of routine.

The accepted route is a sponsored pass-through claim, where the prime submits your claim to the government in its own name. It works, and it has a trap. Under the Severin doctrine, from Severin v. United States, 99 Ct. Cl. 435 (1943), a prime cannot recover for a subcontractor's damages if the prime bears no liability to the subcontractor for them. A broad release or an exculpatory clause buried in your subcontract can extinguish your claim before anyone files it. The fix is a sponsorship provision, sometimes called a liquidating agreement: the prime agrees to present your certified claim, you agree to fund the prosecution and cooperate, the prime's liability to you is limited to what it recovers, and both parties expressly preserve that liability so the Severin bar does not apply.

Then read the rest of the dispute article as a budget line. Where is the forum, and what does travel there cost? Is arbitration mandatory, under whose rules, and who pays the arbitrator? Is there fee shifting, and which way does it run? Does a "continue performance pending resolution" obligation require you to keep spending during a fight about whether you will be paid at all? For a firm with three months of runway, that last clause decides the outcome by itself.

9. What happens if the prime loses?

There are three versions of losing, and each needs its own sentence in the agreement.

No award. Your teaming agreement should terminate on its own, exclusivity should release automatically, and proprietary material you contributed to the proposal should be returned or destroyed on request. Write a survival clause that keeps confidentiality alive and lets everything else expire, so a lost bid does not quietly hold you out of the recompete three years later.

Termination. If the government terminates the prime contract for convenience, the prime will terminate your subcontract. You need a mirror termination-for-convenience article paying incurred costs, settlement expenses, and profit on work performed, with a defined window to submit a settlement proposal. Without it, unbilled work in progress on the day of termination is a loss. A termination for default at the prime level is worse, because the prime will look for somewhere to allocate the failure, which is one more reason to keep deliverables and acceptance records clean from week one.

Insolvency. If the prime fails financially, you are an unsecured creditor holding invoices. On construction contracts above $150,000 the Miller Act (40 U.S.C. 3131 to 3134, implemented at FAR 28.102-1) gives subcontractors a payment bond to claim against. Services and software subcontracts have no equivalent. No bond, no lien against federal property, no direct claim on the government. Your protection is commercial: invoice monthly instead of at milestones, cap the unbilled work in progress you will carry, stop work when receivables age past an agreed threshold, and check the prime the way they check you. SAM.gov shows registration and exclusions; USAspending.gov shows what the prime has actually been awarded and how much has been outlayed.

Before signature

• A scope attachment with deliverables, acceptance criteria, and price or level of effort per item.
• A written change procedure naming who at the prime can direct work, and a rate for directed work pending agreement.
• An outside payment date that does not depend on the government paying the prime.
• A clause matrix listing every incorporated prime-contract clause with the parties substituted.
• A background-IP schedule and your data-rights assertions, both attached before the offer goes in.
• An "equal or better qualifications" substitution standard and a reciprocal non-solicitation.
• Exclusivity scoped to one solicitation, with automatic release triggers and an end date.
• A claim-sponsorship provision that preserves the prime's liability to you.
• A mirror termination-for-convenience article with settlement costs and profit on work performed.

Bottom line

Subcontracting is a good way for a small technical firm to reach a program it could not win on its own, and the agreement carrying it is a commercial contract between two companies operating in the shadow of a federal award. The regulations shape that contract. They do not protect you inside it. Nine questions, sent in one email before the proposal deadline, cost less than a single unpaid invoice cycle and tell you most of what you need to know about the partner on the other side.

Frequently asked questions