Subcontracting

Subcontracting is the practice by which the holder of a contract engages other firms to deliver part of the contracted work. The prime holds the customer relationship and the accountability; the subcontractor holds a slice of delivery.

In public procurement the prime's obligations flow down: clauses on confidentiality, labour standards, audit rights, and set-aside participation are commonly required to bind subcontractors to the same terms. Subcontracting is also the standard entry route for firms not yet able to prime — winning work under a prime's compliance umbrella while building the past performance that makes later priming possible. The commercial discipline is scope: a subcontract agreement that restates the flow-down obligations and the exact deliverable boundary prevents the disputes that consume the margin later.

@misc{pi-2026-definitions-subcontracting,
  author = {{The Procurement Institution}},
  title  = {Subcontracting — definition},
  year   = {2026},
  url    = {https://procurementinstitution.org/definitions/subcontracting},
  note   = {Release 2026.10}
}