USFCR Blog

The Hidden Risks of Multi-Entity Contracting

Federal contracting opens the door to major growth, but it also comes with a long list of responsibilities that can quietly stack up, especially for businesses operating across multiple locations or working with subcontractors.

For many, the challenge isn't winning work. It’s staying compliant once the work begins.

Each registered entity tied to a federal contract must meet very specific conditions: active SAM registration, accurate business listings, proper set-aside certification (if applicable), and consistency across government-facing systems like DSBS and capabilities statements. If just one location falls out of step, or a subcontractor isn’t properly registered, it doesn’t just slow things down. It can bring the entire contract to a halt.

This isn't theoretical. It happens more often than people think.

How Federal Buyers Use DSBS for Market Research and Why Your Profile Matters

Why Contracting Officers Use DSBS

When agencies consider setting aside a federal contract for small businesses, they are required to use DSBS. This is not optional. According to FAR 19.203(d) and SBA regulations at 13 CFR 125.2, contracting officers must search both SAM and DSBS to find eligible vendors.

This requirement is tied to the Rule of Two. If they find at least two responsible small businesses that can perform the work, the contract is set aside for small businesses. If they do not, it can be released for full and open competition. That initial market research starts with a DSBS search.

The federal government is raising the bar again. Starting in 2025, all manufactured products and construction materials used in federally funded projects must meet a 65 percent domestic content requirement under the Buy American Act. This rule runs through 2028 and rises to 75 percent in 2029. If you're not auditing your supply chain now, you're risking more than a missed bid; you could be disqualified before you even get started.

Billions in Maintenance Contracts Are Available. Is Your Business Ready to Bid?

If your business offers tree care, lawn services, or landscaping, you might be missing a major revenue stream. The federal government spends billions every year maintaining outdoor spaces, and most of that work falls under NAICS Code 561730. These contracts cover everything from tree removal and mowing to erosion control and fire mitigation. And many are reserved for small businesses.

If you’ve been in construction for years, you already know how to manage crews, estimate jobs, and deliver results. However, when it comes to federal contracting, it might feel like a completely different world. That’s normal. Plenty of experienced business owners run into that same feeling.

Government agencies often purchase goods and services from the same marketplace as private-sector businesses. Commercial item contracts simplify the process, allowing small businesses to sell their standard products to federal buyers with minimal modifications.

Why April Matters in Federal Contracting

Federal agencies don't wait for June to start spending. By the time summer hits, most buyers already have their budgets planned and vendors shortlisted. April is when the planning happens. It’s when buyers clear out Q1 backlogs, prepare their summer acquisition schedules, and move funds to priority projects.

A Cost-Plus-Fixed-Fee (CPFF) contract reimburses a contractor for allowable costs incurred during a project and provides a fixed fee for profit. Unlike Firm-Fixed-Price contracts, where contractors assume the risk of cost overruns, CPFF contracts protect businesses from financial loss while still ensuring a reasonable return.

June 5, 2025 | Clearwater, FL | Hosted by USFCR

Why this event matters:
Federal and commercial business growth is rarely a straight path. Most small businesses hit a point where they need better processes, smarter strategies, or just the right connection to move forward. That’s where Elevate 2025 comes in.

This one-day growth summit is designed for business owners, executives, and federal contractors who are ready to take focused action. You’ll get real strategies from professionals who’ve done the work, and you’ll leave with practical tools you can actually use.

If you're in federal contracting, teaming up might be your ticket in—but only if you understand the rules of the game.

Many small businesses confuse teaming agreements with subcontracting. They both involve working with other companies. They both can help you win more contracts. But they’re not the same—and mixing them up can cost you opportunities or worse, land you in compliance trouble.

Let’s break it down.