Explaining the rules for subcontracting small business contracts - Eric Coffie

[@EricCoffie]

Are You Ready To Change Your Income? CLICK HERE GOVCONEDU.COM

[@TheChange26]

Hi. Is it possible to get help from you

[@SaveThatMoney411]

The federal simplified acquisitions threshold is $250,000. Limitations on subcontracting do not apply until you reach this threshold. Even then, the code only states limitations on profit share, not work done, unless you enter an explicit joint partnership agreement as an official mentor-protoge relationship honored by the SBA.

[@cocvastwwesupercardectandg933]

So then your saying under 250,000 you can technically sub all work done?

[@82powpow]

i’ve watched this video like 5-6 times. it makes more and more sense each time i’ve watched it. guys. think outside the box. we are so one dimensional as humans. gotta get creative with this stuff.

[@maymar3]

Eric, as usual...you’ve given an awesome video for all of us to prosper!!! THANK YOU for your knowledge and professional tidbits! May you continue to prosper! Fiona

[@EricCoffie]

Thanks Fiona. I am sick of people spreading misinformation.

[@SPARKWISDOM]

"If someone is giving you the wrong set of rules, how can you have a possible chance of winning the game?" That's the truth.

[@EricCoffie]

You can’t

[@knrb7137]

Thank you because I watched other videos on Limitations and they are not as clear as yours. 🙏

[@EricCoffie]

Glad it was helpful!

[@davinablair8251]

Thank you for this information. I was told I could completely subcontract. I haven't started yet ( own lawn service and marketing/hr training firm). A woman minority business. Decided to reach and found you on udemy. Will be a faithful subscriber as I want to do this correctly.

[@EricCoffie]

Glad it was helpful! No they told you wrong. However, there is always a work around.

[@davinablair8251]

@@EricCoffie i think i watched 30 of your videos so far. 😅. I'm doing your free course now and plan on investing in the other course once I'm finished.

[@DewiiAljoe]

Very good information and tips

[@EricCoffie]

Thanks.

[@mikegolden3131]

So question... my brother is trying to get me to start a sub contracting company.. from what he is explaining to me is it’s as easy as starting a company name, getting a DBA license and then start bidding on jobs.. he’s thinking we can just middle man these jobs and sub contract and not have to do one bit of the work. It can’t be that easy..

[@EricCoffie]

No it’s not but that is the correct path

[@chrismach454]

Do it all the time just gonna know your prices

[@darealjwats]

@@chrismach454 hey can you mentor on this topic?

[@cliftoncoker1847]

Hi, what incentivizes a subcontractor to allow you to put their employees on the prime contractor's payroll? Is it possible the subcontractor may find that threatening... considering the fact that they may feel as if it opens the door for the prime contractor to "steal" the subcontractor's employees? I'm new to this and I want to be sure I am compliant and doing everything by the book, so this video is very helpful. At your convenience, please let me know your thoughts on the above. I appreciate your time and assistance.

[@EricCoffie]

Maybe but we just tell them that they make the same profit regardless

[@EricCoffie]

And we mean it

[@cliftoncoker1847]

@@EricCoffie thank you, sir!

[@atlantapreneur]

Eric, if we are in a field like I.T. where the demand is greater than the talent. It would be hard to hire 8 people as W2 employees for a short term. I can see if the project is a year or more, but for something shorter, that would be difficult. Also, for someone starting out, that would bring a lot of things into play such as the Burden Rate.

[@EricCoffie]

Start small hire consultants as needed

[@trishfl8545]

Another fantastic video Eric! Thank you for sharing this information in clear way

[@EricCoffie]

Nice

[@Kevin-wj9vd]

Awesome and thorough info! 🔥🙌🏽….. What do you mean by using “payroll company” ?

[@EricCoffie]

Companies like ADP who handle all your payroll for you .. all you do is cut them 1 check and they manage reporting taxes etc

[@7Love7Yah7]

How would you know the percentage of work for admin, quality control, and management work? or is the percentage divided up by the payment as you did described on 5:20

[@EricCoffie]

Based on contract

[@DewiiAljoe]

Doing A Replay

[@SPARKWISDOM]

There are so many folks that think this is okay and it's not. Then, there are companies that reach out and ask us to be a pass through firm. NO! I'm not going to jail for anyone.

[@EricCoffie]

Hahaha 😂 I’m not going to jail either. They call me with this foolishness.

[@GavinMestler]

Loved this video Eric! Question for you: Can I sub 100% to a similarly situated entity?

[@EricCoffie]

Yes you can

[@888manifestations2]

Thank you EC

[@EricCoffie]

You are welcome

[@foxxxy661]

“You’re getting info from your cousin, you’re getting info from Ray Ray and nem” 😂😂😂😂😂😂😂😂😂😂😂😂.....facts!

[@EricCoffie]

It is always the case!! 100% of the time!!

[@shantryce375]

Thank you!! Ive been waiting on this video!!!!

[@EricCoffie]

Glad you liked it.

[@juanm.aguayo-leal9795]

Great video! Thank you!

[@EricCoffie]

Your welcome

[@kensalas1173]

we are working with a large prime, and we have to perform 50% of the logistics contracted

[@kensalas1173]

Eric, what I've found with this prime, is that they help you figure out the math and help make sure we are compliant.

[@EricCoffie]

That is perfect. But most people do not have that luxury. They are the ones responsible for figuring it out.

[@stoodlobster1843]

“RAY RAY NEM” yeaa be safe OG💪🏾

[@EricCoffie]

You know who I’m talking about

[@cliftoncoker1847]

Also, if the prime and sub are splitting the payroll/employee set up, should we be providing the client with both of our certificates of insurance?

[@EricCoffie]

No just the prime .. the sub provides to you

[@michaelhedge7867]

Eric, Thanks for the video. I am really glad I watched this because I was told the same thing but had my concerns. We recently just started actively searching for solicitations. There is a current solicitation that is a Lawn Maintenance contract. I am partnered with various lawn companies throughout the U.S. and my plan is to sub the services out to them, while I maintain the Admin piece. This is a 5 year contract with a fairly large payout. So for this scenario, if my partner quotes me 100k, could I bid 200k in order to make them whole? Or of that 100k, whatever that percentage is for paying there employees....I add there employees to my payroll and pay them instead? Hope the question makes sense. Thanks in advanced if you find time to answer.

[@EricCoffie]

No. You just add their employees to your payroll to make whole. You do not double the bid.

[@michaelhedge7867]

@@EricCoffie thanks for taking the time and for the video content...it has helped alot.

[@JosephTorres-jy3kv]

I have a question lets say for example you get a contract for 1 million dollars. What percentage of that would you pay yourself? My second question is when it comes to tax season do you have to pay taxes on the contracts you earn since you are an LLC right would you have to put aside 30 percent from the gross profit from each contract you get awarded?

[@EricCoffie]

Take my free course .. freeGovCon course.com

[@murphytwin]

This was really helpful. Thanks!

[@EricCoffie]

Glad you enjoyed it

[@kalabasrate9578]

I really appreciate that ...

[@jonmichael9379]

Hey Eric. I have a small drywall company but right now my only project is finishing up, but I don’t want to lose my guys and want to be a subcontractor to another drywall company to keep my guys busy in the meantime. What are the steps to do that?

[@ghost9006]

Question…what does it mean when you have to self peform the work?

[@EricCoffie]

You have to do the work with your own staff

[@82powpow]

do i need to have any special licenses or permits to be a prime contractor. example. VA hospital needs elevators replaced. disabled vet set aside.

[@EricCoffie]

No special permits to be a prime unless contract specifies

[@82powpow]

@@EricCoffie so i can be the prime with no experience in the actual field. as long as my subcontractors are all licensed in their trades i’m good to go?

[@joeytunez]

Eric “no you can’t sub out the work” Shows plans on how to legally sub out the work I love this show 😂

[@EricCoffie]

Exactly

[@renegadephilosopher5996]

Ooooooooooooohhhhhhhhhhh. So it only applies to set asides. I wasn’t understanding what set aside meant. So this wouldn’t apply to something like reselling or micro transactions or simplified acquisitions or huge contracts that aren’t restricted. Correct?

[@EricCoffie]

Correct

[@renegadephilosopher5996]

@@EricCoffie That actually is great news as I’m looking to start the process. My business would be new and impossible to provide any physical labor. So that makes this feel less daunting.

[@anriekobrown5572]

What would IT AND SOFTWARE ETC GO UNDER

[@EricCoffie]

NAICS beginning with 5

[@xXTheNothingXx]

What is a restricted solicitation vs unrestricted?

[@7Love7Yah7]

So if it only applies for restricted solicitations could we fully sub out the work for unrestricted solicitations?

[@EricCoffie]

Yes

[@EricCoffie]

Excellent question

[@irlhesays918]

Good Stuff!

[@EricCoffie]

Thanks!

[@JBraye]

Brilliant. Thank you.

[@mosl2te]

@Eric Coffie so 1099s cannot be used on the left side of your grid- correct? However, aren't they what you use on the right side of your grid?

[@EricCoffie]

No. You can only use employees. 1099 are contractors they do not help you reach your goal.

[@mosl2te]

@@EricCoffie Thank you!

[@ethanmurphy2829]

If I was a prime contractor with a set-aside certified business, would I be able to subcontract 100% of the work if the order is under the SAT of $250,000? Would this same scenario be possible if I didn't have a set-aside business but a normal LLC?

[@EricCoffie]

Nope 👎🏾

[@thesilentgiant]

What about health insurance & etc for those employees

[@EricCoffie]

That’s why you use a payroll company .. they will handle everything with no loss of service

[@ndabrickswitunk2985]

Great Information my only question is when you put the 8 people from the subcontractor on your payroll, what tax papers would you give them now that they are on your payroll or would that fall up under your company as far as the taxes go

[@EricCoffie]

They fall under your company

[@chazmarhall]

Great video..New business owner

[@EricCoffie]

Welcome

[@johnistv7356]

Hey I’m there , I’m 20 and have been really interested in sub contracting for a while now not sure yet specifically what I kind of services to offer but if anybody is willing to give me any advice on where to start and how to set my self up for success I’m all ears

[@BeautifulMugg]

I’m confused are you hiring the 8 people from his team to work for you. Or 8 separate people, with no attachment

[@EricCoffie]

You are hiring form his team

[@mojazzn9091]

Will government contract sites experience inspection/requirements of local Teamster unions as to who is working at the site

[@EricCoffie]

No

[@TheCrazyga912]

Does this pertain to just government contracts?

[@EricCoffie]

Yes specifically federal

[@darealjwats]

@@EricCoffie this is not for VA contracts though, correct?

[@rudolphblanding5751]

Can't see the writing with the green marker

[@EricCoffie]

Sorry I’ll redo

[@rickreiter3617]

Eric, wouldn't it be possible to second employees from the subcontractor in order to meet the 50% requirement instead of hiring them and paying them through a payroll company?

[@EricCoffie]

"second" don't understand the question

[@82powpow]

i think he meant hire

[@janwheeler6094]

What about workers comp insurance if they are only employed for 2 months on your part also that could add up to a lot of w-2's at the end of the year for only a couple of months work

[@EricCoffie]

Not if you use a payroll company. They can keep all of that straight during the time where they are on payroll. I add and subtract employees all the time and only pay workers comp on the payroll that they receive, its a % of the salaries.

[@thebalancedfamily823]

Hello Sir Eric new subscriber here! I'm a independent contractor but I have ppl who work under me as a 1099. Am I required to have workers compensation?

[@EricCoffie]

Not necessarily. But also depends on the job.

[@guywichmann9361]

okay any rules for drywall finishing????

[@EricCoffie]

Specially trade 238 is 25%

[@guywichmann9361]

Thank you.

[@BLULIU]

@@EricCoffie what that includes? Meaning that what work do I need to do to make it 25%? Also, the 50% and 15%?

[@allenwhite1971]

@@BLULIU it was all explained in the video.

[@MaryThiboudeax]

lol...Compass Circle is DEFINITELY spreading that rumor.

[@EricCoffie]

That is probably why so many people keep telling me these things.

[@minutemaids1643]

Yes she is and charging a arm and a leg for capability statement that she threw together she is getting people in her mentor ship only to charge them to ask her a question she is definitely putting out misinformation as well

[@MaryThiboudeax]

Minute Maids ....there is so much I could say but to anyone reading this...just avoid Compass Circle at all cost. 🙅🏾‍♀️

[@th3metronome]

Minute Maids I was a victim. Paid $199 for her to read me a damn RFI!!

[@th3metronome]

j81jevon please do tell 🤔

[@darrenfranklin257]

how do I send you a email? I have a question?

[@EricCoffie]

Look inside the notes section - [e-mail]

[@Gabriela-sp3op]

Hi Eric, I have a question: How do I hire staff to be a subcontractor for a construction prime contractor?

[@EricCoffie]

The question in unclear

[@DigitalDollarLabs]

No 1099s. So w-9? W-2?

[@EricCoffie]

Exactly

[@baraka7004]

Getting the information from "Ray Ray" 🤣

[@EricCoffie]

Exactly

[@koushikkumardey6069]

Legalities in freelancing subcontracts

[@EricCoffie]

Very important

[@mikenebgen4072]

Don't use green or blue marker pen. Can't read it.

[@EricCoffie]

Thanks Mike

[@Johntaford]

Still Learning!

[@irlhesays918]

Ray Ray nem caused me not to do the research I should have been doing!

[@EricCoffie]

Not Ray Ray nem