The short version: A prime that wants veteran-owned and woman-owned subcontracting credit has to do three things well: verify the subcontractor's status from an official source, understand how the limitations on subcontracting count the dollars, and confirm that a clinical staffing firm can actually supply licensed, screened clinicians. This guide walks through each step using SBA, VA and OIG source text, and ends with a checklist you can adapt. It is general information, not legal advice.

Why primes look for VOSB and WOSB subcontractors

Under 13 CFR 125.3, a contractor that is not itself small and wins a contract with subcontracting possibilities must submit a subcontracting plan to the contracting agency when the contract is above $750,000 (or $1.5 million for construction of a public facility). The plan must reflect maximum practicable opportunities for small businesses, set goals in total subcontracted dollars and as a percentage of subcontract dollars, and describe records, including source lists, for several categories: small business, veteran-owned, service-disabled veteran-owned, HUBZone, small disadvantaged, and women-owned small business. The prime must make a good-faith effort to meet those goals.

For a prime on a healthcare staffing vehicle, that makes clinical recruiting a natural place to find qualified small business partners, because the work is labor-intensive and often needs local sourcing in a specific market. The rest of this guide is about doing that without creating a compliance problem later.

Step 1: Verify the status from an official source

Veteran-owned. SBA's VetCert program took over veteran certification from the VA effective January 1, 2023. SBA's page on service-disabled and veteran-owned certification states that SBA certification is required for subcontracting and goaling purposes and describes a grace period for subcontracting and goaling that ran through December 22, 2024. For VA sole-source and set-aside opportunities, SBA states there is no self-certification provision.

Woman-owned. SBA states that firms must apply for WOSB certification through SBA Certifications at certifications.sba.gov to compete for WOSB set-asides. To qualify, a firm must be small under SBA size standards, be at least 51 percent owned and controlled by women who are U.S. citizens, and have women managing day-to-day operations and long-term decisions.

What individual primes require. Your own supplier terms may be stricter than the minimum. One public example: a Lockheed Martin supplier notice dated February 20, 2026 says that, effective February 1, 2026, small businesses that identify as woman-owned or veteran-owned are required to go through the SBA certification process, and that failure to obtain the certification will result in suspension or revocation of status. By contrast, the regulation on subcontracting plans (13 CFR 125.3(b)(4)) lets a prime rely on a subcontractor's self-certification of socioeconomic status when it has no reason to doubt it, with exceptions for HUBZone and service-disabled veteran-owned firms. Because these rules have changed several times, the safe practice is to state your requirement in the solicitation and the subcontract, and to check the current regulation text before you rely on either source.

Step 2: Check registration and identifiers

Ask every prospective subcontractor for its Unique Entity ID (UEI), CAGE code and the NAICS codes in its SAM.gov registration, then confirm them yourself on SAM.gov rather than relying on a capability statement. For reference, Hearthstone & Co. Workforce Solutions LLC is SBA-certified as a VOSB and WOSB and is registered with UEI SVAZQG49VUH7 and CAGE 1ZPE9, under NAICS 561320 (Temporary Help Services) and 561311 (Employment Placement Agencies). Verify those on SAM.gov and through SBA, and see our certifications page for the certificates. We are also NaVOBA-certified as a Veteran's Business Enterprise (certificate 202600352V), which is a separate, private-sector certification and not a substitute for SBA certification.

Step 3: Understand the limitations on subcontracting

This is the step that most often goes wrong. When a small business prime wins a set-aside contract, 13 CFR 125.6(a)(1) says that on a services contract (other than construction) it may not pay more than 50 percent of the amount the government pays it to firms that are not similarly situated. The percentage is measured against what the government pays the prime. Work that a similarly situated subcontractor passes on to others still counts toward the cap, and paragraph (c) excludes payments to similarly situated entities only to the extent they perform the work with their own employees.

On VA acquisitions under VAAR subpart 819.70, section 819.7004 applies the same SBA limits. The rules that matter most to a prime:

  • Who is similarly situated. Only VIP-listed service-disabled veteran-owned businesses are treated as eligible and similarly situated under an SDVOSB sole-source or set-aside, and a VOSB is subject to the same limitations as an SDVOSB.
  • Certification at offer. The offeror must certify that it will comply with the limitations on subcontracting, and offers without the certification are not considered for award.
  • Timing. Compliance is measured by the end of the base term and each option period, or per order, as the contract specifies.
  • Proof. The contracting officer may require evidence of compliance at any time during or after performance, such as invoices, subcontracts or task-value lists.

What this means in practice for a staffing subcontract: if you are a small business prime on a services set-aside, clinical staffing you hand to a firm that is not similarly situated eats into your 50 percent allowance, while a subcontractor that is similarly situated and performs with its own employees generally does not. Under the definition in 13 CFR 125.1, a similarly situated entity shares the prime's program status (a certified VOSB on a VOSB contract, a certified WOSB or EDWOSB on a WOSB or EDWOSB contract) and is small for the NAICS code assigned to the subcontract; the VA rule is narrower for SDVOSB set-asides. We do not assume we are similarly situated on your contract, and you should not either; confirm with your contracting officer or counsel.

Step 4: Confirm the clinical side is real

Status certification tells you nothing about whether the clinicians are licensed and eligible to work on a federally funded program. Ask for these in writing:

  • License verification. How the firm confirms each nurse's license status with the issuing board. For Texas RNs and LVNs that means the Texas Board of Nursing (bon.texas.gov); our walkthrough is how to verify a Texas nursing license.
  • Exclusion screening. OIG maintains the List of Excluded Individuals/Entities (LEIE). OIG states that no federal health care program payment is made for items or services furnished by an excluded person, that anyone who hires or contracts with a person on the LEIE may face civil monetary penalties, and that health care entities should routinely check the LEIE for new hires and current employees. SAM.gov also carries exclusion records. See OIG and SAM exclusion screening for clinicians for what to ask.
  • Employer of record. Who employs the clinicians, and who handles payroll, payroll taxes and workers' compensation. Hearthstone employs its clinicians on a W-2 basis.
  • Insurance and experience. Certificates of insurance appropriate to your contract, and written, verifiable descriptions of relevant experience. Anything a subcontractor cannot document should be treated as unproven.

For the broader credential file facilities and primes typically expect, see our compliance and credentialing page and the staffing agency vetting scorecard.

Step 5: Choose the arrangement

A recruiting partner can be engaged in a few different ways, and the right one depends on where you are in the pursuit. The options we see on our own teaming inquiry form are a subcontract, a teaming agreement, and a recruiting-services agreement. Whichever you choose, settle these points in writing: which party is the employer of record for each clinician, who invoices the government and who invoices whom, how the limitations on subcontracting will be tracked and reported, which flow-down clauses from the prime contract apply, and how exclusion and license checks are documented. Your contracts team and counsel own the terms.

Hearthstone pursues subcontract and teaming roles under primes, which is described on our government contracting page. This guide is the buyer-side companion to that page. We are not describing any open or awarded opportunity here, and nothing on this page is a statement of past performance.

A pre-teaming checklist for primes

  • Status verified through SBA (VetCert or SBA Certifications), not only a capability statement.
  • UEI, CAGE and NAICS codes confirmed in SAM.gov.
  • Your supplier terms on certification written into the subcontract.
  • Similarly-situated question answered by the contracting officer or counsel for your contract.
  • Limitations on subcontracting tracking method agreed, with invoices and subcontract records retained.
  • License verification and OIG/SAM exclusion screening process described in writing.
  • Employer of record, payroll and workers' compensation responsibilities defined.
  • Insurance certificates and verifiable experience received.

Frequently asked questions

Does a subcontractor need SBA certification to count toward my veteran-owned or woman-owned goals?

It depends on the status and on your own terms. SBA's veteran certification page states that SBA VetCert certification is required for subcontracting and goaling purposes, and describes a grace period that ran through December 22, 2024. The SBA regulation on subcontracting plans (13 CFR 125.3) says a prime may rely on a subcontractor's socioeconomic self-certification if it has no reason to doubt it, except for HUBZone and service-disabled veteran-owned firms. Some primes have gone further and require SBA certification from all veteran-owned and woman-owned suppliers. Confirm the current rule with your contracts team and write your requirement into the subcontract.

What is the limitation on subcontracting for a services contract?

Under 13 CFR 125.6(a)(1), a small business prime on a set-aside services contract (other than construction) may not pay more than 50 percent of the amount the government pays it to firms that are not similarly situated. The limit is measured against what the government pays the prime, not against the prime's total costs. VA contracts awarded under VAAR subpart 819.70 are subject to the same SBA limits.

Is every VOSB or WOSB subcontractor automatically similarly situated?

No. Under 13 CFR 125.1, a similarly situated entity has the same small business program status as the prime (for example, a certified VOSB on a VOSB contract, or a certified WOSB or EDWOSB on a WOSB or EDWOSB contract) and must also be small for the NAICS code the prime assigned to the subcontract. Under the VA rule, only VIP-listed service-disabled veteran-owned firms are treated as similarly situated on an SDVOSB set-aside, and a VOSB is subject to the same limitations as an SDVOSB. Whether a particular staffing firm is similarly situated on your contract depends on the contract's set-aside program and the firm's certification, so ask the contracting officer or counsel before you count on it.

What should I ask a healthcare staffing subcontractor to show before teaming?

At minimum: active SAM.gov registration with its UEI and CAGE code, the SBA certification that matches the status it claims, a clear statement of who employs the clinicians, how it verifies state licenses and screens for federal exclusions, certificates of insurance appropriate to your contract, and written descriptions of relevant experience that you can verify. Treat any claim you cannot check yourself as unproven.

Sources

Reviewed against these sources on October 24, 2026. Regulations and prime supplier requirements change; verify against the current eCFR, acquisition.gov and SBA pages before acting. Related government sites: sba.gov, sam.gov and va.gov.

Evaluating a Texas recruiting partner?

Tell us about the vehicle and the clinical roles you need to fill, or book a short call. For facility staffing requests, our placement target is 36–72 hours; it is a target, not a guarantee.

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