- Debunks ten top myths about teaming;
- Give you straight facts about teaming in the real world; and
- Includes tips and free resources to help business owners avoid costly pitfalls!
Association Executives:
Want more great ideas and resources on government contract success for your community?
Business Owners:
Thinking about teaming? Want to see and avoid the risks?
Let’s talk. Contact us for a 30-minute consultation (link is external). We won’t try to sell you anything. And you’ll get at least three ideas you can use right away. Email us at Judy.Bradt@SummitInsight.com (link sends e-mail) or call (703) 627-1074.
Special thanks to Angela Dingle, CEO, Ex Nihilo, for the interview on which this article is based!
Introduction
Here are a few things to think about on your road to teaming!
Myth #1:Teaming brings you business.
Fact: Being on a team doesn’t guarantee work — especially on Indefinite Delivery, Indefinite Quantity contracts. Be wary of exclusive agreements!
- Tip: The Small Business Jobs Act of 2010 holds primes accountable for awarding business to the subcontractors they list in their proposal’s plan. The law says they have to make best efforts to do so or explain why they failed, but doesn’t hold primes legally liable if they fail.
SEC. 1322. SMALL BUSINESS SUBCONTRACTING IMPROVEMENTS amended Section 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) by adding a representation that the offeror or bidder will (i) make a good faith effort to acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from the small business concerns used in preparing and submitting to the contracting agency the bid or proposal, in the same amount and quality used in preparing and submitting the bid or proposal; and (ii) provide to the contracting officer a written explanation if the offeror or bidder fails to acquire articles, equipment, supplies, services, or materials or obtain the performance of construction work as described
- Tip: Primes may list many partners, but they are focused on their own revenue. Maximize your potential for revenue by focusing on the unique capability you bring to the project.
Myth #2: Teaming on government contracts increase your profits.
Fact: Teaming might increase your profits, but only if you price accurately and watch your costs. If you’re pricing for a government contract for the first time, get some help!
- Tip: There’s lots to consider. Are your labor rates compliant with the Service Contracts Act? Do you know what costs and overhead are allowable? Does your cost accounting system meet requirements for audit by the Defense Contracts Audit Agency? If you’re going to need insurance or bonding for your work, you’ll have to factor in those costs, too! Consider working with a broker to get the best rates you can.
- Tip: Many Procurement Technical Assistance Centers (www.aptac-us.org (link is external)) offer counseling or seminars or both on this key issue. Counselors at the Service Corps of Retired Executives (www.score.org (link is external)) may also be helpful. But that’s not easy advice to get at the last minute, so plan ahead to get an appointment.
Myth #3: Winning a place on a government contract increases your working capital.
Fact: Winning a big project can increase your NEED for working capital.
- Tip: Negotiate the terms on payment in your teaming agreement with care. And do the same thing for your own suppliers. You’re not a bank. Make sure they know and agree that they don’t get paid on that government project until YOU get paid.
- Tip: Make sure you have a financing strategy so you can afford to stay in business while you perform the contract. Talk to your banker while you’re still in the proposal stage to find out your options to expand access to capital.
Myth #4: Teaming shares risks and rewards.
Fact: You can talk all you want about shared risks, but the prime’s signature is on that contract. The buck does stop there.
- Tip: Show the prime that you understand how much they put on the line. Most small companies don’t come prepared to put any skin into the game. Stand out: present what you’re prepared to invest in your share of the business development and proposal process.
Myth #5: Incumbents are naturally the best partners.
Fact: Not always. As noted above, incumbents can get complacent, and perform badly. And sometimes the incumbent is an 8(a) partner who’s outgrown their size standard and can’t recompete as a prime! Ask the government buyer what THEY think of the prime…and who else they like.
- Tip: Want to get paid on time? Research your prospective primes’ Dun + Bradstreet rating to find out their track record on prompt payment. You may be stuck with that, but at least you won’t be surprised, and can seek financing accordingly.
- Tip: Attend association events to meet agency program managers and other insiders and buyers…and connect with potential prime contractor partners who are already doing business in your target agency.
Myth #6: Teaming expands your contacts and visibility with government buyers.
Fact: Some primes don’t let subs talk to government customers!
- Tip: If your agreement with the prime limits your direct contact with the end user, how else can you publicize your contribution to the project’s success through community involvement, social media, industry association sponsorships or presentations?
Myth #7: Teaming expands your past performance.
Fact: Teaming only expands your past performance if you perform work on the project. It’s not enough to have been selected for the winning team.
- Tip: Make sure your teaming agreement with the prime specifies your role in the project in the event that your team wins.
- Tip: Beware primes that include your company in the proposal to benefit from your status as a small business or your past performance, but don’t award your company any work after they win.
- Tip: Ask your contacts about their experiences in doing business with partners you’re considering.
- Tip: The Small Business Jobs Act of 2010 holds primes accountable for awarding business to the subcontractors in their small business subcontracting plan. If your prime isn’t following through, and the supplier diversity or small business liaison is unresponsive, document your efforts. Decide whether this is a lesson learned that you’ll walk away from, or something you want to advocate for resolution.
- If you want to push for action, get guidance on your outreach campaign. Consider engaging a lawyer with a background in mediation, and draw on that aspect of her expertise. You’ll want to proceed thoughtfully, so that ideally your company can both win work and strengthen your relationship for future projects with this partner. For instance, if you intend to approach the federal agency’s small business specialist on that contract to alert them to your concerns, would you let the prime contractor know your intentions and give them a chance to respond before you do so? The law says they have to make best efforts to do so or explain why they failed, but doesn’t hold primes legally liable if they fail.
Myth #8:Teaming gives you opportunities to expand and diversify your offerings.
Fact: People want to see you perform your core capabilities before they trust you to branch out.
- Tip: Start by performing strongly in your core role. Then be alert for natural opportunities to provide complementary products or services once the prime and the government buyer gain confidence in you.“Hey, you did a great job on that; can you help us with this other thing?”“Why, as a matter of fact, we’ve done that in a situation just like this…”
Myth #9: As a teaming partner with staff working in a project facility with teaming partners from other firms, you benefit from experience with a diverse workforce in a multi-contractor facility.
Fact: Be careful! Primes and competitors can poach your employees.
- Tip: Make sure your teaming agreement with your employees and the prime include provisions for cross-hiring compensation and/or non-compete post-employment.
- Tip: Figure out how you’re going to keep your key employees with you on the project if the prime delays payment. Will you hire full time staff, or do you need to set up part time or temporary contracts? How will you pay for benefits?
Myth #10: In order to get a clearance, you need a contract, but to get a contract you need a security clearance.
Fact: Primes can sponsor subs for a clearance once you’re on a contract.
- Tip: Get the facts on security clearances long before you need them, and remember that companies with cleared personnel often have an edge over their competitors – one less headache for the prime, and fewer delays in getting down to work.
- Tip: See Everything You Need To Know About The Security Clearance Process, But Are Afraid To Ask, by Diane Griffin, President & CEO of Security First & Associates, LLC. Get this e-book on Amazon at
http://www.amazon.com/Everything-Security-Clearance-Process-ebook/dp/B003LN1XLS (link is external)
What’s next?
First, check out the other free resources at www.SummitInsight.com (link is external)!
Business Owners:
Want to win your next government contract — or your first one — faster, and spend less doing it?
Association Executives:
Want great ideas and resources on more government contract success for your community?
Supplier Diversity Leaders:
Want your elite diverse suppliers to bring you more federal business?
Let’s talk. Contact us for a 30-minute consultation (link is external). We won’t try to sell you anything. And you’ll get at least three ideas you can use right away. Email us at Judy.Bradt@SummitInsight.com (link sends e-mail) or call (703) 627-1074.
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