Are two businesses better than one?
For many small businesses, teaming with a larger and more-established government contractor as a subcontractor may be a great way to gain experience and build a reputation with government agencies.
Despite the many advantages of teaming, subcontractors can sometimes find themselves out in the cold if they don’t take the proper steps to assure inclusion once the contract is awarded. In fact, according to the American Express Trends in Federal Contracting for Small Businesses report, 31 percent of small business government contractors reported that they participated on a winning bid as a subcontractor, but the prime contractor never used them during the fulfillment of that contract.
No need to be pessimistic! Many small businesses (including my own) have fruitful experiences teaming up as a subcontractor. Here are three ways to help subcontractors receive their share of a winning bid and put themselves on the path to more work.
Speak with the right people
When I first started working as a subcontractor, I made the common mistake of only marketing my business to the prime’s project manager. By doing this, I missed out on the opportunity to showcase my certifications and capabilities to the rest of the prime contractor’s company starting with the small business liaison officer. Building a rapport with the small business liaison officer might help lead to future projects throughout the company.
Beyond your relationships within the prime’s organization, it’s also important to build a relationship with the Office of Small & Disadvantaged Business Utilization (OSDBU) officer at the agency awarding the contract. This relationship serves two purposes. First, the officer can speak to the prime on your business’ behalf if you are being shut out of a contract you helped win. The SBA’s subcontracting regulations helps to define the responsibilities of the contracting officer and protect subcontractors. Second, building a relationship with the agency’s OSDBU provides a chance to build a personal relationship with the awarding agency for future contracting opportunities.
Seek legal counsel
When finalizing a teaming agreement and paperwork, engaging the advice of a qualified attorney is one of the best ways you can help avoid surprises and misunderstandings as a subcontractor.
Legal counsel can ensure that the project start date and duration are clearly spelled out in the subcontracting agreement and paperwork, along with other important details such as deadlines, roles and responsibilities, and when and how you’ll be paid.
If you don’t already have an attorney, consider asking your local Small Business Administration (SBA) office for advice. Their assistance can also go a long way in forging an effective teaming agreement. The local legal teams can also help your business determine if and when you need to seek additional, personalized counsel.
Additionally, the SBA has an extensive Subcontracting Assistance Directory that provides resources for small business subcontractors.
Make sure you get paid
The best way to make sure you get paid is to have a strong contract with a payment schedule that has been reviewed by an attorney. If trouble arises, speak to the OSDBU representative at the agency involved. They have the ability to withhold payment to prime contractors that aren’t paying subcontractors.
One small business that I mentor was faced with this issue recently. Despite the small business’ numerous requests to the prime, they were not being paid on time. By raising this issue to the OSDBU office of the responsible agency, the entrepreneur found an advocate who was able to help the small business and prime agree on an efficient payment cycle.
While some businesses may get shut out of subcontracting, many small businesses find success by teaming and working as a subcontractor is a great strategy for companies to get experience working with the government. Not already involved in subcontracting? Start by registering your company with the Dynamic Small Business Search (DSBS) database to connect with other businesses seeking teaming partners. Compliment these efforts by introducing yourself to agency representatives through networking events. You can find a convenient calendar of agency events that’s searchable by location at GovEvents. There is a lot to be gained by teaming, but it pays to put in your time up front to make sure your business can focus on fulfilling the contract and future growth!
Lourdes Martin-Rosa is the president of Government Business Solutions (GBS) and the American Express OPEN Advisor on Government Contracting. Since winning its first contract from the U.S. Department of Homeland Security in 2009, GBS has worked with numerous federal agencies including the U.S. Department of Energy, U.S. Department of State and the U.S. Department of Defense.