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Tips to Seal Your Government Subcontracting Deal

Filed under Government Contracting. Fact checked on May 24, 2012.

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To improve your chances of being chosen as a subcontractor to a prime for the government key areas to consider include being selective in your bidding, being flexible in dealing with prime contractors, and effectively selling yourself as the best choice.

You have reached the point where you've done all you can do to prepare to be a subcontractor to a prime government contractor by exploring the numerous opportunities through various sources and laying the groundwork, by doing your homework on prospective primes and the competition. You may have even considered making changes to your operations to better position your company to compete. All that's left is to sign a deal. Is there anything else you should do?

Final steps you can take to get that signature on the dotted line include bidding selectively and wisely, focusing on providing "best value," and putting your best foot forward.

Bid Wisely and Selectively

No business—large or small—is going to win all of the contracts they try for. And subcontracting work is no different. Statistics show that, at best, you will win less than one-third of the contracts you bid on.

With that in mind, in order to seal the deal, our advice is to bid only when you are sure that you have a reasonable chance of success; in other words, only under the following conditions:

  • when you have researched the product or service the prime is providing and you are sure that the prime's needs and your capabilities are a match
  • when your qualifications are a near-perfect match with the requirements
  • when your price is very competitive but still profitable for you

Focus on Providing 'Best Value'

The philosophical criteria that prime contractors use for awarding subcontracts has changed. It used to be that if you were qualified and were low bidder, you would probably win the subcontract. These days, that is no longer true. The prevailing philosophy that governs a prime's decision as to which company will win is no longer "lowest price," but rather "best value."

How, then, is "best value" defined? That's a tough question with no clear-cut answer. Often best value is some combination of quality, price, and performance. It also could be said to be what makes the best business sense. For example, the fact that a prospective subcontractor never missed a delivery schedule could be more important to a prime than the fact that it is a bit higher on price. Even if its price isn't the lowest, when you throw it all together, it is.

Other issues could also factor in, depending on the prime's specific needs or special requirements. For example, a prime looking for creative ways of improving production efficiencies would favor the sub that does a good job and offers that creativity over a sub that just does a good job. To another prime with special training needs, one sub's training experience would probably give that sub an advantage over another that didn't have that experience or didn't offer that added feature.

Therefore, we can say two things, for sure, about best value: (1) it varies from prime to prime, depending on their individual needs and requirements, and (2) lowest price alone just doesn't do it any more.

Note that the procurement philosophy for the government has also changed to best value. That's why doing your homework to find out what your customer's needs are (be it the government or a prime) and focusing on those needs is so important.

Work Smart

Quite often, prime companies have the need, but not the actual technical expertise, to do a job. If you are a top-notch engineer or technical person, you can do quite well as a subcontractor—and you get to create your own hours and vacation time!

Tipping the scales in your favor. As much as primes are looking for quality products at reasonable prices, they are also looking for subcontractors that can help them hold up their end of the bargain with the government and make the contract go smoothly.

Is there anything that could tip the scales in your favor? You can greatly improve your chances of getting the job if you can show that you are willing and able to learn the prime's protocols, do the required conferencing and follow-ups, and familiarize yourself with any required contract details and forms.

As a sub, timing is crucial and communication is essential. Let the prime know that you are aware of this and are ready to satisfy their needs in these areas as well.

Lastly, all things being equal, most primes will choose the subcontractor that they think they can work with the easiest and the best.

Be what a prime looks for in a sub. Becoming a subcontractor takes hard work, persistence and a thick skin for rejection. Even when you do everything "right," you may still be passed over simply because you don't fit the profile of what the prime is looking for.

In deciding whether to use a sub, and which sub is right for the job, primes look at a variety of issues. Should they make or buy? Is it going to be less expensive for them to go out of plant to get the work done? Are there union issues? Is the technology such that they can only buy or use a sub? Does the potential subcontractor have the needed technical ability and qualifications to do the work? Are there socioeconomic considerations in making a decision, like using small, minority-, women-, service-disabled-, and/or veteran-owned, businesses?

Our advice, then, is to prepare yourself and your company to look and function its best so you are ready to take advantage of an opportunity when it comes along. If you are serious about turning the opportunity into a subcontract, be prepared to burn the midnight oil.

Win a Subcontract By Making Sure You Put Best Foot Forward

The following is a review of the actions that will help prepare you to select the primes that match your capabilities and make the best first impression on your potential customer. This list does not include every possible action, nor will every action on the list be appropriate for your situation. But you can use it as a guide as you move through the process. Good luck!

  • Identify what your company does best and what you are most competitive at. If you don't have one, make a list of your company's features and benefits. Think not only in terms of the products or services you provide, but also in terms of what you are capable of providing. Think in terms of possibilities!
  • Check out the products the prime manufactures and the components and services they require to fulfill their mission. Determine which primes match your capabilities-not by guessing or assuming but by thoroughly researching. Select your target primes.
  • Do your research and gather as much information as you can about your target primes. Check out their websites, search the Internet, and check out the Business Reference Section of your local library for articles about the company in the Wall Street Journal, local newspapers, or trade magazines. You will make a better professional impression if you know the basics about these companies when you walk into your first meeting with them.
  • Contact each of your target primes. Ask to speak to their small business liaison or representative or the purchasing office.
  • In your initial contact, focus on getting the right information—i.e., information that will help you decide whether a particular prime offers some real opportunity. Ask about their needs, the type of subcontractor they are looking for, the procedure required to become one of their subs, and the average size of an order. Also ask about any required forms or documents that they may want you to fill out, including their Approved/Preferred Vendor application.
  • Find out what your competition is doing. Your goal is to gather as much intelligence about how they're working with a particular prime as you can. In your initial contact with the prime, try asking about the type of work your competition is doing, how much work they are getting, the kind of relationship that exists, etc. If the prime is not forthcoming with information, drop it and do some detective work on your own.
  • After contacting each target prime, weed out the primes that offer no real opportunity, and fill out any forms of those that seem promising. Make sure that all the information is complete and correct, and that you make a copy of the forms for your files.
  • Preplan the sales call and presentation, and then practice, practice, practice. Never just read the presentation and never present completely off the cuff. Keep your presentation short, simple, and to the point—perhaps four or five slides with three or four bullets per slide. Hit only those points that address the prime's needs, such as the quality of your product or service, timeliness of delivery, related experience, and ability to be a team player. Include any unique ability or quality that singles you out from your competition and imply the competitiveness of your pricing.
  • After the forms are complete and your presentation is ready, make an appointment to meet with the prime's small business liaison or representative. Be professional, friendly, and enthusiastic. Your goal is to convince the prime that working with you will be a good business arrangement for them. What is it that you do best? Emphasize that point again.
  • No matter how the presentation ends—in a quote, in a request for more information, or up in the air—contact the prime again within 7-10 days to continue the relationship. Try to get a definite response if you didn't get one after your presentation.
  • Create your own "good old boy" network. Try to establish some rapport with other personnel of the target prime company, including shop, technical, etc. Take advantage of every opportunity to network with primes and other vendors (yes, even your competition), particularly those vendors that augment your capabilities—you may be able to capitalize on that relationship to get work by partnering. Stay away from gifts and other gratuities. This may damage any relationship, even if offered out of kindness.
  • If nothing happens, "pick up your tent" and move on to the next prospect.

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