August 23, 2011

Winning competitive bids for government contracts is very challenging. The bidding process is long and complicated; the reporting requirements are onerous and the competition is intense.

Despite the challenges, government contracts are great. The government always pays. Good performance leads to more contracts.  Governments are not as susceptible as private sector companies to economic downturns. If you have never won a government contract before, then competing directly with more seasoned bidders may not be the best approach. Consider participating as a sub-contractor to another company’s (the prime contractor) bid. This strategy is a “back door” to winning government bids.

If you want to operate successfully as a subcontractor, you must:

Find the right prime contractor

Like any partnership, there needs to be a good fit between the subcontractor and the prime contractor. If the relationship is successful, you may be working together for many years on multiple projects. Beyond fit, it’s important that you partner with a prime contractor that brings something you don’t have to the table. Usually this means a company that already has a track record winning government bids. Partnering with a company that has zero experience winning bids is too risky and isn’t a good use of your limited resources. Find a winner.

Position yourself appropriately

Once you find a prime contractor with a proven track record of winning government bids, why would they work with you? That is where positioning comes into play. Ideally, your company provides a specific expertise or track record that the prime contractor doesn’t possess.  Maybe they are bidding for a contract that goes beyond their traditional scope of work. The prime provides the know-how of winning government contracts and you provide the execution expertise to do the work. That is an ideal arrangement.

There are other assets that you could provide beyond expertise. If your company is owned by a woman, a member of an ethnic minority group or veteran, the Federal government offers certain advantages to bidding groups that include companies owned by members of these groups. If your company is small, there are also requirements that contractors engage small businesses as subcontractors. Find out what the prime contractor’s needs are and position yourself effectively.

Make yourself invaluable to the prime contractor

The prime contractor on a government bid has effect three jobs. The first job is to perform their portion of the work as described in the winning proposal. The second job is to manage and supervise the subcontractors to ensure they execute as promised. The third job is to comply with the administrative and auditing requirements that the government requires. While a subcontractor can’t do much to help them with the first job, there are opportunities with the latter two.  Adapt your work procedures as needed to facilitate the prime contractor’s ability to manage you and report on your work. Consider developing weekly or monthly reports in a prime contractor-approved format that summarizes the work completed during the period, potential challenges to face and project-specific metrics that will reassure the prime contractor that things are going well.

With respect to the third job, make sure that all of your project-related records are organized, searchable and available as needed to the prime for reporting and auditing purposes. Any organization that receives more than $500,000 in Federal government money is required to comply with an OMB A-133 audit also known as a “Single audit.” These audits—to paraphrase the words of those that have gone through them—“are brutal.” Within a small prime contractor this audit could require that the principals dedicate several weeks of time to comply with the onerous requirements. As a subcontractor, you can help by responding to information requests as quickly as possible. During the audit period, offer to manage some elements of the project that go beyond your original scope of work.

There is a brighter future ahead

Just because you start out as a subcontractor doesn’t mean your company can’t also be a prime contractor on future contracts. Take it one step at a time. Federal, state and local governments will always have money to spend. Take the time to understand how they like to engage contractors, the quality of work they expect and the intangible attributes to the relationship that can make it a success. You will be in a much better position to win RFPs in the future if you have executed successfully as a subcontractor.

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Join the conversation ( 1 )

• DAVID BAL 8 months ago

  

  This is sage advice and from a common sense standpoint makes perfect sense. The big boys are going to win those contract because of their resources, experience and expertise. So focus on their success.http://www.signsnowmillcreek.com/home/construction-signage/construction-project-signs.html