Whether in life or government contracting, sometimes you just can not do it alone. You may have come across the term “teaming.” In government contracting, “teaming” refers to a partnership built between two contractors based on a mutual agreement to pool resources for obtaining and performing on a government contract. Companies typically form teaming arrangements before submitting an offer, but they may also enter into an arrangement later in the acquisition process, including after the contract award. Some common types of teaming include Prime-Sub relationships, Joint Ventures, Mentor-Protégé relationships, and Contractor Teaming Arrangements (CTAs).
Teaming the right way with the right partner for the right bid can improve your chances of winning a government contract. This blog explains some valuable best practices to consider for teaming.
Why Team Up
- It helps you fill capability/experience gaps: When you do not have the required technical expertise, past performance, or resources to bid individually, and your company alone can not meet the customer’s needs – whether it is a specific performance area, a mandatory certification, a required bonding capacity, a remote place of performance where you can not perform on your own, or a security clearance that you don’t have, but a potential partner may have – teaming with a partner who has what you are missing can enable you to bid.
- It helps you access opportunities otherwise hard to access: For new businesses, teaming is the only realistic way to enter the government contracting market. Not only does teaming significantly reduce the investment and lead-time required for entering the market, it is also an excellent way to gain past performance that you need to become an experienced government contractor that can bid on opportunities in the future. Past performance is a critical factor in winning federal contracts. Having relationships with partners that offer complimentary services opens up new horizons of opportunities that you can bid on together.
- It helps you “Share the Burden” of work and benefit mutually: Teaming helps reduce your contract performance and financial risks. Moreover, when a small and a large business team up, the large business can do the “heavy lifting” part of the contract work and guide the small business contractor on how to manage a complex contract that a small business could not do on its own. Such small business-prime/large business-sub teaming arrangements also benefit the large business, as they can participate in federal contracts that they would not be able to participate in because of their size. Since a sizable percentage of federal contract dollars is set aside for small businesses, teaming also helps large businesses meet their socio-economic goals by meeting their small business subcontracting plan requirements. From the government’s perspective, a strong team offers reduced administrative burden, better performance, cost, and delivery for the acquired supply or service.
How To Team The Right Way – 12 Best Practices
There are many things to consider when deciding on a teaming or subcontract arrangement, including the type of arrangements, various regulatory compliance requirements, specific rate structures, and operating and entity agreements. Presented below are some of the best practices for teaming:
- Know when to team: Some companies team too much and too often, and some do it too little. What is usually lacking in both cases is the right teaming strategy. When teaming becomes routine on every single bid, there is a chance that a contractor is giving away up to half their revenue. On the other hand, some contractors never team; they are potentially missing out on the chance to expand their reach in the market and offer better solutions to their customers. You should, therefore, know when to team and when not to.
- Know who to team with: You should also know what type of partner you need to team up with. This begins by understanding your core competencies and identifying where the gaps lie compared to what the government requires. Review your current and past teammates that worked well with you as a prime, contributed to the solution’s development efforts and met target rates. Make sure your potential teammate has relevant past performance and a solid reputation with the customer. Additionally, if you are a large business, then team wisely because there is a limit to the number of mentor-protégé agreements you can enter into. You must be strategic in choosing protégés. You should team up with companies where your mutual advantages lie.
- Start early: Successful teaming occurs long before a solicitation is officially released. You should do the groundwork for partnerships by attending conferences, networking events, and local city council meetings. You can also make acquaintances through business associations, publications, forums, and message boards online. By the time a contract solicitation is published, there may not be enough time for you to find a partner, build a relationship, agree to each term and condition and simultaneously write a winning proposal. Therefore, it is a best practice to start early and then plan your win strategy accordingly.
- Start small: Work with your partner on a few smaller government bids before pursuing larger contracts. By doing this, both parties learn about each other’s way of doing business, business structure, and company culture. It also helps you work out the creases in the relationship and devise ways to make future collaboration smoother. It also allows you to give your partnership a track record, which will help you submit proposals to other agencies. This is because agencies review teaming arrangements for risk, and partnerships with a history of working together pose lesser contract risk to the government.
- Carefully evaluate potential partners: Conduct a thorough background check on potential business partners. After signing a confidentiality agreement, review your partner’s financial information and contact their references to hear what they say about them. You can also check their payment history and business scores using business information services that track such information, such as Dun & Bradstreet’s PAYDEX score, which reflects a business’s payment habits, or FICO’s Small Business Scoring Service (SBSS). If you notice any negative marks, such as delinquent accounts, bankruptcy, late payments, or bad credit history, then request more information before teaming with them.
- Choose a partner with complementary services: Within a partnership, synergy is key. Having complementary products or services—for example, your partner is good at products while you specialize in services—will help both of you. As you build such relationships, your partners may find other projects for you to collaborate on and vice versa. This creates longer-term avenues for mutual growth.
- Consider teaming with the incumbent: Establish a teaming relationship with the incumbent, if possible, or a company that will make you more competitive, such as a company with a good relationship and past experience with the target agency. A large business incumbent may serve as a subcontractor on a follow-on set-aside. Having the incumbent on your team gives your partnership an added advantage of winning, as they have valuable knowledge about the inner workings of the contract.
- Consult your legal and accounts team at every step: Draft a complete teaming agreement for the bid. It should cover everything from project start to end, including how each party will be paid. To ensure your rights are protected, run any agreement by your legal counsel and accountant before agreeing.
- Put everything in writing: Once you and your partner have decided to work together, put the details in writing quantifiably, including objectives, deadlines, tasks, and responsibilities of each. Avoid relying on verbal communications when it comes to responsibilities and accountability for deliverables. Many teaming agreements turn sour due to a poorly written teaming agreement. In several cases, these companies end up in lawsuits. To avoid such an outcome, ensure that you and your partner are on the same page on your teaming agreement and that there are no unresolved issues or disagreements.
- Define areas of responsibility clearly: A teaming arrangement can start successfully and yet falter because the parties did not clarify roles and responsibilities ahead of time. Clarify each team member’s role and responsibilities, and update them as the project progresses. Identify specific employees at each company to be liaisons with the other. This prevents miscommunication. From a proposal development perspective, ensure that the proposal preparation responsibilities of all team members are clearly defined to ensure timely bid submission. Statement-of-work tasks must be clearly divided among team members in the event of a contract award.
- Implement Non-Disclosure Agreements (NDAs): You and your teaming partner should sign a non-disclosure agreement to protect any private information within the contract. Ensure that protection of the competition-sensitive proprietary information of each team member is established in the NDA.
- Be aware of the risks: Make sure you stay current on the Limitation on Subcontracting rules and updates to SBA and FAR rules pertaining to subcontracting/teaming. If you are not careful, some types of teaming can be detrimental to your company. As a small business, you should avoid teaming in such a way that the SBA rules your relationship/partnership as an “affiliation” for size purposes or a “pass-through.”
Teaming is necessary when you can not bid on a complex opportunity alone. Our proposal development professionals here at iQuasar are trained in analyzing the requirements of a solicitation, helping you find what capability/experience gaps there are, and advising you on how you can overcome them through teaming. They can help you find the right teaming partners to get in touch with and position your business for your next win.
