Top Teaming Tactics: From “In” to “Win” Judy Bradt, CEO
INTRODUCING:NAME, COMPANY5 WORDSTO DESCRIBE WHAT YOU DO
Tools For Each Steps Strategy Focus Process Competition Teaming Relationships Marketing 3
What You’ll Learn Defining Fit: What Primes Really Want Determining Fit: Creating Your Checklist Teaming Types Teaming Agreements & Beyond Building Fit: The Meeting & Briefing Toolkit
What Is a Small Business? SBA Size classifications: – Small – Other Than Small Varies by NAICS – Average annual receipts over 3 years or – average number of employees over 12 months. – You pick your NAICS, but . . . – . . . The Contracting Officer (CO) assigns the NAICS that sets the size criteria for that procurement.
Why Size Matters Affiliation – Can disqualify companies for “set asides” due to partners’ combined size. – Locations / industries irrelevant. – One business has real/apparent power/control over another. 13 C.F.R. § 121.103. – Prime is an Ostensible Subcontractor Ostensible subcontractor – Subcontractor performs primary/vital requirements of prime contract. Business are considered to be affiliated.
Why Team? Leverage SBA affiliation rules Increase competitiveness Reduce risks & costs Gain past performance Address licensing / certifications / bonding Access contract vehicles (Large & small) Meet small business / subcontracting goals Ensure local roots
Teaming By The Numbers: 76 – 54 – 8 - 62 Large to Small Small to Small Large to Large Complex Teams
2011 3-Year Bidding: Down 50% From 20072011 VIP® Survey: Trends in Federal Contracting for Small Businesses
3-Year Win Rates Down (Prime and Subcontracts)2011 VIP® Survey: Trends in Federal Contracting for Small Businesses
Benefits: To “Big” Businesses Meet small business subcontracting goals. Access “set aside” contracts Project-based access to niche expertise – Keep focused on core competencies. – Get essential expertise @ variable cost
Benefits: To Small Businesses Access set asides and niche expertise. Contracts are becoming more complex, larger (“bundling”) and geographically dispersed. A small business by itself may not have the resources to do the whole job. Build past performance & reputation by association Economies of scale: More purchasing power Easier access to capital and bonding.
Pre-Teaming: Gap Analysis Can you go it alone? Go for it! Requirements exceed your core competencies? Gap analysis to pick partners. RFP My Capabilities My Partner Agency Needs: I Have: Must Have: A. = A. + a. B. B. b. C. c. C. D. D d. E. E. e.
Partners Look For… What business you bring Where can you take them? Buyer contacts Core capabilities & differentiation Past performance & reputation Price, financial strength Personnel experience & low turnover Location Dependable, responsive team player
What Can You Bring? New Task Orders on Incumbent Business New Projects You Can Help Them Win Solutions to Known Problems Contacts You Can Offer Benefits For Their Clients Track Record On Relevant Past Projects Cleared Staff Location
Affiliations& Joint VenturesRelationships Without Dirty Dancing
Teaming in Federal Contracting FAR Subpart 9.6– An agreement: between two or more companies to form a joint venture or partnership to act as a potential prime contractor (JV model); or between a prime contractor and one or more companies proposed to act as subcontractors under a particular Government contract or acquisition program (prime/sub model);– Entered into prior to the submission of a proposal in response to an RFP; and– Must be recognized if disclosed in a proposal, or after contract award if approved before becoming effective.– Temporary, not permanent
Other Key Teaming Concepts Project-specific is typical Mentor – Protége: Expanding! – Contingent & Non-Contingent 8(a) & MP Programs under review
The Big Four Teaming Types Prime Contractor / Subcontractor Joint Venture Mentor – Protégé General Services Administration (GSA) Contractor Teaming Agreement (CTA)Others: Licensing, distribution, coop R&D
Prime Contractor/Subcontractor Most common Prime has direct contact and responsibility (privity) with the government Prime is in control – Wants flexibility (vs. subcontractor desire for guarantees) Subcontract might require review by contracting officer and/or finalization prior to the final offer to the government.
Prime Contractor/SubcontractorFAR clauses that can “flow down” to the sub: Mandatory: FAR requires these. Often public policy (e.g. equal opportunity, drug-free workplace) Advisory: Included to protect the prime. (e.g., termination for convenience, changes) Negotiable: Situational usage / Discretionary Read, Review, Reflect…and be ready to Revise or Reject. Understand compliance & costs. Get Legal Advice, Early & Often.
Prime Contractor/SubcontractorA Small Business must perform a minimum work percentage for set-asides: – Service: > 50% of the cost of the work. – Supplies: > 50% of the manufacturing costs, excluding materials – General construction: > 15% of the costs, excluding materials. – Specialty construction: > 25% of the costs , excluding materials.
Mentor - Protégé Experienced contractor assists a less experienced small business. Mentors benefits can include: – Management, financial and/or technical assistance – Loans and/or equity (40% limit) investments. – Cooperation on joint venture projects – Opportunities to subcontracts under its prime contracts
Mentor - Protégé Mentor benefits can include: – Credit toward subcontracting goals – Financial reimbursement Common Mentor Requirements – Might be large or small – Capability & commitment to assist Protégé – Profitable the last two years – Knowledgeable in government contracting and in good standing
Mentor - Protégé Protégé requirements vary by program: – Must be a small business – Some require socio-economic designation. – MP programs include: SBA , Army, DHS, DOE, FAA, NASA, HHS, State Department, Treasury Department, DOD, GSA Cost Reimbursement / Credit Varies – DoD Programs often cost-reimbursed – Civilian agency programs usually credit-only
A Word On Mentor-Protégé “Give Me Your Car Keys.”John Long, VP Business Development,Civil Systems Division, Northrop Grumman
Joint Venture Limited purpose partnership. Each party liable to government & 3rd parties. Can be JV agreement or new legal entity – e.g. LLP/LLC/Corp, DUNS, CCR, ORCA, banking – JV partners “affiliated” for size classification. Qualified SDVOB, 8(a) and Mentor – Protégé JV’s may be exempt from affiliation, based on size of contract and sizes of participants
Joint Venture Must be approved before proposal submitted – Size eligibility: FAR 19.101(7)(i) – Defines how partners share work, risk, responsibility, profits Each party has privity with the government 3/2 rule: JV can do up to 3 proposals in 2 years Agencies may have preferred JV arrangements / forms. Ask!
GSA Contractor Teaming Arrangement (CTA) GSA schedule contractors create joint turnkey offering that neither could provide alone. Not a subcontract or JV: Each contractor has privity. No new legal entity is formed. Note: Non-schedule holders can’t do a CTA, but may subcontract to schedule holders using traditional subcontracts. More :
When Teaming Becomes Affiliation FAR & SBA Definitions Key Concept: Control – direct or indirect; actual or potential; mutual or third party – Ownership (eg voting, stock, options, trusts) – Management or common facilities – Contracts (JV, franchise, licensing, teaming) References: FAR Subpart 19.1 & SBA 13 C.F.R 121.103 GCME: p 115
The Teaming Agreement (TA) Private contract between two or more parties governed by contract law & Uniform Commercial Code – Interim agreement – Superseded by negotiated post-award contract Post 2010, law requires – Bid-win-perform on subcontracting plans – 90 day payment accountability to subs Terms & obligations govern relationship of the parties. Enforceability requires specificity & clear statements.
Nondisclosure Agreement (NDA)Precursor / support for teaming – Defines proprietary or confidential information and exclusions – Provides the purpose for disclosure – Limits use by teammates and disclosure to 3rd parties – Protects existing client and vendor relationships – “One-way” or “two-way” Read theirs. Draft yours. Get Legal Help. More :
Other Potential Non-Binding TA PrecursorsOn-Ramps from discussions to a TA Letter of Intent (LOI) Memorandum of Understanding (MOU) Memorandum of Agreement (MOA) Agreement to “explore the relationship”. E.G.: issues to be addressed in TA, minimum binding terms, key points
Mini-Case #1 Agency publishes RFP Your past performance covers 4 out of 6 mandatory requirements Your company holds a GSA Schedule Contract is set aside for HUBZone Your company is WOSB/SDVOB – Would you bid solo, or team? – If team, what kind & why? – What else would you want to know?
Teaming Agreement Essentials:What Could Possibly Go Wrong?
Teaming Agreement Essentials How Will You Handle: Proposal Costs FARS Flow-down Bid & WIN NonDisclosure Pricing & Payment End User Access Exclusivity Intellectual Property Confidentiality Key Resumes Terminations Employee Poaching! Shared Expenses LiabilityResource: National Contract Management Association www.ncmaHQ.org
Building Fit: The Meeting & Briefing Toolkit1. Market Research Essentials2. The Unique Value Proposition3. The Tailored Capability Statement4. Six Simple Slides in 600 Seconds5. The Follow-up Sweet Spot
Pre-Teaming: Find The BusinessExample Notes Reactive Proactive >$25K open/awarded & pre- √ √ solicitation info Prime subcontracting needs √ Procurement forecasts √ Subcontracting directory & √ √ procurement forecast DOD subcontracting plans √ √ Procurement histories √ Shows, publications, Other matchmaking, prime √ √ websites, industry days
Typical Research Questions Which agencies’ problems do I solve? When do current contracts expire? What contract vehicles do they like? What set-asides do they favor? Who are the incumbents / competitors? How soon do I position for teaming? Who are “small” partners / competitors?
Unique Value Proposition Concise appeal In your audience’s language, Focused on their needs, problems, issues.What solution "Our interactive 3D maintenance training aids allowHelps who people who maintain and repair military equipmentDo what to accelerate learning in complex equipment, thus enabling first-time-right repairs andTo solve what optimizing operational readinessproblems? at a lower cost."
Basic Capability Statement Core Competencies Past Performance – Prime, Sub, or Commercial – Relevant Projects, Value, POC – Contract Vehicles Unique Value Proposition / Differentiators Company Data – Revenue, Employees, Locations, DUNS, Certifications, NAICS Contact Information 61
Tailored Capability Statement Your Contact’s Top Needs Relevant Past Performance, UVP Suitable Contract Vehicles Project-Specific References
Capability Briefing: Six Simple SlidesWho You Are Core Capabilities The OpportunityBasic Company Info 1. Specific 2. agency, project 3. 4.Unique Value Past Performance Meeting ObjectivesProposition Show where you’ve done it before GCME p. 128
The Follow-up Sweet Spot Were these the right people? – Today? – Referral to someone else? Apathy Pestilence What questions remain? – Yours – Theirs When & how to follow-up? Need more materials? Got everyone’s card?
Avoid Five Top Teaming Traps Be selective. Do your homework. Read rules & seek SBA guidance. Use a teaming agreement. Bring business.
Due Diligence Resources Open (Victory In Procurement) Forum: Government Contracts www.openforum.com/governmentcontracting Past Performance Information Retrieval System http://www.ppirs.gov/ Open Ratings http://openratings.com/ Excluded Parties List System https://www.epls.gov/ D&B PAYDEX https://www.dnb.com/product/ptpsampl.htm Uniform Commercial Code http://en.wikipedia.org/wiki/Uniform_Commercial_Code
Teaming Agreement Resources DOD Guidebook for Facilitating Small Business Teaming Arrangements www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Sm all_Business_Team_Arrangements.pdf SBA Table of Small Business Size Standards www.sba.gov/sites/default/files/Size_Standards_Table.pdf Teaming Agreement Enforceability http://www.whaylaw.com/Teaming_Agreement_Enforceability.htm Non-Disclosure Agreements http://www.bitlaw.com/forms/nda.html http://www.wipo.int/sme/en/documents/disclosing_inf.htm
Mentor-Protégé & CTA Resources SBA Mentor – Protégé Program www.sba.gov/content/mentor-prot%C3%A9g%C3%A9-program DoD Mentor-Protégé Program http://www.acq.osd.mil/osbp/mentor_protege/ GSA Contractor Teaming Arrangement http://www.gsa.gov/portal/content/200553
What You Learned Defining Fit: What Primes Really Want Determining Fit: Creating Your Checklist Teaming Types Teaming Agreements & Beyond Building Fit: The Meeting & Briefing Toolkit
Advice on Government Contracting Free Good Enough Pick any two.
Effective Teaming Resources Book & Workbook OnSite Sessions: “Strategy In A Day” “Awesome Market Research” www.GovernmentContractsMadeEasier.comJudy Bradt, CEO (703) 627 1074 Judy.Bradt@SummitInsight.com