Thursday, April 21, 2011

Teaming in Government Contracting

This article was written by C.P. Krishnan, SCORE Orange County Workshop Presenter

Teaming has been a subject much ignored when it comes to Government Contracting. In the commercial sector, businesses are always teaming to launch products & services. It is not any different in the arena of Government Contracting. The following are areas that address the strategies governing successful teaming.

The federal government is a big supporter and proponent of small business participation. Not only does the government direct a considerable percentage of its procurement to small business, but it expects Teaming to be an important strategic process for achieving it. Some contracts are too large for many small businesses to handle alone. This is where small business can team with other businesses to collectively perform contracts. It is a great way to build credibility and demonstrate proficiency to the government.

Teaming is especially appropriate when contracts require a larger workforce or a higher volume of work than any one small business can handle. There are more and more government agencies “bundling” several contracts into one larger contract to save time and money. The federal government recognizes and encourages teaming arrangements as a way to serve these types of contracts.

Proper Groundwork

A proper foundation is critical for any structure to stand and flourish. It is no different in Teaming. Successful teaming occurs long before the actual solicitation is advertised. Building effective relationships happens through human interactions at various events, conferences, business associations, resource centers, and many other avenues such as these. Mutual understanding and agreements start the road to Teaming.

Screen Potential Partners

Be sure to conduct a thorough background check on any potential business partner. Exchange financial information, sign confidentiality agreements, and talk to references. Check on payment history, business track history, and ask for more information before teaming with them.

Put It in Writing

All details regarding the target contract and the relationship needs to be put in writing. In the written agreement, identify objectives, deadlines, tasks, responsibilities, quantifiable results as much as possible. You will also need to draft a teaming agreement for specific bids. It should cover everything from when the project begins and ends to how the parties will be paid. Have a legal counsel and accountant to review documents before signing.

Start Small

Teaming is a partnership journey and the best test is time. It would be best to work together on a few small government contracts together before going after the large ones. In doing so, both parties will learn about each other’s habits, business structure, and company culture. This will also help in developing procedures that make the joint operation run smoothly. A track record is also established of companies working together successfully.

Define Areas of Responsibility

Define and clarify each team member’s role & responsibilities and update those roles as the project progresses. Designate company-wide contact personnel to act as liaisons to avoid miscommunication on important matters.

Complementary Services

The idea of teaming is not just to have more capacity but to have synergistic capacity. Great teaming relationships are based on partners working together who complement each other and add value to the overall performance.

Joint Ventures & Subcontracting

Depending on the type of contracts pursued it might be conducive to either have a Joint Venture formation or Prime/Subcontractor relationship. Each party must seek counsel and direction from experts in this matter including, but not limited to, legal counsel. In all cases, all items of the arrangements must be in writing and completely understood by all parties before proceeding. The various benefits & requirements for each type of relationship are many and must be thoroughly considered before proceeding.