Seven Characteristics of a Successful Subcontractor

Wednesday, January 19, 2011

Jon Stout

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Prime contractors that pursue and win major service contracts with the Federal Government often form teams with smaller companies as subcontractors.

They do this to broaden their technical offerings, take advantage of subcontractor customer domain knowledge and develop an extensive pool of qualified engineers and technical specialists.

Assembling a winning team however requires experience and skill and prime contractors look for subs that meet certain defined criteria.  Seven subcontractor characteristics are critical in developing a winning team.

1.       Unique or Exceptional Skills Desired by the Customer

Each customer requirement is unique and in order to develop a winning proposal the team must identify and include team members with the skills the customer requires. Special skills could include expertise in cyber security, advanced software development techniques or system engineering skills.

Examples of this are defining systems requirements for over 8,000 requirements on a major program, utilizing a special Extract Transform Load tool  to solve a software development effort and developing a PKI cyber system for a classified customer.

2.       Possess Extensive Customer Domain Knowledge

Knowledge of the customer, its mission and personnel are mandatory prerequisites to winning. It cannot be over emphasized that intimate understanding the customer organization and operations offers tremendous advantages.

When a multibillion dollar contract award was made to a large team from a major intelligence agency, special knowledge and relationships of the subcontractor was a major success factor for the team.

3.       Extensive Proposal Preparation Skills and the Ability to Clearly Write and Persuade the Customer

Proposals are a prerequisite to winning a contract and proposal preparation is both an art and a science. In the Request for Proposal (RFP) mandatory requirements are detailed and evaluation criteria are established.

Concise and persuasive proposal writing is required because customer evaluators receive a large number of proposals and summary checklists are often used to score winning proposals. Since proposals often have a number of authors that write in different styles and voices, a subcontractor with strong editing skills can be especially valuable to the team.

The customer, through the proposal process, demands clear and concise solutions and a well written proposal that meets the customer's needs is a winning document. This can be seen in a recent large IDIQ contractor where the subcontractor wrote one major sample task order (T/O) and edited a second winning T/O. As a result, the team won a major intelligence agency contract award.

4.       Support the Proposal Process and Meet All Data Calls

Value added subcontractors actively support the proposal process by participating in writing technical and management volumes. The process is complex and requires the collection and evaluation of large amounts of data usually developed through data calls on all teammates. The best subcontracting teammates respond to data calls timely with accurate information.

This is particularly true when the proposal is a response to a major multiyear effort. Subcontractors who always respond before the data call due dates generally gain a larger percentage of work share. Subcontractors with a reputation for performance on data calls are often invited to join teams for new projects.

5.       Develop Aggressive Pricing

Large government projects are competitive and all teammates need to develop aggressive pricing.

Fringe, overhead and G&A forward pricing must be carefully and accurately developed and the customer usually reserves the right to review prices and cost buildup. The best subcontractor teammates understand government pricing models and requirements and eliminate excess costs from their proposals.

One successful subcontractor offers separate benefits packages based upon market demands that allow aggressive pricing and a more competitive cost proposal. This strategy has resulted in a number of team wins.

6.       Use Customer Knowledge to Shape and Win Task Orders

For many large contracts of the IDIQ (Indefinite Delivery, Indefinite Quantity) type, competitive task orders are released that winners must also bid on. The most effective way to win task orders is to interface with the customer, understand its needs and influence the specification of the requirements in a way that teammates can best respond and win.

Subcontractors with marketing knowledge of the customer requirements and who interface regularly with the customer are able to raise the win percentages (PWIN) for awards.

As an example, one small contractor was so entrenched with the customer base of a large intelligence agency that a large contractor bought the company and, as a result, won a multibillion dollar contract award.

7.       A Teammate must be an Aggressive Recruiter

For services contracts the subcontractor must be able to recruit and hire the best qualified individual quickly and cost effectively.

One example of a successful recruiting partner is a subcontractor that has invested in recruiting technology and personnel that enable the building of an available pipeline of skilled candidates with required clearances for contracts with the Intelligence Community.

Those teams that add subcontractors that add real value have greatly improved chances of winning major contracts.

Large government contracts are competitive and winning proposals can be very costly. The best winning proposals are a team effort and the best subcontractors on the team meet or exceed the criteria detailed above.

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