Posts tagged "Prime contractor"
Nov 14, 2012

A panel composed of the director of the Department of Homeland Security's Office of Small and Disadvantaged Business Utilization, a Vice President and General Manager from Computer Sciences Corporation, and a Founder and CEO of a telecommunications company held a discussion early in November at the Tysons Tower Club.

When speaking about how his agency determines the specifications of upcoming solicitations, Kevin Boshears, Director of the Department of Homeland Security’s Office of Small and Disadvantaged Business Utilization said that his agency “looked at all the tools that we have in the toolbox in order to craft the solicitation, based on the market research results that we receive."  It's very important for small companies to respond to Sources Sought notices, as they allow government agencies to get a better understanding of what products and services are available in the market place, as well as what sort of businesses are capable of providing such services.  For example, if enough Veteran owned or woman-owned firms respond to the Sources Sought notice, it's possible that the solicitation may mark the solicitation as a Set-Aside for that particular business.

From a large prime contractor's standpoint, Patrick Schambach, Vice President and General Manager of Computer Sciences Corporation’s DHS Division, advised that small businesses that want to become subcontractors to a contract should approach Prime Contractors "as a prime".  By that, he means that small businesses should initiate conversation with a specific deal and agenda in mean.  That means identifying the capabilities that you have as an organization, as well as doing research on the Prime Contractor and their requirements prior to coming in and making a pitch.  More specifically, potential subcontractors should establish an intimacy with the client, have a proven past performance with the services being provided, and understanding your organization and how it fits into the big picture.

Meanwhile, Joe Fergus, the Founder and CEO of Communications Technologies, Inc., advised that small businesses must be able to bring a value proposition to the table.  Mr. Fergus advised that relationship building was the key to get the ball moving.  Subcontracting is a means through which a small business can participate and get their foot through the door on a contract.  Constructive dialogue is a must when seeking to participate on a contract with a prime as a subcontractor.

What happens once you become a subcontractor?

Mr. Schambach notes that one of the major keys to continuing work participation is by continuing to build the relationship between the Prime and the subcontractor.  As a subcontractor, you must continue to excel in performing according to the contract requirements.

In terms of protecting yourself as a subcontractor, and that you receive the amount of work that was promised to you, Mr. Schambach advised that you should hold a kickoff meeting with the senior team involved with the contract.  In this meeting, both the subcontractor and the prime have an eyeball-to-eyeball discussion, and they should make sure that they hold the person who agreed to the amount of work guaranteed to the subcontractor accountable. 

Other methods of acquiring government contracts.

It should be noted that the opportunities that are released on FedBizOpps.gov only comprise 20-25% of all business opportunities within the government.  The rest of that government business is being conducted on a task order basis. 

Task orders are a way of acquiring government business.  A small business that is in the process of acquiring such business should ask themselves, “is our organization in a position to prime one of these task orders?” or “how do we get ourselves on a team that would allow us to get into one of these task orders?”

 

 

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Oct 8, 2010

It is first important to know the difference between prime contractor and subcontractor. A prime contractor sells to the government; whereas, a subcontractor sells to who sells to the government.

Prime Contractor
Some small businesses are not aware of what they are committing to when becoming a prime contractor for the government. The government views a prime contractor as the single point of contact, and is accountable for cost and schedule and performance.

One problematic area for a small company working as a prime contractor for the government is payment. A typical company invoices the government 30 days after starting a contract and the government has up to 90 days to respond to that invoice.  The government pays a prime contractor when it sees fit so it could take at least four to five months. Most small companies do not have a cash reserve to put front so much money  and wait months for payment.

Another problematic area is the language and clauses to a contract. Many small companies are unsure of all the terms, acronyms, clauses, references and requirements in a contract. These results in a poorly negotiate contract and the uncertainty of the contract itself.

Subcontractor
In most instances it makes sense for a small business to be a subcontractor. The advantage is the business relationship with the prime contractor and the face to face time.  The prime contractor can also pay invoices within days of receipt and as a subcontractor it will be easier to have access to the information you need to complete the job.

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