Photograph: Bloomberg Government

Contractor teaming strategy: Achilles’ heel or competitive advantage?

November 23, 2015 Tom Skypek

The Set-Aside Trend

With the increase in small business set-asides, capture managers and business development professionals would be wise to ask themselves an important question: Is our company’s teaming strategy an Achilles’ heel or a source of competitive advantage? More often than not a company’s teaming strategy—the process by which prime and subcontractors connect, bid, and execute work—is an afterthought instead of a key dimension of the company’s overall business strategy.

As David Boyajian noted last week, small business set-asides have reached a 15-year high with set-asides representing “58 percent of the federal money obligated to small business in fiscal 2014.” In fact, for the second year in a row, the federal government hit its contracting goal for small business, according to the Small Business Administration (SBA) FY2014 Small Business Procurement Scorecard. Nearly 25% of all prime contracting dollars were awarded to small business in 2014, exceeding the federal goal of 23%.

This trend makes teaming critical for small and large contractors alike—and an area that top-performing capture managers and business development professionals must master. It affects the entire federal contracting industry and companies have two real choices: (1) identify ways to capitalize on this trend by integrating teaming into their overall business strategy or, (2) adopt a passive, and surely less profitable, approach.

Why Government Contractors Team

Like their larger counterparts, small contractors enter into teaming agreements for a number of reasons, chronicled earlier this year in my company’s white paper on the future of contractor teaming:

  • To augment in-house capabilities to become more technically competitive in a bid.
  • To build their brand by partnering with an established brand.
  • To gain experience as a subcontractor to prepare for future opportunities as a prime contractor.

The business case for teaming for large contractors differs slightly:

  • To bid on contracts set-aside for small businesses as a teammate or subcontractor.
  • To become more cost competitive in a bid.
  • To become more competitive in a bid where socioeconomic status is a weighted evaluation factor.
  • To augment in-house capabilities to become more technically competitive in a bid.

Disjointed Tactics Disguised as Strategy

As an alumnus of two large government contractors, I witnessed first-hand the value great contractor teams create for their government customers and the U.S. taxpayer. But I’ve also seen the flipside of ineffective contractor teams—characterized by inter-organizational dysfunction, poor contract execution, and the reputational damage left in their wake. Too often, teaming agreements between and among government contractors are 11th hour, arranged marriages rather than strategic business relationships based on capabilities, trust, and mutual benefit.

If your company’s “teaming strategy” consists of your capture manager’s LinkedIn network or collection of business cards they’ve accumulated from industry luncheons and seminars, then odds are teaming is an Achilles’ heel for your firm. So often these disjointed tactics are divorced from a cohesive business strategy.

Turning Teaming into a Competitive Advantage

Small and large government contractors can dramatically increase their probability of winning government contracts by integrating their capture, teaming, and business strategy work. Questions of teaming and joint venturing should occupy a prominent role in almost all business development discussions. Such dedicated thought will lead to a competitive advantage in a market where questions of teaming and partnering are often neglected.

Follow these steps to make sure your teaming strategy and business strategy are in harmony:

  1. Set up a 4-hour block of time with your core business development team for a hands-on working session. This part is very important: invite the members of your staff who interact with your government customers most frequently, even if they’re junior staff. Seniority doesn’t matter. Invite the best and the brightest of your client-facing staff and you’ll be glad that you did. You want the perspectives of staff who are in the trenches, working with your government clients on daily basis. They have the best window into the client’s current and future (read: new business) needs.
  2. Before the meeting, ask each team member to come to the meeting with a specific problem they’ve identified with the company’s existing approach to teaming—and their proposed solution for fixing the problem along with how they would implement the solution.
  3. During the session, start by reviewing your business strategy–Where are you competing in the marketplace? How are you competing? What is your value proposition and what are your key differentiators?
  4. Then, analyze your sales pipeline–Which federal departments and agencies are your top prospects for driving topline growth?  Which contracts have the greatest potential ROI? Where is your probability of winning the greatest—and why?
  5. Once you’ve answered these questions, have the team think about this: How can the company use teaming to maximize its probability of winning government contracts that will provide the company with the greatest ROI?
  6. From here, you’ll be able to shape a teaming strategy that focuses your resources on building partnerships that clearly advance your business strategy. You’ll be able to target activities in a plan to make teaming a key competitive advantage for your firm rather than an Achilles’ heel.

Tom Skypek is the co-founder and CEO of GovBizConnect.com, an online network for government contracting professionals.

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