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Spoiler Alert! The Truth About (Small Business) Subs and Primes.

Sunday, August 26, 2012   (1 Comments)
Posted by: Guy Timberlake (theasbc.org/visionary)
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Unlike the numerous reports I saw and heard about network commentators repeatedly "spoiling it" for many viewers of the recent Olympics during those pesky "spoiler alerts," if you are of the opinion that prime contractors generally do business with small subcontractors out of the kindness of their hearts, let this serve as your spoiler alert because I am about to ruin it for you.
 
To preface my comments and show respect for the few organizations out there who have actually turned subcontracting into a strategic program to bolster relationships and market intelligence, and who actually treat their small business subcontractors as partners rather than indentured servants, or worse, not all "other than small businesses" resemble the commentary in this blog.
 
But unfortunately, they are outnumbered by those who do hold the same opinion as "Vanla" from Arlington, VA who commented on the recent Federal Computer Week article DHS considers rule change to protect subcontractors.
 
It goes a little something like this:
 
"The so called "windfall" payments are the only real justification to the Prime to include subcontractors.Do you really think we add subs out of the kindness of our hearts? We do it because you require us to reach out to the small business community. If we lose all incentives to do this, why would we continue to add subs unless they provide a part of the solution that we don't have the ability to provide.The Prime has to get something out of the contract to bring on a sub. There is a cost to administering subcontracts, or had you forgotten that fact? I am sad to see how many skilled acquisition professionals have left the Government for private industry or to retire. The remaining staff just don't understand how Private Industry works. What a shame!"
 
If you couldn't tell, the bold type content is the "spoiler" for which I was preparing you.
During my more than twenty years being associated with government contracting, I have never met anyone from a company required to participate in the Small Business Subcontracting Program that does it because it feels good, helps them sleep at night or is good business. On the whole, the reason they do it is exactly as stated in Vanla's quote.

During my presentation at the USAID Women-Owned Small Business Vendor Outreach Session last Friday in DC, I had an opportunity to share a few thoughts about how small businesses can position themselves for success in government contracting to include working with prime contractors. My primary point was unless you are bringing the equivalent of a cancer cure in the form of a skill, technology, domain knowledge, customer relationship or similar, these companies generally do not need you or any other small business to participate on contracts they are pursuing. One of the unfortunate drawbacks to the socioeconomic programs is the search by many primes for those small businesses that have the right "tickets punched." It's an added bonus if those small companies will say nothing, sit back and look pretty, all for the privilege of being called a subcontractor.
 
So the next time a prime comes to wine and dine you and tell you stories of how great your company is, and how much they "need you" to be on their team for an upcoming opportunity, just be sure you understand the actual need, and what the return will be for your efforts, other than being taken off the street.
 
On a related note, what incentives do federal agencies receive for doing business with small government contractors?
 
Why should prime contractors receive incentive beyond the opportunity to be considered for award by fulfilling one of the requirements of doing business with federal agencies?
 
Peace!

The Chief Visionary

www.theasbc.org/visionary

 

"The person who says it cannot be done should not interrupt the person doing it."

 
Differentiate Yourself. Develop and Leverage Your Small Business C4ISR™.
(Capacity, Commitment, Core Competency, Intelligence, Strategy and Relationships)

Comments...

Michael Sullivan, The Fearthainne Group says...
Posted Wednesday, August 29, 2012
Guy - while in many cases the Prime may not need Subs, to assume that only Prime contractors can appropriately assist the Gov't with "problem definition" and "problem solution" is folly. It is also folly to assume that a department within a Prime can better provide products and services than could a team of small businesses. If the Primes can do so much on their own, why do they buy so many Small Businesses on an annual basis?

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