More than a handshake
Monday, December 10, 2007
More than a handshake
Formal partnerships open small doors to large firms, lend power to smaller ones
BY Michael Hardy
Published on May 9, 2005
companies and large businesses have always worked together to win and
fulfill government contracts. That relationship has become more
structured lately, as companies move past handshake deals and opt for
formal partnerships, with large businesses often putting small
companies through a selection process to ensure that only the most
promising firms get chosen.
The trend reflects the reality
that small businesses and large companies need one another to succeed
in contracting. Small firms bring skills that are often deep but not
wide. They sometimes occupy a niche and, in some cases, are masters of
that niche. They offer access to small-business set-aside contracts, a
practice that some large firms are making part of their business
Large companies bring their muscle, deep pockets,
brand-name recognition and substantial personnel teams. Many
small-business officials see partnerships with larger firms as the key
to their success.
Several companies have taken steps in the
past month to strengthen such partnerships programs. CDW Government
received proposals from small businesses hoping to become partners as
the reseller's Small Business Partner Consortium enters its third year.
Dell officials created a formal partnership program to structure the
kinds of relationships they have been conducting informally for some
And the American Small Business Coalition, a
Maryland-based membership organization, created its own partnership
program and signed reseller GTSI as a partner.
No learners permitted
CDW-G consortium, which officials formed in 2003, has 17 members, but
company officials are now evaluating proposals from prospective new
members. Companies in the consortium get a one-year contract with two
Each year, some members drop out and new ones join, said Kevin Adams, vice president of program management at CDW-G.
consortium members don't work out, or sometimes they decide that after
a year, they don't want to participate," he said. "So we're always
looking for new blood."
The program is not a mentor/protégé
arrangement, Adams said. It is designed for active small businesses
that have been around for at least three years and have some government
The program started with 12 companies and,
through two years of turnover, has grown to 17. After the new members
are selected by the end of May, membership could reach 20, but Adams
said he has not set a target.
CDW-G officials have not
determined how many of the 17 will stay on another year. They evaluate
partners based on various factors, including how well they work with
the reseller's salespeople, how responsive they are to needs as they
arise and how much the small business benefits from the relationship.
requires prospective partners to respond to CDW-G's request for
proposals partly to evaluate how well they handle such solicitations.
a final group to offer partnerships is not always easy, he said. Once
they join, small firms generally begin making use of the relationship
"It's separating the wheat from the chaff —
bringing them in, giving them some best practices, having the existing
companies talk to the new companies," Adams said. "It usually starts
slow for the new companies in the first three months. But because it's
busy season when we start, usually they'll get some business."
Collins, president and chief executive officer of Collins Consulting in
Schaumburg, Ill., is a partner whose company needs no hand-holding.
When CDW-G officials offered him a spot in the program, he jumped at
His firm resells computer hardware, as CDW-G
does. But because Collins Consulting is a small business, he has access
to contracts that CDW-G would be barred from bidding on directly.
of the challenges that small businesses always have is finding access
to equipment to sell at a reasonable price," he said. Joining the
consortium gave him that access, he said, and made him a partner of a
firm he could never compete against head-to-head.
businesses in the prime [contractor] space, in general, are not warm to
small business," he said. "Any small business that's been involved in
this consortium, that uses it, will find it to be valuable."
relationship has helped Collins' company grow from 70 people two years
ago to 180 now, he said. Without disclosing his revenue, he said his
company's hardware sales grew 400 percent in 2004. He believes he can
hit his 500 percent target this year.
CDW-G doesn't generate
the business, Collins said. Instead, the relationship allows him to
develop his own business, drawing on the larger firm as a resource.
year we were awarded our first two federal contracts on our own," he
said, adding that the consortium is a model other firms should follow.
From the other end of the telescope
companies aren't the only ones that can invite partners in. The
American Small Business Coalition, a for-profit membership organization
supporting small firms, recently made GTSI its newest partner under a
newly formalized program. The coalition already had other partners,
including CNA and Perot Systems, before creating a structured program.
Timberlake, co-founder and chief visionary officer, said the coalition
began as a consulting firm in 2003 and became a membership organization
in April 2004. It has 92 small-business members in 14 states.
"When we started, we had not considered what our relationship would be with larger companies," he said.
the new program, the coalition gives such partners access to
information about and relationships with small firms, Timberlake said.
we do what we do well, we're going to save companies money, small and
large, in helping them to utilize networking," he said. Government
agencies offer programs that go some distance toward that same goal,
but their government nature makes them subject to conflict-of-interest
rules that don't affect private groups such as the coalition, he said.
the partnership programs are popular, not all small companies want to
participate. Valerie Perlowitz, president of Reliable Integration
Services, said she has avoided such programs for several reasons.
primary reason is that she believes the selection process that CDW-G,
Dell and others use is invasive and undermines trust between partners.
pretty nosy," Perlowitz said. "They're looking for financial
information, tax returns. It's none of their business. It's pretty
intrusive, the kinds of information that they're asking for."