A Guide to Government Subcontracting

The reality, however, is usually much different. Simply put, federal business is like any other market. You can't just hang out your shingle on Monday and expect to get business on Wednesday. Companies must put in the time and energy to get to know the market and learn which larger participants are winning contracts, then channel that information into a comprehensive business strategy that makes sense. As with any investment, dedicating the resources required for success can yield positive dividends.

Many smaller businesses believe that this isn't a "go-it-alone" process. There are professionals in and out of government that can help your firm decide whether federal business is right for your firm and, if so, how best to pursue opportunities. Some of this information is free from such sources as federal agency small-business advocates. Many also offer Procurement Technical Assistance Centers (PTACs) that provide free advice to small businesses seeking federal market entry. Professional consultants are also available.

No matter what approach you take, though, the bottom line is to do your homework before you jump into the deep end of the pool. Federal business is good business for those that take the time to learn. Understand the government as a customer, because just as the federal market offers opportunities, it also mandates responsibilities for those firms with which it does business.

Getting Started With Subcontracting

No doubt, one of the best ways to learn the federal market or get a foot in the door with a particular agency is to win an opportunity as a subcontractor. I call subcontracting an "earn as you learn" scenario. Working with those who are experienced in this market is a great way to figure out what your market niche may be. I know of countless companies that are ill-suited, at least in their current form, to act as primes because of their lack of resources and experience. But these same companies often make excellent subcontractors given their specialized skills and tenacity. The trick is "stick-to-it-iveness." Unglamorous as that may sound, sticking with something through thick and thin is often a tried and true path to initial success and long-term growth.

Often, getting started is the biggest challenge. While there's no turnkey strategy, there are some common, noteworthy traits that drive success in subcontracting.

Aside from the usual recommendations, such as signing up on the SBA Sub-net and Pro-net systems and visiting agency mentor-protg Web sites, some other steps can make a significant difference for winning subcontracting opportunities.

First, you have to be where the action is. There are many fine groups across the country that hold regular events for federal contractors of all stripes. Companies should pick the organization with a focus closest to their market niche and become a regular participant. Often, these groups invite government speakers to their meetings, offering attendees two key things: one, a chance to network with potential business partners, and two, an opportunity to hear what's on the minds of would-be government customers.

Making one's presence known is a great way to make contacts that can lead to government business. Bear in mind that your next business opportunity could be with the company next to you.

In addition to regular association or industry meetings, many of these groups hold matchmaking events whereby large companies looking for subcontractors and subs looking for opportunities gather in a sort of "speed-dating" for contractors. Even federal agencies such as the Small Business Administration and the General Services Administration (GSA) have such events.

What Makes You Attractive to a Prime?

Before you attend such an event, though, you must know what primes are looking for from subcontractors. Although many of the attributes in demand depend on the needs of a particular procurement, there are two questions every potential subcontractor should be able to answer. First, what federal business are you tracking and working that you can bring to the table? Second, what special skills or statuses does your company have that differentiates it from another potential sub?

Tracking potential federal business can be a difficult task for new would-be subcontractors. It means that your firm must've already developed relationships with at least one federal office. Contrast that statement, though, with the one made at the beginning of this article: Don't pull a shotgun approach. Too often, companies try to establish relationships everywhere all at once. But not even a very large company can be everywhere at once. Chances are, some specific potential opportunity drew you to the federal market in the first place. Becoming the resident expert on that opportunity is enough to get you started and make you attractive to a potential prime. Special skillsets are another key. To succeed here, however, you need to make sure that your skills or products are truly unique in the marketplace. Be prepared to answer questions from skeptical prime contractors about what really sets your firm apart, and anticipate that they'll have a ready-made group of subs they already do business with on a regular basis.

So think about this: What about your firm makes it essential for that prime to look beyond those established relationships? Only after these two essentials are established should you place any importance on having a special socioeconomic status.

While being a small firm, small minority firm, veteran-owned or any one of a number of other specially recognized set-aside certifications is helpful, too often firms will meet a prime and say, "You should do business with me because government says you have to." True enough, but there are likely several companies with the same socioeconomic distinction that have something else valuable to offer. Core capabilities have to be the priority, because gone are the days when merely having a small-business set-aside certification could reliably bring enough "pass through" business to sustain a company.

Finding Federal Business Opportunities

One way to get a pulse on federal market opportunities is to subscribe to publications that cover the federal market. These publications, many of which are available free online, tell you not only what, but also who and when.

Take FedBizOpps.gov, for example. Some dismiss the idea of monitoring the daily listing of federal opportunities because they assume that many are "wired"—that is, as good as won by another contractor that managed to get in before the request for proposal even went up for bid. That may be true, but the smart subcontractor will look at the contact information for the government contracting officer (CO) that's listed. Even if you suspect you have no chance at a current listing, call that CO anyway. Chances are that person may be buying some of what you're selling eventually, so establishing a relationship could play a key role in winning future business.

Relationship-building, in fact, is the key to success in the federal marketplace, as it is for just about any other area of business you want to pursue. For subcontractors, this means establishing relationships with prospective prime contractors, government contracting officers and end users, as well as agency small-business advocates. All of these groups can provide various levels of assistance and opportunities.

An Important Word on Compliance

Keep in mind that, while subcontracting is a great way to establish relationships, it also imposes requirements on your firm. A company's direct interface may be with the prime contractor, but the government also requires that you abide by many of the same contract rules and regulations. So take the time to know and understand what these are before you get caught up with new business.

Government business is good business for those that invest the necessary time and resources, and subcontracting is a great way to learn this market, both through your own experience and by working with an experienced prime contractor.

Larry Allen is executive vice president of the Coalition for Government Procurement.