ENERGY • ENVIRONMENT • NATIONAL SECURITY • HEALTH • CRITICAL INFRASTRUCTURE

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Babak Nouri, Vice President, Business DevelopmentApril 19, 2012

Subcontracting: Doing Business with Prime Contractors

2012 OSDBU Procurement Conference

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The Current Environment

• The Challenge - Government customers have challenges that affect the business environment

– Budget challenges resulting in reduced discretionary dollars are forcing hard choices– Limited resources affect the acquisition cycle:

• Opportunities taking longer to be awarded• Increased use of indefinite delivery/indefinite quantity vehicles (including GSA schedules)

– The cost of doing business as a prime has increased significantly

• The Opportunity – from a small business perspective teaming allows a chance to:

– Increase revenue at reduced opportunity cost– Diversify current revenue/customer base– Build past performance

• The Reality– Crowded space with many, many voices– Large businesses realize the value small businesses can bring– Primes are more selective in terms of subcontractor selection for a variety or reasons

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Ways to Engage a Large Business (Big Picture)

• Too little, too late– Inquiry regarding teaming opportunities following press release of contract award– Identifying open job positions on large business website

• Passive (“just enough”)– Registering on CCR and SBA websites– Registering on large business small business website– Generic email to company small business office

• Active– Marketing federal agency customers to:

• Identify upcoming opportunities • Learn and become familiar with the contractor landscape at customer location

– Identify opportunities through forecasts and other market research tools to develop a pipeline

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Ways to Actively Engage a Large Business

• Meeting prime contractor personnel – Presenting capability briefing – Discussing opportunities

• Teaming/Subcontracting– Your firm has knowledge of the opportunity– Firm has demonstrated past performance and customer knowledge– Relationship formalized well in advance of the opportunity being

competed through teaming agreement

• Use of a prime’s existing contract vehicle to facilitate business– Business has marketed opportunity and customer is receptive with

caveats– Customer is constrained/prefers to use certain IDIQ/GWAC vehicles– Critical step is to match opportunity to:

• Contract scope• Terms and conditions unique to contract

Time and Effort

Required

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Teaming Decisions – A Deeper Dive

• Scenario 1: Follow-on contract– We have an incumbent subcontractor team – Small possibility for team adds to cover a niche requirement or small business

socioeconomic category– Priorities:

• Candidates known to the customer;• Relevant experience in the niche area; • Relevant experience on a ‘like’ contract

• Scenario 2: New opportunity (SAIC is not a current prime)– Same priorities as above but more opportunity for new subcontractors– Strong preference given for “incumbent” subcontractors

• Scenario 3: MAC IDIQ (or GWAC-type contracts)– Larger number of subcontractors– Less stringent on selection priorities– Opportunities will be at the task order level – be proactive and responsive

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Most teaming decisions are based directly tied to an SOW/PWS well before the RFP is released

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Things to be mindful of and strategies to consider

• Teaming Discussions– Make sure an NDA (non-disclosure agreement) is in place before meaningful negotiations– Secure a signed teaming agreement to ensure being on the team– Assign points-of-contact to effort and know prime POCs including:

• Capture manager (and possibly proposal manager)• Procurement/Subcontracts• Program manager

• “Blocking & Tackling” – Proposal phase– Be responsive to all data calls during proposal phase and any down-select/BAFO efforts– Share any market intelligence you come across– Continue to place an emphasis on stellar performance and employee retention

• Post award– Secure a signed subcontract– Get to know the Program Manager – For IDIQ contracts:

• Plan to actively market• Understand how task orders will be shared/disseminated

• Avenues to differentiate yourself from other subcontractors– Consider investing in technical certifications for the organization or employees– Know the customer and target your teaming activities– Develop a competitive cost structure – cost has at times been the only factor

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