FedBiz’5 Podcast | Episode 19: Subcontracting and JV Teaming: A Good Place to Start
Subcontracting and JV Teaming: A Good Place to Start
Very often the quickest way to break into the government contracting market and gain some history with the federal government is as a subcontractor or in a joint venture (“JV”) teaming arrangement with a more experienced contractor.
In this episode of FedBiz’5 we are hosting Anthony D’Attore from FedBiz Access to discuss subcontracting and joint venture teaming as a good place to start in government, especially to build a record of successful performance.
In a subcontracting arrangement, the prime contractor is the party who gets awarded the contract and may utilize subcontractors to help fulfill the contract requirements. Often the prime contractor includes the subcontracting parties in the response to the solicitation, especially when certain set-aside categories must be included in the contract.
The subcontractor has a responsibility directly to the prime contractor, and the prime contractor has the direct responsibility to the federal government agency that they are working for.
For most small businesses, subcontracting is a great way to begin to grow their government contracting experience and build past performance. The subcontractor also gains valuable experience while avoiding the administrative overhead costs and resources necessary to manage the execution of large contracts.
In a JV teaming arrangement, two companies come together to present a stronger front for one solicitation. The parties typically form a JV company, and both are responsible to the government agency for the contract fulfillment. The parties bid on the solicitation as one entity. Therefore, the parties need to agree ahead of time on how to manage the dispersion of work, and who’s responsible for what.
Under a JV teaming arrangement, the parties pre-negotiate their terms of working together and jointly prepare the solicitation proposal.
Under a subcontracting arrangement, the prime typically dictates the statement of work, pricing, terms, etc. to the subcontractor. Therefore, it is important for the subcontractor to negotiate the subcontracting terms prior to the contract award while it may have better leverage on the prime contractor. This is because subcontractor’s skills or set-aside can help the prime contractor win the award.
The best way for a small business to get into subcontracting is to identify from historical and expiring contracts the commercial companies that have won contract awards in their industry. They need to do their homework in a market research system like the Market Intel Database to find out who’s been doing the work, what part of their larger contract can they help them with, and what are new opportunities on the horizon.
Subcontracting and JV teaming opportunities are primarily prevalent in construction, facilities management, staffing, and IT contracts. Although any contract proposal can be submitted under these arrangements.
In addition, larger contractors that bid on large scale proposals that exceeds a certain dollar amount must include a subcontracting plan that includes certified vendors across the set-aside categories.
By leveraging relationships in subcontracting and JV teaming, a business can accelerate their path in government contracting by gaining contract experience and building a record of performance.
FedBiz Access offers research and engagement strategy sessions, as well as marketing packages to prime contractors and targeted buyers at the federal, state, and local levels. FedBiz Access has over 21 years of experience working with companies to help them win business by ensuring their research, engagement strategy, registrations, certifications, and GSA Schedules are current, complete, and compliant.
