Large prime contractors are frequently required to partner with small businesses when bidding on or performing contracts for federal, state, or local agencies. This creates thousands of small business subcontracting opportunities every year.
For most small businesses, subcontracting is a great way to begin to grow their government contracting experience. As you gain valuable experience as a sub to large contractors, you avoid the administrative overhead costs and resources necessary to manage execution of large contracts.
Subcontracting to a prime can also be a springboard to future direct contract awards within an industry. How do you get started?
On June 25, Neil McDonnell, president GovCon Chamber invited an expert panel of Small Business Liaison Officers (SBLO) from major large prime contractors to discuss –
The role of Small Business Liaison Officers is to be the initial liaison between project managers and prospective small business partners. They are influencers, not decision-makers. They help to build pre-contract social networks for their companies.
Cruz Andino Vargas of Honeywell Aerospace describes the role as being an advocate for small businesses who introduces small businesses to the broader complex organization. He helps smalls navigate the maze to see if there are opportunities available.
It is a frequent misconception that large companies have large small business offices. However, even the giant Honeywell only has two full time officers in this capacity.
Teanna Jones of Deloitte explained that the SBLO role is actually mandated by the government. Deloitte has a single SBLO with multiple program managers aligned along sector lines. The role is equivalent to OSDBUs and they work closely with their counterparts in federal agencies.
As a one-person office, Melinda Martirosian of Manson Construction is a frequent speaker at national industry events and participates in training for small businesses as a way to help support partners in the field.
What don't SBLOs do?
SBLOs don't actually pick teammates for their company as Shawn Ralston of AECOM explained. Frequently, small businesses falsely believe that SBLOs can hand out contracts at their own discretion. In fact, contracting decisions are made by the technical people, program and project managers.
However, SBLOs have extensive knowledge of their organization, so they can help smalls connect with the people who may need their service or products.
Some smalls think SBLOs can commit their company to actions, but Jennifer Delaney of Dynetics explained that this was another misconception. The main role of SBLOs is to facilitate the process and help smalls get in front of the right people who can discuss specific business opportunities.
The first step on the path to becoming a successful subcontractor is discovering everything you possibly can about your target partner before you pick the phone.
Quality research means trying to understand the footprint of any organization, divisions, priorities and past contracts before approaching prospective prime contractors. Understand your teaming posture.
Teanna Jones stressed the importance of making sure your own company information is completely up-to-date before reaching out to primes. Everything will be verified so don't misrepresent your capabilities and experience. Beyond short-term needs, primes are looking to grow strategically with reliable subcontractors.
Honeywell Aerospace only brings in 1-3 new subcontractors every year. As Cruz Andino Vargas explained, they need to see that any small business has the capacity to grow as a partner.
Melinda Martirosian of Manson Construction stressed research and not making assumptions. For example, Manson is water-based construction and generally not looking for land based contractors. Review company websites in details.
How to Make First Contact
Large primes are always looking for strong partners and welcome inquiries from small business. Email is generally the preferred method because it creates a paper trail and makes it easy to forward information internally. Phone inquiries are also acceptable.
What is an effective email?
Can we just call the SBLO office?
It is important to approach SBLOs with specific information so they understand exactly what you are looking for. This enables them to follow a specific path within their extensive network. It also helps them determine who they might introduce you to directly.
Timing | When Should You Approach a Large Prime?
In the process of researching a prime, you can discover what awards they are pursuing and what have they recently received.
Typically, primes must include subcontracting plans when they are bidding on a contract for their firms. At the front-end, they are often actively looking for potential small businesses.
Deloitte also encourages small businesses to reach out 'pre-RFP'. It takes time to cultivate relationships that evolve into partnerships. It is important to understand that relationships are 70% of the deal, the rest is transactional.
Successful small businesses participate in networking events, utilize the power of LinkedIn to expand their reach and conduct research to discover who's who within any organization.
CAUTION | Jennifer Delaney reminds us that the 3-6 month period after the award might be the most difficult time to reach out because the prime is intensely busy to put their inhouse systems in place.
About Outreach via LinkedIn
LinkedIn is useful but sending personal emails with tailored capability statements are the best first path of communications with large primes.
Certifications are critical so be sure they current and visible in your Small Business marketing profile. These should be featured in your SBA profile, website and other marketing materials.
How do larges find teaming partners?
Generally, primes search their existing network for subcontracting partners before looking for new team members. They meet new companies at outreach and networking events and are always watching for qualified firms that can meet the needs of their clients.
About Past Performance
It is not always required to have government performance history to land subcontracts. However, it is critical to have the bonding capability for the job, relevant experience, and references who will verify your follow-through and performance.
Some Honeywell contracts may range 5-15 years and so it is critical to demonstrate your ability to fulfill the requirements throughout the term of the contract.
Financial competence is urgent and the prime firm needs to minimize risk. They need to be confident their partners won't go bankrupt, so they closely review past company financial strain or stress.
Larges vet financial stability through Dun & Bradstreet so it is important small businesses verify that their information is accurate. Clear up an errors or accidental red flags that might turn off a prospective partner.
As Cruz Andino Vargas explained–
"If we don't get a single nut for an engine that cost $2M, it will delay one of our really big sales."
Other Marketing Tips
All small businesses should have robust and accurate profiles with the SBA. Many companies also have individual repositories to collect comprehensive information about small business credentials, performance histories and can serve to prequalify potential subcontractors. Inhouse account teams have access to this resource.
AECOM has a pre-qualification portal, however, SBLO Shawn Ralston recommends that smalls wait to register until after they have conversations with his office. You really want to see if you might be a good fit for the company before going through the time-consuming in-depth process of registering for approval.
If you connect with the right program manager independent of the AECOM's SBLO office, you can definitely pursue the process directly.
At Deloitte, program managers also utilize the inhouse database and may reach out directly to subcontractors. It is not necessary to have a relationship with the SBLO, although it can certainly be helpful.
Do Primes have Relationship to PTACs
Some companies like Honeywell have very positive relationships with local PTACs during their search for regional quality subcontractors.
About CMMC (Cybersecurity Maturity Model Certification)
Every large prime contractor submitting a contract over $700k must work with a small business subcontractor. However, they are looking for the best small who can meet their clients needs and execute the task.
Deloitte works lock-step with their BD folks and extensive knowledge about the requirements coming out. They are always tracking their status towards their socio-economic goals, but the goals are specific to each contract.
Smalls can simply ask the SBLOs to find out if large primes are missing their goals. While socio-status like HUBZone, Service Disabled Veterans or Women-Owned or Veteran Owned business is not a sole justification for landing a contract, it might be a differentiator.
TIP from Honeywell | Take a moment to see if your firm qualifies for HUBZone certification. The geographic regions have changed in recent years and this is a helpful differentiator.
Shawn Ralston of AECOM says "Follow the Money"
Step by Step Process
The first step is to conduct research through all the traditional public resources, but also through the various social media streams. It is important to vet the large company to see if it is a cultural fit and client match.
In government contracting, it take 12-24 months to do business with a federal agency as a prime contractor.
As a subcontractor, it typically takes 6-12 months to develop a relationship with a prime. On rare occasions, it could happen rapidly if the need is immediate and the pricing and process are aligned.
Timing is additionally influenced by how procurement-ready and prepared a small is when approaching a large prime ie current certifications, references, adequate bonding etc
Capability Statements | SBLOs caution against over inflating core capabilities because these will be fact-checked
What Opportunities are the Prime Contractors Bidding On?
Research the type of work you do and look at the Bidders Lists to find out who is holding those projects, plans and specs. Contact those companies directly. If you know the awarded contracts, SBLOs might be able to get you an introduction.
Go to where the stakeholders gather. Industry days bring together SBLOs and program officers, as well as representatives from small and large companies.
Networking through industry groups helps you learn who is in the market and who is winning contracts.
It is about finding the right person who understands the value of what your firm offers. Sometimes, the technical people are more helpful introducing you to companies who might need your surfaces, perhaps as a third-tier sub etc.
About Sharing Competitive Information
It is important to provide large primes as much information about what your firm brings to the table that will differentiate you from your competition. Simply present this at a high level, rather than sharing any proprietary information.
When reaching out to SBLOs, it is important to keep your communication at a high-level but be ready to present your SME status to the technical people.
Should you try to offer your services if the prime has not said they are looking?
This can be a challenge especially pertaining to cutting edge innovation and development tools. The best strategy is to introduce the idea directly to the SBLOs and see if you can get traction. Timing may also be a factor.
If you feel you are ready to work with today's featured larges, follow their suggestions to start your connection. Here are the links to the vendor portals of our guests.