Elevating Small Businesses through Federal Contracting Partnerships

Get ready to take your small business to new heights in the federal contracting space with our latest episode of the Country Intelligence Report! Join hosts Spencer Bentley, Tyrell Cummings, and Devin Florczak as they uncover the untapped power of strategic partnerships. Discover the secrets to forming these collaborations, from learning the ropes of responding to RFPs to leveraging small business set-asides. You'll also gain insights into building a robust past performance record and networking with potential team partners. Don't miss out on this game-changing opportunity to amplify your capabilities and land more significant contracts!

But that's not all - we dive even deeper into the world of federal contracting with a discussion on subcontracting work and mentor-protégé relationships. Learn about the Small Business Administration's mentor-protégé program and how different contracting vehicles like IDIQs can shape these partnerships. We'll explore the pros and cons of subcontracting and highlight the importance of transparency and directness when forming alliances. Time is of the essence, so tune in now to equip yourself with invaluable knowledge that could propel your small business to new heights in the federal contracting realm.

• Hosted by: Terrell Cummings & Devon Florczak
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Transcript

Speaker 1: 0:17

Hello and welcome back to the Country Intelligence Report.

Speaker 1: 0:21

We are your hosts, spencer Bentley, tyrell Cummings and Devin Florczak. Today we have an interesting topic that we at Country Intel are actually in the midst of exploring ourselves, and that is the power of partnerships in contracting. Partnerships can be a very valuable and highly effective tool for small businesses looking to enter into the federal contracting space, and it can be quite a complex process that really involves a lot of different aspects of entrepreneurship, technical literacy regarding the ins and outs of partnerships and what they mean legally, and just a lot of sort of opaque, little avenues that you have to explore and really have to learn by doing so. This is going to be a really interesting topic for us to discuss here, and we'll go ahead and dive right into it. I'll pose this to the group here what is the potential for partnerships as a strategic tool for small businesses in the federal contracting space and, moreover, how can those collaborations amplify the capabilities of those with small business set-asides and enable them to take on more significant contracts while diversifying their offerings?

Speaker 2: 1:47

I'm going to take things off as far as you know, partnerships for small businesses and collaborating kind of like those larger businesses for federal government contracts. You know, I think it is kind of essential for those small businesses, just because they may not necessarily know the process that goes into it. You know, as far as responding to an RFP or to a source is sought. So it's one way for them to kind of learn that whole process initially. Another thing is they can, you know, if they do have a small business set aside veteran, owned set aside, a&a or hub zone, any of those other designations they may be attractive to those larger companies that don't have those set aside, so that they won't necessarily have to go into a full open competition. So that's another way that they can increase their odds of pointing to bid, utilizing their experience with your set aside status in order to do that.

Speaker 2: 2:39

And then another thing is if you want to try to come in as a subcontractor, as a small business with a larger business, and kind of just come in, tag along, get some of the work, learn the ropes, you know, get good, whatever you're doing under that subcontractor what not you can gain that past performance. You can ultimately build past performance to go in. If you want to be a prime on your own, you can do that and you gain that experience as well. Or you also become more attractive to other potential future team partners because you have that capability on an actual live contract and you know if you score well, that you do well with the client. You know you'll be more attracted to others in the future as well.

Speaker 3: 3:21

Yeah, I agree and I guess something. Well, I feel like I've thought about before. But as far as we were talking about competition and you know things that are out for bid, you know, especially if it's a sole source, where maybe it's only for small businesses, if you do, you know, end up teaming up with another small business for that opportunity, try, I think something along the lines you says that that's sort of sort of shrinks the competition pool and you can, you know, sort of pool your odds together of you know at least getting a chunk of the work and obviously not all of it. If you're partnering with someone and you know that's always a good thing and you know the obvious thing too is that you know if your company has something that you know they're lacking and you can find a willing and able partner to sort of fill that gap. You know that's great and you know that, as you said, trial as well. You know that opens up the you know, life of work you know in the future and you know also just helps you network your company in general.

Speaker 3: 4:25

One that I thought was you know has been interesting in these last couple of weeks that we've been talking a few different you know companies here and there was, or at least something that I learned is that it's important to be direct.

Speaker 3: 4:37

You know, when you're talking to, you know, potential companies that you're looking to partner with.

Speaker 3: 4:41

You know, for me, I feel like sometimes you know, I don't know, not like I want to hurt anyone's feelings, but you know I feel like sometimes I, you know, sort of gild away from that.

Speaker 3: 4:55

And you know, as we were on this other call the other day, you know that this company said that they had a certain capability, but it was with a certain type of you know, capability that they had that we weren't specifically looking for and I thought it was good that. You know, not myself, but you know others on the call you know, straight up said like, hey, you know we actually specifically need this and you guys don't have this, but they sort of offered up that I'll branch out. But you know, in the future if we can use that capability, we want to reach back out to you guys. So I think it's important to be, you know, upfront and direct in situations like that, and I feel like I'm not the best in that situation, but you know, at least that's something I learned is that you have to be direct with people when you're trying to make these partnerships and be, you know, clear on what you're looking for.

Speaker 1: 5:45

I completely agree. You know, when it comes to partnering, time is money. That's in business in general, but especially for whatever situation may necessitate a partnering opportunity, is usually time sensitive. It's usually something that requires quite a bit of buy-in from the high levels of management in the organizations. And, like you said, devon, the best way to be respectful of potential partners is to be very straightforward with your asks and remove all ambiguity in terms of what the expectations are. Because if, entering into a partnership, you're not crystal clear on exactly what people are bringing to the table and what they expect to get out of it, then you're going to pretty much set yourself up for some complications down the road. So that's big. And also I wanted to point out that the benefit of partnering isn't only on the small business.

Speaker 1: 6:51

The small business does get a lot of benefits, but in the federal space there's something called a small business set aside where certain contracts have a requirement. Certain organizations have a requirement to include or potentially only seek out small businesses for potential contracts and many larger organizations. There is a very defined threshold and if you're beyond that threshold you simply don't qualify. So a lot of small businesses can really benefit from understanding that mechanism, understanding and seeking out that small business set aside designation when they're thinking about bidding for contracts, and understanding that they have leverage in the partnership. It's not solely to the benefit of the large business. Oftentimes those small business set asides are the make or break, determination on who or what a group of companies are going to ultimately be awarded the contract. So definitely a very powerful tool for both parties involved and something that small businesses should really get well versed on if they're looking to enter into the space or if they're looking to expand within the federal contracting space as well.

Speaker 2: 8:23

I would also say for small businesses something to think about when you are partnering with these larger companies or larger firms. They may be able to staff contracts. If you do win more quickly and don't know what kind of experience small businesses have as far as going through that process, as far as trying to determine how many FTEs you have, if you have seven or eight FTEs, what should turn around time again, those FTEs? Have you already recruited those FTEs? What breast-invades? Hopefully you have, and so that's already been taken care of.

Speaker 2: 8:56

But let me hit the turn quick. You know it should come in with how to do that. Can you do that? Can you get those individuals as needed? Can you float the salaries of those individuals until you start getting paid on the contract? Just those types of things may come into play. Potentially that swamp businesses may not think about initially when partnering. So or if they were to prime a contract and they won, that's just something to think about. There's 15 FTEs on it. Can you float those positions, potentially prior to getting paid, or whatever it may be? So it's just more of those things to think about.

Speaker 1: 9:35

And FTEs is full-time employees.

Speaker 1: 9:37

For those not versed in the jargon but yes, sorry about that, no, no, I just wanted to be clear for the audience here.

Speaker 1: 9:45

But no, that's a great point.

Speaker 1: 9:46

A lot of those logistical issues are just not really in the purview, I think, of a lot of small businesses, especially when they're looking to level up and assuming that the impetus for partnership is taking on a larger contract than they're either qualified on their own to obtain or have the personnel and ability to execute. Yeah, definitely have to take into account that with larger contracts comes more complicated logistics, both on the recruiting and payroll and a whole host of other issues that you have to take into account. So that that's a great great point to roll and kind of just stepping back, we should discuss the types of partnerships that exist, the types of structures. There are things called joint ventures, there's subcontracting, a mentor-protege relationship, which I just became pretty familiar with, and I like for us to just discuss the benefits and the challenges of these types of structures, especially as it pertains to small businesses looking to navigate the complexities of this whole landscape. So, just starting at the top here, what are some sort of partnership structures that small businesses should become aware of?

Speaker 3: 11:11

Yeah, to start with joint ventures, I think these are good, at least in the federal space, for two companies that have equal amounts of experience and equal amounts of things that they can bring to the table and sort of as far as when it comes to actually looking at a contract, I think it more so has to deal with. Are these more so come up when companies are looking at a specific contract and they're familiar with a company or two that might be able to provide something that they can't, but they know that everyone's pretty equal in footing, at least as far as it goes on the federal contract side. And then sort of in contrast, the subcontracting even as a small business we've subcontracted before it doesn't just have to be a big contracting vendor and looking at subcontract a small business. Small can subcontract a small, and so on and so forth, and I think these are more so better when, for example, for us, if we can cover 89% of the work and we just need that last 10% for someone, that could be great. Another time this could come into play is if, since we have experience in the federal contracting space and say we know some companies that are able to provide some capabilities that we don't have, but they don't have experience in the federal contracting space. That can also be a great vehicle to sort of use, and the way that we sort of portray that is we typically see companies out that have certain capabilities and we let them know that, hey, if you partner with us and you subcontract with us, you'll be able to show that you have some federal contracting experience going forward. So I think that's a great way to get your foot in the door if you're looking to get some federal contracting experience.

Speaker 3: 13:14

And then the mentor-approach relationships, I think to me I'm not too familiar with this. The only thing that I am sort of familiar with this is my knowledge regarding the larger contracting vendors that provide the opportunity to become a supplier for small businesses, and most of the larger contracting vendors Booz Allen, lockheed, northrop they all have these supplier websites that you can go ahead and essentially let them know who your company is, what capabilities do you have, and you essentially get added to their list of small businesses or companies with certain set of sites that they can use down the road for certain work. And the obvious drawback to that is the government doesn't really know when these large companies are supplementing some of their work with some of these suppliers. That's really the only downside to that.

Speaker 3: 14:15

Some companies do that to sort of get their foot in the door as well with the federal contracting space. But the government folks that you're working with might not even know that you're a separate entity from the large vendor that you're working with. So each of these really have their upsides and downsides. But especially for folks that have companies that do certain things that are trying to get their foot in the door, I think the best way to go is to be subcontracted so your company's name at least gets put on the agreement and you sort of get your name out there that way.

Speaker 1: 14:53

Yeah, I think that's a good way to be very clear-minded when it comes to the benefits of these types of partnerships, and I think that small businesses have to understand that it's really incumbent upon you to be your own cheerleader in the space, especially when you're partnering with larger, say, defense contractors like you mentioned, like Deloitte, bouzel and these larger sort of conglomerate size entities. They have made their name by being their own sort of brand champions, so when they're subcontracting outwork it's not to their benefit to really inform the clients that they're being supplemented by these small businesses. It really is incumbent upon the small business to ensure that they're getting the visibility and the brand recognition that they deserve for their efforts. But that is not to say that it is not a great opportunity. Subcontracting work is a great rate for small businesses, like you said, to enter into the space, to diversify their portfolio within the federal contracting space. If you have a very niche set of skills as a business that can be broadly applicable, subcontracting outwork is a great way to just sort of dip your toes in the waters of many different organizations and departments within the government. So it's a powerful tool.

Speaker 1: 16:35

Starting the mentor protege program from what I understand it's more or less a form of subcontracting that is more akin to like an internship, but on a company-wide basis, where a larger organization sort of brings you into the fold of their operations and, however they're sort of positioning themselves with different contracts, they are ensuring that the client understands that they have the capability of tapping into your organization as well.

Speaker 1: 17:09

So it's just a way of sort of aligning yourself on a official and non-official basis with an organization. And this is, I think it's more advantageous for small businesses, like I said, that have a really defined niche and skill set to enter into these mentor-protege relationships so that there's not a lot of overlap and you can sort of ensure that you're growing in a way that's equitable for both parties involved. So again, can be a very powerful tool for small businesses looking to enter into spaces that are especially spaces that are either highly regulated or sort of certain companies have a monopoly on them. The mentor-protege relationship can be pretty powerful. So definitely something worth considering for all the small businesses out there.

Speaker 2: 18:09

And one of the things as far as mentor-protege relationship for all small businesses out there, there is a mentor-protege program put out by the SBA, the Small Business Administration. So, yes, there can be mentor-protege relationships outside of that, where you have to have your own separate agreements on your own is how you would go about that, but there is an actual program put together by the Small Business Administration where you have to. You just have to find your mentor. But there are certain parameters that the mentor has to fall into and the protege has to fall into as well on how they, before they're even able to go ahead and operate new business.

Speaker 2: 18:43

So like, for instance, the mentor, they have to be a certain size company that has to have certain status as far as good character and everything, to be able to actually provide assistance as a mentor to the protege, not be deep, barred or suspended, and they have to be able to be willing to impart wisdom to the protege from their experience in contracting. So it's really a way for the small business to gain that experience. See someone who's done it previously, has won multiple contracts, has staffed multiple contracts and everything like that, so they can actually see the process and the mentor can guide them through that program, and it's something that is already set in place, and the Small Business Administration wants to make sure that it's not like a pass-through program either, so that, like we were talking about before, the larger businesses can't just come in and utilize these small businesses and then just use it for their name and that's it. So the small businesses give something out of it as well.

Speaker 1: 19:44

Definitely yeah. So yeah again, small business is very, very important that you equip yourself with knowledge. When entering into any partnership, you want to make sure that it's equitable and, on that note, you know, I think it's important that we discuss how different contracting vehicles factor into the dynamic of building a partnership. You know there's things like IDIQs and other specialized contracting vehicles that can really serve as a platform for small businesses to form these partnerships, and I just want us to sort of briefly touch on you know what the significance of those contracting vehicles you know can be on a partnership and the technical aspects of you know how they impact how the partnership will form and the dynamics that will exist within that partnership.

Speaker 3: 20:43

Yeah, yeah, I think you're good to touch on IDIQs again, especially because we just talked about them, I think, in the previous two episodes. And IDIQs stands for indefinite delivery, indefinite quantity, and it's a type of contracting vehicle where, essentially, you know an organization, you know a federal organization, is going to say, you know, hey, you know we're going to use this vehicle for you know five, 10, 15 different, 20, you know areas that that company's going to apply for that, and but they're going to say, you know they're not sure of the specific work that's going to go through it. I'm sure they have, you know, some sort of idea, but essentially what they're doing is they're just trying to put, you know, a broad contract vehicle out there to apply for, where companies can go ahead and apply. They can, you know, take a look and see what areas they fit under and essentially, you know they'll, you know, write a proposal as normal and how they can, you know, fit in certain areas you know on the IDIQ vehicle. And then, of course, if you get accepted, you know you're on the vehicle and you know any work that you know that organization does and tries to put through that vehicle, you know you'll be able to apply for it. And you know, as we mentioned before, the good thing is that you know if you're on one of these vehicles, you know your competition pool is a lot smaller. You know versus, you know the work being just full and open to bid on.

Speaker 3: 22:09

Obviously there's some downside with that, whether or not you know the other companies you know might have a start in case to go on that work and you know you sort of get your companies ever get shut out from that work. But as far as if we're just looking from a partnership standpoint, you know the good thing about these vehicles is that you know exactly who else is on this contract vehicle at the same time as you, um, and you know you can sort of do your research on. You know what sort of areas or task areas you know companies are going to apply for if certain work falls under it. And if you happen to know you know some companies that you are going to apply for it, you can always reach out to them and say you know, hey, like I'm, we're assuming you're going to apply for this.

Speaker 3: 22:51

You know it'd be great if we can partner because you know we could do X and Y and you guys can do Z and that way we can both straight from in our case, you know versus going against. You know, maybe a big that's on a contract like Booz Allen. So I think you know, in cases like that, you know, if you got these IDIQs like you know we've said before you know that's great. And if, even better, if you can sort of network your way into knowing some other small businesses that are also on the IDIQ to sort of partner up with and team up with, you know, take down some of the work.

Speaker 1: 23:28

Yeah, definitely, the IDIQs can really be a blessing for small businesses if executed correctly. And again, you know understanding the technical aspects of these contracting agreements is paramount for all small businesses looking to enter into a partnership. Just understand that. You know there is a large responsibility on your part to equip yourself with knowledge and understand from a business perspective what the expectations are and be realistic about your ability to deliver. You know being able to align yourself with a larger organization is great, but it also comes with potentially a whole host of complications that you have not previously been introduced to. So just equip yourself with knowledge. Understand that it will require you to branch out of your comfort zone, but that's what's required for growth at all times. So we'll wrap it there. Thank you for listening to the country intelligence report and we will speak to you next time.