5 Tips for finding a good subcontractor

Many large corporations and prime contractors know that subcontracting with smaller firms provides huge government contracting opportunities.  It is no secret that the U.S. government is the world’s largest single purchaser of goods and services. According to Usgovernmentspending.com, the federal government is budgeted to spend over $6.3 Trillion on contracts in the fiscal year for 2013 with outside providers of goods and services. Within that figure are not only prime contracts awarded to businesses large and small, but also many subcontracting opportunities for small businesses.  So why do active business firms pursue sub-contractors for bidding opportunities? According to Richard Lewis, CEO/ President of RTL Networks and Chairman of the Colorado Black Chamber of Commerce, “small companies’ offer more flexibility and can provide customization efforts on large projects that are not profitable enough for larger companies to do. In addition, smaller companies often possess unique skill sets and perspectives that larger companies don’ have.”

Many firms use subcontracting as a procurement strategy for success. Subcontracting with the right small business provides competitive avenues for procurement for the prime contractor. In order to achieve this success, it is important to partner with the right contractor. Subcontractors are generally not ready to be the prime on a government project but still offer strong service delivery qualifications. Other subcontractors offer competitive advantages with women, minority or disabled veteran certifications and/or designations. So choosing the right subcontractor is pivotal as they reflect directly on your company’s reputation.  And with all business relationships, you will need to have in place a contract that directly spells out your expectations.

So how do you know who to use as a subcontractor for your bid or project? There are many variables to look for when using a subcontractor. Keep in mind, this is a relationship and timing is also important. It’s better to find your subcontractor before you initiate a bid on a project. Locating your subcontractors early, allows you the adequate time to evaluate skills and qualifications, and in some cases an opportunity to introduce them to the client. Here are 5 Tips for finding a good subcontractor:

  1. Subcontractor Tip #1 – Does the subcontractor have a Capabilities Statement that lists their Past Performances? Experience pays  and you need to have a thorough understanding of what the subcontractor provides for your project. The Capabilities statement will also give more insight to resources the subcontract might have available that benefit your company.
  2. Subcontractor Tip #2 – Look for Small firms in two industries—the information sector (software, data processing) and  professional/scientific/technical services (computer systems design, engineering, research)— as they are most likely to be engaged in the subcontracting process. Half of active small firm contractors have successfully pursued  subcontracting as a procurement strategy: 48% have contributed products   and services as a subcontractor.
  3. Subcontractor Tip #3 – Look for Women, minorities and veteran owned companies. These pools of companies are invaluable resources on  subcontracting opportunities especially on government bids that require  use of disadvantaged business enterprises.
  4. Subcontractor Tip #4 – Don’t be afraid to reach out to your network and ask for referrals. Getting a recommendation from a colleague,  professional organization or local Business Chambers are probably the safest routes to finding a good subcontractor.
  5. Subcontractor Tip #5 – Look at developing a Mentor-Protégé program for your company. The Mentor Protégé Program is a Government outreach program designed to encourage large contractors to develop technical and business capabilities of small disadvantaged businesses to enable them to compete more effectively for work. It should also be noted,  that according to the U.S. Small Business Administration (SBA), a Mentor-Protégé program enhances the capability of 8(a) participants to compete more successfully for federal government contracts.

Using these 5 tips ensures success for finding a good subcontractor for your next project. Subcontractors can provide a huge ROI as they eliminate your need to try to do everything in-house.

Click through to learn more about Prescott Solutions IT and ERP staffing and consulting services. And, if you need a new subcontractor for your next project or bid, check out our public sector and government expertise and why we are a perfect fit for your company.

About the Author

avatar About Portia Prescott

Portia Prescott, CEO/President, is the force behind Prescott Solutions. A Brown University-educated executive and acknowledged leader in specialized staffing, Portia has recruited former C-level executives, change management leaders, federal government consultants, PR experts, engineering resources, Lean Six Sigma professionals, aerospace specialists, and supply chain professionals from major corporations.

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