Three Considerations for Subs
As a prime, the Teaming Agreement management strategy is almost always to get subs to sign an exclusive TA. They do not want the differentiator that the sub may provide to be available to a competitor. Generally speaking, it’s the opposite for a company that is the sub. Why would a company want to limit its Teaming Agreement management approach to just a single team when they could be on several? The more teams they are on, the greater the odds that they will be on a team awarded the contract. However, non-exclusivity can have a price tag. Here are some things worth considering in Teaming Agreement management as a sub:
- The value in accepting exclusivity
- The competitive landscape
- The ability to demand a non-exclusive TA
Often, the value of a teaming arrangement is considered to be the workshare that is stated in Exhibit A section of the TA. This can be misleading for several reasons:
- It is important to understand the prime’s ability to successfully win the contract. Everyone understands that 40% of zero is nothing. Too often the pipeline discussion between the BD Manager and the COO revolves around who will offer the largest workshare. While an important factor, a sub should consider the Probability of Win (PWin) that the team will have. If there are several offers on the table, create a weighted value based on the team’s PWin and the potential revenue value of the offered workshare.
- If it’s a Multiple Award, Indefinite Delivery/Indefinite Quantity (MAC IDIQ) opportunity, consider how well positioned the team will be to win Task Orders (TOs).
- If it’s a recompete, and the prime is trying to get on the MAC for the first time, then their success factor is unknown – the team may blow the competition out of the water or go award-less, so be wary. Review their experience on similar contracts, and with the Program Office, to determine whether they have the know-how and the relationships to win.
- If they are an incumbent on the MAC, look at how well they have done in winning TOs.
Capture2Proposal’s (C2P) Analytics allows users to look at the TO awards on the MAC so that they can see how the prime’s team has performed on the incumbent contract. Even more enlightening, is that a potential sub can actually see the spending for each subcontractor that was on the prime’s incumbent team. This Teaming Agreement management approach will give a potential sub some idea of how the prime distributes the work and whether it’s worthwhile to accept an exclusive TA.
Navigating Teaming Agreement Management
A sub needs to understand the competitive landscape of the team itself. Competitive landscape is often viewed as being between the primes during the bidding process. If a sub is joining a team to go after a MAC, it is important to know if they will have to compete against other subs to win work. When it comes to workshare on a MAC, no one can guarantee a workshare percentage; it is all about how many TOs the team can win. What can be included in Exhibit A is a sub’s first right of refusal for any work of a specific type or agreement that the sub will get all work of a certain nature. A sub should be wary of getting on a team that has other subs that do the same type of work as they do. It is not unusual for the prime to require subs to compete against each other so that their bids are lower.
Finally, a sub‘s Teaming Agreement management should include an awareness of what it can and cannot ask for when it comes to being non-exclusive. If an incumbent on a single award contract offers a potential sub an exclusive TA to join the team for the recompete, that prime likely has the best PWin. While incumbents sometimes get unseated, the odds are generally in their favor. There are instances where the CEO or COO of a potential sub may have mandated that unless they are given significant workshare, they will only sign non-exclusive. Mandates like this, from the top, carry the risk that each negotiation has that limitation. Primes have been known to say thanks for considering their offer, but they have already found another sub.
Teaming Agreement management situations are never cut and dry. In some instances, the incumbent will “throw the sub a bone” to sign them up exclusive to keep them off of a competitor’s team. In this case, the sub might find themselves trapped on a team in which they get little or no work. If the sub goes for the bone, they should make sure that there’s some meat on it in the Exhibit A. If the incumbent is trying to take a sub out of the competition, it is because they are concerned about their competition. Unless the incumbent is offering a reasonable Exhibit A, the sub may want to find out who that competitor is and approach them. Time is of the essence, so it’s really beneficial for the sub to have its own Teaming Agreement management strategy in place very early in the game.
Teaming Agreement management strategies and capture discussions are generally focused around the perspective of a prime going after an opportunity. Capture methodologies such as Shipley encourage companies to start their capture process as early as possible. The same approach should be used with major or strategic opportunities on which a company plans to be a sub. They need to get in the game a year to 18 months out so that they truly know the competitive landscape. Smart primes will approach the subs early in the capture process. If the sub hasn’t done their homework, they will be at a significant disadvantage.
C2P provides the business intelligence that subs need to determine when key opportunities are set to expire, analytics to assess subcontractor spending, and customized pipeline management to accurately track the capture of each opportunity whether it’s as a prime or sub. C2P’s Teaming Agreement management feature also provides an easy to follow dashboard to show proposed workshare, NDA/TA status, and ability to notate what’s being discussed with potential primes. Success at being a sub doesn’t simply involve being exclusive on a team, it requires careful evaluation of the teaming possibilities early in the capture cycle.