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Tuesday, April 1, 2014



Most small businesses, particularly those selling services, will encounter the need to team with industry partners in small business federal government contracting. As a prime contractor, a supplier or a subcontractor, the need to carefully develop stable relationships is a prime driver for success in the venue. We have previously discussed the relative mechanics of such relationships:

The purpose of this article is to offer management insights to the practical business of managing these relationships.


Be prepared to encounter challenges in the areas discussed below. They are presented because they occur enough that you should be aware of them.  It is astute to manage the associated risks.
Initial challenges for the small business in government contracting are not so much in the areas of barriers as they are in lack knowledge (which I concede is a form of barrier but one that can be dealt with). In short, be aware of what you do not know you do not know.

Lack of knowledge goes all the way from local and state employment law to federal  contracting rules. Enough small businesses have succeeded in the venue that it has proven small enterprise education, with trained personnel in government and prime contractors to do so, greatly enhances success.

Contracting officer's, either government or corporate, and their staffs are often not equipped in the skills necessary to guide the small business.

Large business and government agencies often inadvertently take advantage of the small enterprise lack of knowledge or make poor assumptions regarding what a small business knows. This can lead directly to abusive practices.

A prime example of an abusive practice is large corporations signing teaming agreements during proposal efforts and then not awarding subcontracts to the small enterprise as agreed, keeping the majority of work for themselves.  They then recruit the help away the small enterprise.

Agencies often take extended time frames to put in place prime contracts after source selection and award to a small business. They do not realize that a small enterprise does not have deep pockets and must have cash flow to sustain a new program with new employees.

Funding levels on programs are often insufficiently committed and the small enterprise is not adequately informed about limitation of funds and funding exposure

One of the most common traumatic situations is newly established enterprises having no job cost government compliant business system in place. The industry partner(s) or the government have assumed that capability will materialize and when it does not the government audits the bills, finds no backup and shuts down the cash flow until the system is fixed. At that point the business can fail. The company should have become educated much earlier in the process about these requirements.

The number of poorly performing SETA contractors in roles not suited to them in government contracting officer support is increasing in federal agencies. These firms need to be vetted and better managed for the omissions and commissions they contribute to the above. 

Not every small enterprise can get into a class on government contracting at George Washington University, The Defense Acquisition University or send their personnel to lengthy and costly seminars conducted by organizations like the National Contract Management Association. These are all great education sources but do not come close to filling the complete requirement and cost time and money.


The nature of the government contracting venue is that you may very well find yourself teaming with a company on a major, long term project and competing against them on another project where the team makeup is different. It is therefore essential to protect your intellectual property, your rates and your personnel.


Not every company that approaches you with a suggested teaming arrangement will be ethical, straight forward and honest. Vet them carefully through the Better Business Bureau, a Dunn and Bradstreet Report, references and searches on their prior business arrangements, contract awards, business activities, subsidiaries and history. 


There are free or very low cost resources through local government organizations who can assist the small business in understanding the government contracting venue.

Small Businesses Administration (SBA)

Small Businesses Development Center (SBDC)

Procurement Technical Assistance Centers (PTEC)

The Service Corps or Retired Executives (SCORE)


Be straight-forward and honest with your industry teaming partners.

Do not violate share arrangements, teaming agreements or non-disclosure agreements. Such violations are a death knell for your reputation in the business.

Do not become known as a resource raider by hiring away from other firms with whom you have teamed.

Give it your best shot as a prime or a sub but involve the government contracting officer if you must resolve industry teaming disputes that may damage your past performance record.

Exclusivity is the practical way to go on any given program. Team early and exclusively then give it your all and be a winner. Your reputation is key, ethics count and your customers as well as your industry are observing you.

Saturday, March 1, 2014



Image courtesy mapmtalent dot com


As fast as things move these days if we don't train and communicate effectively we are running very high risks.  The modern era in which we live demands that training is sophisticated, interactive and responsive to changing times.  It should evolve out of core company processes and contain feedback mechanisms.

Some training will be global, such as policy, corporate ethics and human relations. Other training will be specialized, such as changes in law, company policy  or technology by functional areas.

Principal among the topics at the head of the list for generic training in the art of something would be "Communicating Effectively" to employees to customers, to regulators;  both orally and in writing.  


Once the span of control of the major functions begins to grow or get more complex,  the manager in charge establishes processes and a policy to insure the company succeeds. If this is overdone in many instances it can result in a bureaucratic environment that stifles innovation.

Only those firms that recognize this human weakness and take steps to minimize its impact continue to foster innovation and lean operation.
Functional interface points are the most sensitive. These are the critical areas where one functional organization meets another in the company.


Engineering Design meets Manufacturing
Finance meets Estimating
Marketing meets Project Management
Accounting meets Cost Control
Human Resources meets the Hiring Manager

If management fails to understand the risk in these interfacing areas and drives the procedural and process detail too low the organizations will strangle each other with interface control issues and efficiency will suffer.


Train with the idea that materials will be used in customer proposals and reflect internal processes for consistency.  

Make sure the company vision, mission and capability statement are common knowledge:

Insist that public law compliance, fair employment, EEO and anti-discrimination, practices, government property care and other regulatory matters are reflected in process and training materials.

Convey the company travel and expense reports

Train on time card process and completion timeliness

Issue guidance on intranet and company press releases

Instruct on customer relations and customer service

Provide details on handling government and audits and insure to name focal points for these activities.

Convey negotiation techniques and skills expected to those whose roles involve committing the company

If ISO 9000, TQM, Six Sigma and other major quality and process programs the above are in our future, use your training program and processes to build certification preparedness. 


Training in business is a form of communication. It is not an academic   pursuit, although elements of it may include leaning new information.  
Still, it is not schooling in the sense of personal improvement as much as it is communication of company policy and expectations

 The best organizations make sure everyone from the chairman of the board to the janitor understands that training is a privilege, a right and a requirement and that it will be conducted as a matter of record for everyone.

Saturday, February 1, 2014

Wednesday, January 1, 2014

COMING IN FEBRUARY - 2014 A FREE Companion Supplement to "Small Business Federal Government Contracting" Guidebook

Look for the free companion supplement coming soon to "Small Business Federal Government Contracting".

The guidebook has been available as a free download at this site since 2012 and will remain so as a service to small business. 

Targeted for publication in February of 2014, the supplement
will offer19 additional topics.

Like the basic book, the supplement will be available as a free download from the first, vertical Box Net cube in the left margin of this site. 

Projected supplement topics are annotated in RED on the 2012 table of contents at the below illustration. 

We look forward to seeing you back at "Small to Feds"  on February 1st for your copy.


Saturday, December 21, 2013

Quora Top Writer 2013 Award

A Neat Award from Quora. Quill and Ink badge on Quora profile and a fleece jacket with emblem.

This year's class includes 650 writers representing over 40 countries.

Click on page linked below for quill and ink badge to view details. 
(no registration required).

Sunday, December 1, 2013

How crazy subcontractors can kill your bid

The following article by Bob Lohfeld of “Washington Technology” is an excellent primer in the challenges and risks associated with subcontractor management when teaming with other firms in small business federal government contracting.


"Have you ever had a subcontractor kill your bid? Surprisingly, it’s not all that infrequent that a subcontractor can do you in. 

Here are some of the situations we have seen this year from companies  who have called us for help, generally after it is too late to fix the  problem. Since many of these teaming nightmares could have been  prevented with some good counseling earlier in the bidding process, I  thought I would share some of these with you and also offer advice that  you can use to keep these problems from happening to you.

Subcontractor teaming restrictions
A recent government solicitation stated that prime contractors were  encouraged to team with multiple smaller businesses in order to fulfill  the socioeconomic goals of the procurement. The request for proposals  further stated that subcontractors shall be limited to teaming with only  one prime contractor and cannot be a subcontractor on multiple teams.  I’m sure you have seen this kind of restricted teaming language before.

The prime contractor who called said they selected their small  business subcontractors and executed teaming agreements with each, wrote  a fine proposal which was submitted on time, and then got a letter back  from the government saying their proposal had been rejected.

They explained that apparently, their subcontractor thought that if  teaming with one prime contractor was good, teaming with multiple primes  was better. Even though the subcontractor signed an exclusive teaming  agreement with the prime contractor, they teamed with multiple companies  in order to increase their chances of winning. All prime contractors  who teamed with this subcontractor had their proposals rejected.

We told the prime that in the future, when an RFP contains specific  language restricting subcontractor teaming, we recommend that this  language be included in an addendum to the teaming agreement and the  addendum be signed by an executive of the subcontractor certifying that  they have teamed in accordance with the teaming restrictions.

Regrettably, in this case, it was too late to correct the problem.

Subcontractor conflict of interest
A solicitation required the prime and its subcontractors to  individually certify that they had no organizational conflict of  interest (OCI). Less than one week prior to submission, the  subcontractor’s contracting officer (CO) on a related contract indicated  he thought the subcontractor had an OCI on the job the company was  bidding.

The subcontractor communicated the news to the prime and indicated  the issue was resolved. The subcontractor signed the OCI certification,  and the prime contractor submitted the proposal. Shortly after the  proposal was submitted, the contracting office notified the prime  contractor that their bid had been rejected due to the subcontractor’s  OCI.

The prime contractor challenged the rejection by asking the CO to  evaluate the bid without the subcontractor’s input, and while the CO  sympathized with the prime contractor, the decision rejecting the bid  stood.

Clearly this subcontractor wanted to run from its OCI problem and  signing a statement that a conflict doesn’t exist does not make the  conflict go away. We advised that the prime to get an OCI determination  directly from the government before submitting its proposal and if this  could not be resolved prior to submission, the prime should either  submit an OCI mitigation plan with its proposal or submit an alternate  proposal without the subcontractor rather than risk its entire proposal  being rejected because of an unresolved OCI problem.
Getting the subcontractor to certify that an OCI problem does not  exists is not sufficient since it is the government who is the final  arbitrator of whether or not there is an OCI issue.  Relying on the  subcontractor’s certification statement cost the prime contractor its  bid.

Subcontractor poor past performance
A prime contractor identified several small businesses that had  direct contract experience with the customer and invited these companies  to join their team. The sales reps from the small businesses boasted  how well they knew the customer, how strong their relationships were,  and how insightful they were about the work being competed. It was a  perfect match, and the prime signed up the subcontractors.

The prime and the subcontractors worked hard on the proposal. The  prime submitted the bid, and shortly thereafter was told they lost. In  the debriefing, the government indicated the subcontractors’ past  performances was marginal and was overstated in the proposal. As a  result, the government down-scored the proposal based on the poor  subcontractor past performance and overstated claims.

I suppose no sales rep has ever told a prime contractor that his/her  firms performance was marginal and they had a lousy relationship with  the customer. After all, sales reps wouldn’t last very long in that  position if they didn’t put a positive spin on a marginal situation.

Subcontractors with extreme incumbentitis
The government changed the size standard on the recompete of a  contract, forcing the incumbent to look for a company with the right  size standard and socio-economic certification to prime their contract.  After careful deliberation, they identified a partner who had a  long-term history with the client and an outstanding reputation. The  teaming agreement was signed and the proposal was begun.

Next, the incumbent proceeded to make the new prime’s life miserable.  They developed an extreme case of incumbentitis, could not understand  the necessity of improving their processes on the new contract, thought  every benefit rested on the argument that they were the incumbent, and  were extremely cautious sharing information with the prime contractor  even to the detriment of the bid.
The incumbent insisted that the proposal only had to conform with  section C (statement of work) of the RFP, not section L (proposal  instructions) and M (proposal evaluation criteria). According to  subcontractor, they never paid attention to L and M, only the SOW. They  were quite adamant and disrupted all review meetings.

To resolve these issues, we arbitrated a meeting between the top  executives of both firms resulting in the subcontractor changing out the  people supporting the proposal. With new, more reasonable players  involved, progress is being made towards a winning proposal but much  valuable time has been lost in the exercise of forming a highly  functioning team. We’ll have to wait to see how this one turns out.

A positive outlook on teaming
Not all teaming arrangements turn out badly. If you want to read more  about teaming and the characteristics that make teaming successful,  refer to Washington Technology’s articles by Nick Wakeman about the
WT Insider Reports.

However, if you can’t resist telling your story about how a  subcontractor sunk your bid, please add it to the comments section  below. Truth is stranger than fiction so let’s hear what you have to  say."

About the Author:  Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. E-mail is