Promoting Entrepreneurship To Create A Learning Organization

Involve the employees in the training process and encourage mentoring.

The organization mission is conveyed by continuous organization training. Internal experts can be very entrepreneurial in training approaches. Recognize and reward them for doing so and place them in lead positions in training programs. Organization training in business is a form of communication. It is not an academic pursuit, although elements of it may include learning new information. Still, it is not schooling in the sense of personal improvement as much as it is communication of company policy and expectations.

Employee Training

The most successful organizations pair experienced personnel on a staff basis with junior ones as models. Each has individual assignments and reports to the boss but the senior party is the example in the process/experience-driven aspects of the job and is available to answer questions. The younger individual infuses the older one with energy and new ideas much like osmosis. The result is a hybrid of old and new that works and has been put together by a team. The approach works extremely well, imposes on no one, results in the young and old learning by observation, satisfaction and recognition for collective efforts and reduction in the boss’s work load. A win-win all around.

Your Entry Points Into Small Business Federal Government Contracting

The Federal Government has a continuing need for products and services of every type to support ongoing operations and continued progress in the technical and IT fields.

Small business has lower overhead and G and A rates. The smaller enterprise has an opportunity to perform vital functions at lower cost burdens than the larger corporations.

This article will discuss product and service venues you may wish to consider and how to conduct market research to assess your potential entry point into small business federal government contracting.  

POINTS OF ENTRY

The best place to start in determining a government contracting entrance point is with successful commercial performance of services or product development. Very few, if any, commercial firms make the transition without that bridge.

From maintaining buildings to keeping the lights on, from grounds maintenance to flight maintenance, look for niches that can be pursued based on successful past performance, transitioning via industry teaming via subcontracts, partner roles with larger companies or in small business set aside orders for minor items and simpler services provided directly to the government.

The service venue is the most common entry point and services are at times the vehicles to achieve product development tailored to agency needs. Please see the following synopsis of  concepts in this area and associated links for more details on each:

Multiple Front Marketing

The prudent small business will target agencies and teaming partners that best fit its products and services, positioning itself to acquire developing information on requirements and displaying capabilities by conveying early solutions to customer decision makers. This article will suggest techniques, approaches and tools to conduct a multi-front, targeted, requirements-driven, marketing campaign for small business federal government contracting.

Multiple-Front Marketing

Small Business Set aside Designations 

There are 7 major, small business set-aside designations in federal government contracting. Below is a listing of these designations, divided into two groups, Self-Certifying at the Central Contractor Registration (CCR) and those where government certification is required.

Set-Aside Designations

Techniques for Product Development 

This article will suggest approaches in developing a product to the point where it can be marketed in the small business federal government contracting venue. Individuals usually succeed at such an endeavor by forming a company, separating it from their personal assets and then developing the company and its product(s); even if it is only a one-person operation at the start. 

Techniques for Products and Services Development

Teaming

While developing a government marketing plan, teaming with other companies is a productive venue for the small business. This article will convey general guidance pertinent to teaming and explore the types of teaming used successfully by small business federal government contractors.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other's contributions in pursuing large-scale projects.

Small Business Teaming in Federal Government Contracting

SUMMARY:

Small business federal government contracting is not rocket science - to succeed you must take what you do well in the commercial market place or what your experience leads you to believe you can plan successfully as a commercial enterprise and then apply it in a slightly different manner from a business perspective to accommodate federal government contracting requirements. Very few companies enter federal government contracting without some commercial experience and success. Very few start-ups entertain contracting exclusively to the federal government without commercial work to sustain operations while the more lengthy government procurement process is being pursued.

Federal government contracting is controlled by the Federal Acquisition Regulation (FAR). Bid and proposal types are driven by the nature of the supply or service being procured. No one reads the FAR cover to cover - It is a source book for when you need it. The FAR and associated regulations are taught in only a few colleges, such as the Defense Systems Acquisition University at Ft. Belvoir and the George Washington School of Government Contracting. Very few CPA's are familiar with the US Government FAR Cost Accounting Standards (CAS) and I am not aware of any questions regarding CAS on current CPA exams. In general one must grow to understand these requirements and that usually happens by doing business under them. 

A Framework For Federal Government Service Contracting Small Business Systems

Managing Teaming Relationship Risk in Small Business Federal Government Contracting

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 government contracting venue. 

Small Business Teaming

Managing Subcontractors And Independents As A Small Business Prime Contractor

HARD FACTS ABOUT THE ENVIRONMENT

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

Managing Government Contract 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.

What Small Business Should Know About FAR and CAS

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.

PROTECT INTELLECTUAL PROPERTY, RATES AND PERSONNEL

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.

Practical Intellectual Property Management for Small Business Federal Government Contractors

VET PROSPECTIVE INDUSTRY PARTNERS CAREFULLY

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. 

How Crazy Subcontractors Can Kill Your Bid

ACQUIRE ADVISERS AND SPECIALIZED HELP WHEN YOU NEED IT

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 Business Administration (SBA)

SCORE - Free Small Business Advice

REMEMBER:

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.

Acquiring An Incumbent Work Force As An Element Of Winning A Government Contract

INTRODUCTION

During the course of marketing to the federal government the small business will encounter opportunities involving potential for acquiring an incumbent work force as an element of winning a contract.  The acquisition of existing personnel already performing on a service contract is a way to exponentially grow a small enterprise. 

The purpose of this article is to discuss the acquisition of an incumbent work force and effectively managing the associated potential and challenges.

BACKGROUND

We have previously discussed planning and business systems for service contracting at the following postings:

Insights to Succeed In Service Contracting

Cost Center Strategic Planning

The above articles discuss basic business organization and systems necessary to support the service contracting environment and bring an incumbent workforce into a company.

HOW INCUMBENT WORK FORCES ARE PROPOSED

Your market research into future acquisitions in the service contracting industry to the federal government will lead you to existing work forces subject to assumption by a winning contractor.

Base operations contracts, long term service contracts of an IDIQ nature and similar programs have competitive phases or are re-designated for a small business prime contractor if the government deems a pool of qualified companies is available to compete. Researching potential programs of this nature and marketing them is discussed in the following article:

Marketing to Achieve a Small Business Set-aside Contract

In some instances a larger contractor holding the existing work force is displaced from a program to meet agency statutory requirements for contracting to small business or because the existing contractor has grown to exceed the size standard for a small business on the program.  

Under these conditions a teaming arrangement may be possible with the departing contractor,resulting his assuming a lesser role in the effort (we suggest no more than 40%) as a subcontractor to you.  Do so only if the company is highly regarded by the customer from a past performance perspective and when you can negotiate an exclusive arrangement with him during the proposal phase of the program. Teaming arrangements are discussed at the following posting:

Small Business Teaming

If a teaming arrangement cannot be achieved with the existing incumbent you must gain access to the incumbent personnel salary history and benefits to effectively bid the program for the out years in response to a solicitation.  Speculating on what the personnel make or relying on the government or the incumbent to provide the data is risky. Although some solicitations will provide a government “Wage/Rate Determination”, that document is the minimum and seldom represents the actual salaries of the employees. The only other meaningful document commonly provided is a union bargaining agreement still in force. 

Some companies will publish a help wanted advertisement in the local paper and invite the incumbent personnel to attend an off site open house, asking for sign offs on contingent hire agreements for use in the proposal, together with resumes:

Contingent Hire Agreements

It is important to remember that although the RFP may go so far as to say incumbent personnel have first rights of refusal for future positions, you are not legally obligated to hire what you feel are poor performers. You will, however, have to specify your criteria for personnel selection in your proposal and, especially for personnel the government has listed as “Key” in the RFP, explain how you intend to utilize existing people or bring in new ones. 

The competitive environment on a given procurement will drive how much you disclose in the way of openness in terms of publicly announcing your intentions to bid and acquire the personnel data you need to do so effectively.  You must conduct effective research and propose a winning wage and fringe package that appeals, not only to the personnel you wish to retain, but also to your customer.

Do not count on gaining access to incumbents through the government or being able to go on government property to interview them.  In most instances you will not be allowed to do

so or it would compromise your proposal from a conflict of interest perspective if you did. 

 A TRANSITION PLAN IS KEY

A winning proposal will have solid plans for recruiting and retaining the existing work force, executing a transition plan and insuring that the government does not encounter an interruption in services.

 Carefully analyze the solicitation requirements for elements for which the government expects to see a response pertinent to incumbent personnel. Prepare a graphic schedule and specific set of activities to transition the incumbent personnel to your company after contract award. Make sure the activities are overlaid upon the technical and management schedules elsewhere in your proposal and supports them. 

Your transition plan topics should address administrative, human resources, training and similar factors to insure a seamless process.  

SUMMARY

Acquiring an incumbent work force poses both opportunities and risks for a small enterprise.  Understanding the above factors and assessing your ability to manage the challenge will best prepare you for the decision whether or not to bid such a program. 

How Crazy Subcontractors Can Kill Your Bid

EDITOR'S NOTE: 

The following article by Bob Lohfeld in “Washington Technology” a few years ago is still an excellent primer on the challenges associated with subcontractor management when teaming with other firms in small business federal government contracting. I work with clients regularly who are encountering these risks.  Ken Larson

"WASHINGTON TECHNOLOGY"

"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."

 http://washingtontechnology.com/Articles/2013/11/18/Insights-Lohfeld-crazy-subcontractors.aspx?Page=1

About the Author:  Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. E-mail is robert.lohfeld@lohfeldconsulting.com.