Two Is Better Than One: What You Need to Know About Teaming Providing education and guidance for all aspiring, current and graduate 8(a) businesses

What is Teaming? It’s about opening new doors and finding new opportunities to help your business grow in ways it wouldn’t be able to alone.

3 3 | Two Is Better Than One: What You Need To Know About Teaming Why Team? The larger the contract, the more resources a small business needs in order to qualify for the contract. Teaming with other small businesses helps you expand your resources by pooling services, past performance, financial capacity and product offerings.

4 | Two Is Better Than One: What You Need To Know About Teaming Why Team? The Government will recognize the integrity and validity of contractor team arrangements, provided the arrangements are identified and company relationships are fully disclosed in an offer, or for arrangements entered into after submission of an offer, before the arrangement becomes effective. (FAR 9.603) INSIGHT You should form teams before the government posts a formal solicitation.

5 | Two Is Better Than One: What You Need To Know About Teaming Acceptable Teaming Arrangements Federal Acquisition Regulation (FAR) reads: “Contractor team arrangement,” as used in this subpart, means an arrangement in which two or more companies form a partnership or joint venture to act as a potential prime contractor A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program

6 | Two Is Better Than One: What You Need To Know About Teaming Industry-Specific Teaming Rules The small business is required to do a certain percentage of the awarded contracts with its own employees. FAR : Established by 13 CFR (2015) SB Prime Contractor Must Perform Specified Minimum Amounts of Work When the Contract is Set Aside for SB or 8(a), Sole Source or Competitive (Minimum Work Also Specified for WOSB, HUBZone and SDVOSB) Services = 51% of Work with Own Employees Supplies or Products = 51% of Cost of Manufacturing Not Including Cost of Materials General Construction = At Least 15%, Not Including Cost of Materials Special Trade Construction = 25% Cost of the Contract with Own Employees, Not Including Cost of Materials Minimum Work Also Specified for WOSB/EDWOSB, HUBZone and SDVOSB

7 | Two Is Better Than One: What You Need To Know About Teaming New Rule Update Limitations of Subcontracting New Rule Update rewrites 13 CFR 125.6: Small Business, 8(a), WOSB, HUBZone and SDVOSB services and supplies. Key revisions include that no more than 50% of the amount paid by the government to the prime may be paid to firms, at any tier, that are not similarly situated. INSIGHT: 50% of the government contract award must go to the small business prime.

8 | Two Is Better Than One: What You Need To Know About Teaming New Rule Definitions and Interpretations The new SBA rule will include a number of important definitions, as well as insights as to how the SBA will interpret the new regulations. Among the key changes is the concept of a Similarly Situated Entity. This concept is critical to the understanding and enforcement of the new rules. The rule provides that “a similarly situated entity subcontractor is a small business concern subcontractor that is a participant of the same SBA program that qualified the prime contractor as an eligible offer or and awardee of the contract.”

9 | Two Is Better Than One: What You Need To Know About Teaming How Teaming Can Create Opportunities By teaming you can: Increase your company’s capabilities Cover more regions Share resources to enhance offerings and save money Take on more work For instance, a contract may require that you have both an East Coast and West Coast presence. By teaming with someone on the opposite coast, you’ll be able to meet the requirement.

10 | Two Is Better Than One: What You Need To Know About Teaming Benefits of Teaming Access to: Financial resources Bonding Key personnel Equipment Contacts/established relationships

11 | Two Is Better Than One: What You Need To Know About Teaming Key Requirements For Teaming The government has to have a demand for what your team has to offer; creating teams just for the sake of creating teams will get you nowhere. Team members need to complement each other; the teams need to make sense. Pairing an IT company with a tree cutting company makes no sense. Pairing a tree cutting company with a landscaping business makes sense.

12 | Two Is Better Than One: What You Need To Know About Teaming Types of Teaming Arrangements 1.Partnerships 2.Joint Ventures 3.Mentor-Protégé 4.Prime Contractor-Subcontractor

13 | Two Is Better Than One: What You Need To Know About Teaming Partnerships New entity with separate identity from both partner businesses Partners are bound by the permanent partnership agreement until dissolved Partners share in profit and losses

14 | Two Is Better Than One: What You Need To Know About Teaming Joint Ventures Partnership with a limited term or purpose, usually to perform a specific contract or requirement New entity with new, separate identity Partners are bound by a joint venture agreement Share in profit and losses

15 | Two Is Better Than One: What You Need To Know About Teaming Mentor-Protégé Relationships Teacher/Student relationship between a large business (Mentor) and small business (Protégé) Each business maintains its separate identity Relationship must be certified through a federal agency program What’s in it for participants? Mentors gain access to small business opportunities Protégés can go after larger contracts

16 | Two Is Better Than One: What You Need To Know About Teaming Mentor-Protégé Relationships Mentor shares lessons learned, technical assistance, contacts, and may share resources Protégé must have the capacity and potential to subcontract Agreement contains milestones for Protégé growth

17 | Two Is Better Than One: What You Need To Know About Teaming Federal Mentor-Protégé Programs There are several types of Mentor-Protégé Agreements. Some are sponsored by the SBA and some are offered within a specific agency. For example: GSA (General Services Administration) SBA (Small Business Administration) U.S. Department of the Treasury U.S. Department of Defense U.S. Department of Veterans Affairs U.S. Department of Energy U.S. Department of Homeland Security FAA (Federal Aviation Administration) NASA (National Aeronautics and Space Administration)

18 | Two Is Better Than One: What You Need To Know About Teaming Prime Contractor-Subcontractor Relationships May be a long-term relationship in which only the prime contractor has a direct relationship with the client agency Each business maintains its separate identity Team in advance, once an opportunity is identified Flexible arrangement: Larger business can be prime contractor and smaller business can be subcontractor (or vice versa) What’s in it for participants? Subcontracting is the best way to acquire experience in a new market

Teaming: How to Get Started

20 | Two Is Better Than One: What You Need To Know About Teaming Pre-Teaming Considerations Take an inventory of what each team member brings to the table. How does each team member complement the other’s capabilities? Consider: Unique skills, products, services, personnel, etc. Contacts Strengths and weaknesses

21 | Two Is Better Than One: What You Need To Know About Teaming Finding Potential Teaming Partners Where to find potential teaming partners: Events such as the OPEN for Government Contracting: Success Series Industry events Local/Federal government events Interested vendors (found in FedBizOpps) Awarded contractors Previous employers

22 | Two Is Better Than One: What You Need To Know About Teaming Vetting Potential Teaming Partners Financial stability Industry reputation Reliability/dependability Experience Past performance Conflicts of interest Geographic location Certifications/licenses Areas of expertise

23 | Two Is Better Than One: What You Need To Know About Teaming Putting a Team Together Step 1: Identify the opportunity Understand the opportunity Be honest about the capability you have to offer for that opportunity Step 2: Search for potential partners Make contact with qualified teaming partner Have an open, honest discussion with teaming partners on what everyone can bring to the table Step 3: Vet potential partners Do your due diligence Step 4: Move forward with partnership

24 | Two Is Better Than One: What You Need To Know About Teaming Written Agreement: Best Practices Define roles, responsibilities and obligations Identify teaming partner tasks and deliverables as stated in Contract and Statement of Work How will opportunities be researched and evaluated? How will bids/proposals be prepared? Who will do the invoicing? How will revenue be distributed? Who will be the client point of contact? Who will handle the administrative work?

25 | Two Is Better Than One: What You Need To Know About Teaming Written Agreement: Best Practices Be specific and thorough Identify known knowns, known unknowns, and unknown unknowns Create contingency plans Have a mitigation and remediation process Use language that protects proprietary information/products Include non-disclosure language Schedule regular progress meetings Be clear and honest Have a consensus on next steps Work with a lawyer to put all agreements in writing

26 | Two Is Better Than One: What You Need To Know About Teaming When To Team Team to search for appropriate opportunities. Team to submit proposals for particular opportunities. Remember, a teaming partner is an extension of your firm, so use caution when pursuing a teaming partner.