Contracting Officer Podcast Slides Knowledge & Insights From Contracting Officers

Subcontracting and Teaming Episode 029 Subcontracting and Teaming Original Air Date: June 1, 2015 Hosts: Kevin Jans & Paul Schauer

Formatting notes Hyperlinks: Blue font indicates hyperlinks – presentation must be in ‘Slide Show’ mode to activate the link Red bold font indicates a point of emphasis Green bold font indicates CO’s personal comment or perspective

Introduction Purpose of this podcast: Explain some of the delicate balance companies play as they compete, then team, then compete again

When does Subcontracting & Teaming happen? Acquisition Time Zones (from Podcast Episode 003) Requirements Zone Market Research Zone RFP Zone (proposal zone) Source Selection Zone Execution Time Zones (from Podcast Episode 084) Kick Off Zone Performance Zone Re-compete Zone Wrap-up Zone

Different Types of Contracting ‘Teams’ Competitors For an effort For an agency For key people For access to limited resources For everything (This is the stereotype; like many stereotypes, it’s hyperbole.)

Different Types of Contracting ‘Teams’ Forced Teams Teammate Work together for these same resources, opportunities, etc. “Co-opetition” When companies compete one day and team the next They are all subcontractors to the Government team

Teaming Partner vs. Subcontractor Book answer: Just for Fun: Neither “teammate” nor “subcontractor” are listed in FAR Part 2.101 – Definitions BUT …subcontracting has its own part of the FAR: Part 44 – Subcontracting Policies & Procedures FAR 44.101 – Definitions. This applies when “consent to subcontract” is required (on many acquisitions over $150,000)

FAR 44 – Subcontracting Policies & Procedures “Subcontract” means any contract to furnish supplies or services to a prime contract or subcontract. “Subcontractor” means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor. CO considerations when offerors use subcontractors: FR 44.202-2, such as Was adequate price competition obtained? Is the proposed subcontract type appropriate for the risks involved?

Why are Teaming arrangements important? Why companies team? They NEED to … Share costs, capabilities, risk, etc. Meet set-aside requirements in order to win the contract

Why are Teaming arrangements important? Why not team? Do not have to share … Profit, credit, past performance, etc. Loss of control – must compromise and defer to partner requirements NOTE: Everyone must understand the unintended consequence of the partnership Ex: must demonstrate capability of managing subcontractors

Why Should Government Care? Contractors are not all enemies all the time They are not all friends all the time either The evaluators must decide if the teams can work together; is the subcontracting effort: Required (Large Business criteria, etc.)? Preferred? Value added?

Why Should Government Care? If the Government team wants a real vote on this… Put it in the evaluation criteria Even better, make it part of your market research! RFI Industry Day Seek feedback for the best approach!

Why Should Industry Care? Government team needs to really understand your relationship What’s in it for them? What do your subcontractors bring? They are likely to only see a ‘pass through’ (see FAR 52.215-23 – Limitations on Pass-Through Charges (Oct 2009) ) NOTE: Everyone but the prime is a “subcontractor” Government still wants only one ‘belly button’

Summary Government needs to plan for subcontracting plans when devising the Acquisition Strategy Market research, RFIs, etc. Government needs to understand ‘co-opetition’ Contractors need to understand Government’s intent for subcontracting, and articulate their plan effectively in the proposal

Contact us We are on LinkedIn, Twitter and Facebook We also started the Government Contracting Network Group on Facebook. Join us there! Send your topics to paul@Contractingofficerpodcast.com For Community support, contact Shelley Hall at shelley.hall@skywayacquisition.com