How to Operate as a Prime in a Multiple Award ContractPosted: May 9, 2013
Congratulations, you’ve won a big IDIQ, where you’re the prime. You got together with a bunch of subcontractors, and now as a group you have won the right to bid on task orders for a given scope or collection of individual agencies.
So here you are, probably with visions of dollar signs, because IDIQ contracts usually have big ceilings. You’re probably thinking, “Send me the revenue!”
Not so fast. Here are seven components you need to understand about operating as a prime in a multiple award contract:
1. Know the customer
As we’ve talked about many, many times, the fish aren’t going to jump in the boat. If you don’t have a relationship with the customer, chances are you won’t get the job.
The exception to this would be contract orders that are based on LPTA or “least price, technically acceptable.”
You also have to understand that you can’t count on your relationship with the contracting officer who issued your contract, because that may or may not be who issues your task orders. In many cases the contracting officers will be in the actual sites that are using this contract to get their work out.
2. Meet with your team regularly
Go over prospective task orders and make an honest assessment of whether you can win. This may be a task order you’ve never seen before, but one of your subcontractors may have a relationship with the customer.
3. Keep up with deal flow and make sure you’re in front of all the potential customers in some fashion
Let’s take a big obvious example like the Navy’s SeaPort-e, an electronic portal where 1,800+ IDIQ multiple award contract holders compete for task orders – 5-25 of which are issued every single day.
SeaPort-e also publish an advanced planning matrix every week, and a source’s sought list (asking for people who might be able to bid) – both of these notices are opportunities to identify a customer you can visit before the task order comes out.
What if you’re a typical small business, without the people available to be at all these agencies at once? This is where your team of subcontractors comes in. If you’ve built it carefully, you’ll have people who can touch all the different organizations that are eligible to use the contract.
As soon as you get one of these notices, find out which of your teammates might know this customer or do this work, and figure out how you can work together. Then you’ll be ready as soon as that task order is issued.
4. Bid when you can win, or when you want to meet the customer
In those cases where you don’t actually know the customer, and so your PWin (“probability of winning”) might be low, you might still want to send in a credible response. Not necessarily because you expect to win, although you always hope you will, but because when you get the debriefing, you have an opportunity to talk to the actual customer and build a relationship for the next task order.
5. Help your partners succeed, or get rid of them
Make sure you’re doing everything you can to work with your partners or teammates to help them succeed. If any of your partners are not responding, participating, or adding value, you need to get those people off your team. As an example, my company TAPE just got added to a contract that’s been in existence for a year, and we’ve been added because we can help that prime win more work (replacing former partners who weren’t helping).
6. Be a good prime, don’t steal the sub’s work
Let’s say you’re in the fortunate position where a sub has a piece of work they’ve been doing and they want to bring it to this contract vehicle. Work that out profitably, but do not take over your sub’s work. I’ve heard countless horror stories from small businesses who were on IDIQ contracts and had their work stolen by a big prime who suddenly took over their customers. It may seem tempting, but don’t do it. Those kinds of hits to your reputation do not go away.
7. Make sure you understand the subcontractor’s financing deal, so they can work profitably
There are many performance risks, but the worst performance risk of all is that the sub cannot pay their own people. Since most small companies aren’t in a position to pay the sub before the customer pays, there’s a further delay to the sub than they would normally experience. Can they wait that long?
Stay tuned for the third post in this three-part series (we started with Prime Versus Sub – A Critical Decision), this time focusing on how to operate as a subcontractor in a multiple award contract. Government contracting has shifted over the last 20-25 years. Today I’d say that probably 70% of service-based business from the federal government goes out via IDIQ or GSA schedules, so you’d better learn how to be a prime and you’d better learn how to be a sub.