Prime Federal Contractors
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Federal contracting officers are no different. They too enjoy having a variety of choices. That’s getting tougher for them.
With the consolidation of prime weapons contractors from 51 in the 1990s to five in 2022, the number of options available to government customers has steadily dropped over the past 30 years. To stand out in today’s competitive landscape, primes need to be asking themselves how they can provide their government customers with more options through their already held contract vehicles.
One approach—build out a robust and varied small business pipeline to offer your government customers accessible options.
The benefits to large primes of sustaining small supplier and teaming partner networks are five-fold:
Lower perceived risk: If the pandemic taught us anything, it’s that a single point of failure, like a sole supplier of a critical component, is a significant risk that can cause a catastrophic system failure.
In federal contracting terms, vendors with single points of failure in their supply chains run higher risks of delays and cost overruns than those with diversified supply chains of healthy small businesses. If the goal is to maintain a high rate of availability and reliability, having a robust supply chain helps ensure that and lowers perceived risk in the customer’s eyes.
Best targeted solution: Small businesses have a unique advantage of being able to pivot quickly and provide agile and responsive development processes that truly adapt to evolving edge requirements. They often provide a niche or specialized product that isn’t yet offered by large system integrators.
Offering a small/large business pairing can deliver more value and allow the prime and their customer to access bleeding-edge tech as a faster alternative to developing it in-house.
Access new markets: The first contract is the hardest to win. This is no different for large primes. When contemplating new market entry, large primes can look to their small business counterparts with existing contracts or other footholds in agencies of interest.
Supporting small businesses for set-aside bids limits the competition further and allows the prime, as a subcontractor, to get a piece of a pie that would otherwise be limited. Ultimately, the customer gets additional capabilities from the small prime.
New technology integration: Large primes with varied supply chains of agile small businesses are substantially more likely to be conscious of emerging tech and keep interoperability in mind while developing and maintaining their large platforms. Small businesses can integrate technology rapidly.
Congressional satisfaction: Congressional interest in small business mentor-protégé programs has increased in recent years for a variety of reasons, but primarily because they help small businesses become competitive as federal contractors. That, in turn, creates and retains jobs.
Mentor firms have incentives to maintain more resilient supply chains and meet subcontracting goals. They can receive reimbursement of certain expenses for participation.
Maintaining a robust and varied portfolio of small business partners gives your government customer more options and raises your odds of winning across the board.