The field of federal government subcontracting is all about the details, follow through, and proper execution of the work. Subcontracts can be very complex and sometimes require a team of people to work on, evaluate, and manage. There are six key considerations which prime contractors and subcontractors should look at for every contract.
First, consider the terms and conditions of the contract, be it the subcontract or prime contract. Even though the subcontractor may not be under direct contract with the government, they should consider all the terms and conditions, including all of the flow-downs from the Federal Acquisition Regulations (FAR) or Uniform Commercial Code (UCC). It is the responsibility of the prime contractor to ensure all of its subcontractors are operating within the guidelines set forth in the prime contract.
Proper matchmaking is a must when subcontracting with or to other businesses. It’s important to make sure you are dealing with a partner that has a good reputation, provides quality work, is able to meet deadlines, and has the proper structure in place to handle the scope of work. Within your organization, ask a few critical questions such as: Do our goals align with this potential sub/prime contractor? What happens if the prime or sub become a large business as a result of this contract? Are our management styles compatible? Setting up a list of questions that are important to your company and its government contracting goals is a great best practice procedure.
Be sure to structure the relationship between the prime and subcontractor before the work begins. This includes making sure each party is up to date with subcontract management policies and procedures (FAR 52.244-2 and DFARS 252.244.7001). The prime is responsible for making sure the subcontractor’s estimating, accounting, and purchasing systems are adequate and up to date. It is good practice to have a sufficient amount of meetings with the contracting teams and project teams to establish a solid relationship structure. Consider what happens when the prime or sub fail at a particular level, or what happens when a key resource is no longer available.
Meeting with the contracting teams, project, and program teams are a great way to formulate the best winning strategies. It may be easy, in theory, to execute on the scope of work. In reality, it is essential for the prime and subcontractors to openly communicate and work through every detail of a contract in order to setup a winning proposal.
Post-award management is just as important as any other step in the process. Proper management of the contract and the sub/prime relationship can be detrimental to the existing contract, and future opportunities. During the proposal constructing process your teams should develop procedures, work-flows, processes, reporting schedules and tactics, and a project management structure that supports the contract. Now is the time to perform these tasks according to the contract and SOW. There are proposal management software solutions to help manage projects and contracts. Deltek is a software solution that may be helpful to some, www.deltek.com.
There may be complications in the contract or between the sub and prime contractors along the way, where both parties are dealing with disputes. While in the relationship structuring phase of the proposal, management should arrange for procedures and guidelines to follow in case of disputes. It’s easier if the dispute procedures are in place prior to the award and execution of the contract, so the disputes may be swiftly addressed and dealt with to avoid downtime or non-compliance issues. This is a great place to pre-determine fail-safe procedures, and setup backup reporting systems.
These considerations are a set of general guidelines for key subcontracting practices. There are many great resources to help with contract and proposal management. The National Contract Management Association is a great resource for government contracting: www.ncmahq.org. There are also Procurement Technical Assistance Centers throughout the United States that are designed to help businesses seek out and bid on government contracts. Visit www.aptac-us.org for more information. The Federal Acquisition Regulations can be found at www.acquisition.gov/far/ which contain the regulations guidelines for federal government contracts.
Evans Distribution Systems
Evans Distribution Systems is a full service third party logistics company dedicated to providing customers with innovative and flexible supply chain management solutions. Established in 1929, Evans is a family-owned and operated logistics company offering customers a one-stop solution for warehousing and distribution, transportation, contract packaging, quality inspection, staffing and other logistics-related services.
By Derek Byrd, Evans Distribution Systems
