In a previous article, I talked about how the enormous opportunity that government contracting presents: out of the more than $500 billion the U.S. government spends annually on goods and services each year, 23 percent is required to be fulfilled by small businesses.  In the 2008 fiscal year, $93.3 billion went to small businesses.  If you haven’t considered government contracting, I encourage you to do so.  If you have looked into some of the opportunities but thought “… but my company is too small to handle that business,” then I encourage you to consider Teaming.

What Is Teaming?

Simply put, Teaming refers to two (or more) businesses combining their experience and assets in some form, such as a partnership, a joint venture, or contractor/subcontractor.  What each contributes doesn’t necessarily have to be equal; contracts are frequently offered to larger corporations who must partner with small businesses in order to keep those contracts.  What’s important is how Teaming enables multiple companies the chance to go after contracts that individually they would not be able to secure.  An example would be when the required workforce or product quantity is too large for either company, but combined, they can fulfill the requirements. The government looks for total solutions. A good example we use is if you need office supplies you don’t go to a paperclip vendor and then a Rubberband manufacturer.

The Advantages

Among the advantages offered by Teaming is that it can help you build credibility and demonstrate proficiency to the government and other contractors.  The government is, like any business, risk-averse.  So Teaming can help you build your profile not only in number of people on your “team”, but also in the experience and resources.  In assessing potential contract awardees, the government looks at past performance.  If your company is fairly young, teaming with a more established business can give you the chance to combine your experience.  And, teaming with other companies can provide increased personnel and equipment, as well as greater access to capital and bonding, which can be very important.  

For Theresa Daytner, owner of Daytner Construction Group, Teaming has helped her organization of less than 10 people gain access to federal contracts.  In the last year, she secured close to $14 million in federal contracts through Teaming partners.  You can also read more of Theresa’s story in her Featured Cardmember Story.

What to Consider

A key consideration when evaluating another company for a potential teaming relationship is if their core capabilities are compatible with yours.  Do their products or services complement yours?  It probably goes without saying that their reputation, past performance, and financial stability should be key considerations, as well.

You should also look at their culture and communication style.  If they’re not very open during initial discussions, then how will they communicate when there are issues?  Everything else could seem exemplary, but if you don’t feel like this is someone you can build a strong relationship with, then this may not be the best partner for you.  

Formalize the Relationship

Once you’ve found the right partner and identified the contract you wish to jointly pursue, go through a complete project inventory – the objectives, deliverables, timeline, resources, etc. – and decide on all of those details in advance.  Take the time to create a written agreement in advance that clearly outlines who is responsible for what, so you can eliminate any guesswork that may come up later.  As some details can change during the course of a project, make sure you establish some broader parameters, as well.

While I’ve only provided an overview into Teaming, it is a topic I feel is of great importance and benefit to small businesses in any industry.