Variety is the spice of life, right? Whether it’s cutting and cooking a steak or choosing more than one dessert, people like to have options.
Federal contracting officers are no different. They also enjoy a variety of choices. This is becoming increasingly difficult for them.
With major arms contractors consolidating from 51 in the 1990s to five in 2022, the number of options available to government customers has steadily declined over the past 30 years. To stand out in today’s competitive landscape, premium companies must ask how they can provide their government customers with more options through the contract vehicles they already own.
One approach – build a robust and diverse small business line to offer your government customers affordable options.
The benefits to large mainstream companies of supporting small supplier and partner networks for aggregation are five-fold:
Lower perceived risk: If the pandemic has taught us anything, it’s that a single point of failure, as the sole supplier of a critical component, is a significant risk that can cause a catastrophic system failure.
In a federal contracting environment, suppliers with single points of failure in their supply chains are at higher risk of delays and cost overruns than those with diversified supply chains of healthy small businesses. If the goal is to maintain a high degree of availability and reliability, having a robust supply chain helps ensure this and reduces perceived risk in the eyes of the customer.
The best target solution: Small businesses have the unique advantage of being able to change quickly and provide flexible and responsive development processes that truly adapt to changing edge requirements. They often provide a niche or specialized product not yet offered by the major system integrators.
Offering a small/large business pairing can provide greater value and allow the main business and their client to access cutting-edge technology as a faster alternative to in-house development.
Access to new markets: The first contract is the hardest to win. This is no different for large prime numbers. When considering a new market entry, large premium companies can approach their small business counterparts with existing contracts or other agency positions of interest.
Allowing small businesses to bid separately limits competition further and allows the prime contractor, as a subcontractor, to get a piece of the pie that would otherwise be limited. After all, the customer gets additional options from the small prime.
New technology integration: Large premium companies with diverse supply chains to agile small businesses are significantly more likely to be aware of emerging technologies and keep interoperability in mind as they develop and maintain their large platforms. Small businesses can quickly integrate the technology.
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. This in turn creates and preserves jobs.
Mentor firms have incentives to maintain more sustainable supply chains and meet subcontractor goals. They may be reimbursed for certain participation costs.
Maintaining a robust and diverse portfolio of small business partners gives your government client more options and increases your chances of winning across the board.
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Information about the author
Chelsea Meggitt , CEO of Collaborative Compositions, has an MBA from the University of Washington and is a business strategist and government contracting consultant with more than a decade in the industry. She works with small and medium-sized businesses to launch and grow their government contracting business and has a knack for identifying the path of least resistance to government contracting success.