Becoming a Premier Subcontractor

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Becoming a Premier SubcontractorThomas Marcinko | September 1, 2016

http://blogs.aronsonllc.com/fedpoint/

2© 2016 | www.aronsonllc.com | www.aronsonllc.com/blogs |

Agenda

• Advantages of being a Subcontractor• Reality Checks• Regulatory Requirements• Teaming Agreements• Mentor – Protégé• Practical Tips– Things to avoid– Things to do

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Advantages of being a Subcontractor

• Revenue & profit• Participate in large contracts• Exposed to less risks• Corporate experience• Past performance references (informal)• Somebody has to do it







Reality Check # 1

• What do the Iditarod race sled dogs and Government contractors have in common?







Reality Check # 2

• Large contractors subcontract to small businesses because they have to not because they need to!







Regulatory Requirements

FAR 52.219-8 Utilization of Small Business Concerns• Required in all contracts > $150,000 (Unless performed outside of

US)• Prime contractor must give SBs – maximum practicable opportunity to participate as subcontractors – to the fullest extent consistent with efficient contract

performance.








FAR 52.219-9 Small Business Subcontracting Plan

Required in all contracts that• Awarded to OTS businesses• Offer further subcontracting opportunities &• Exceeds $700K ($1.5M for construction)









Pursuant to this clause the prime contractor must • Establish goals for subcontracting with small businesses– SB, VOSB, SDVOSB, HUBZoneSB, SDB, & WOSB– Expressed as a percentage of subcontracting dollars

• Take various “affirmative action” type steps to meet those goals• Periodically file reports documenting whether the goals are being

met and if not, why not









How are the goals established? • Original intent– Bidders set goals aligned with their technical approach

• Current Practice– Goals included in RFP









Enforcement• Liquidated Damages (52.219-16)– Not for failing to meet the goals– Willful and intentional failure to follow the plan– LDs equal dollar goals not met

• Poor Past Performance









New regulations strengthen clause• Goals can be expressed as a percent of contract value• Primes have to notify the Contracting Officer if they are not using a

subcontractor to the extent the sub participated in the proposal







Teaming Agreements

Good fences make good neighbors• Agreements to agree are not enforceable• Negotiate when you have leverage• SBs should pay close attention to– The prime’s reputation– Work share– Termination– Labor rates







Mentor Protégé Agreements

A more comprehensive arrangement than a teaming agreement• Written and government approved mentor-protégé agreement • Mentor provides assistance to protégé in areas such as– Business Development– Policies and Procedures– Business Systems– Certifications– Subcontracts / Past Performance







Mentor Protégé Agreements

What’s in it for the mentor?• Customer Requirement• Sole source subcontracts• Joint ventures without affiliation







How to become a Premier Subcontractor

Understand what motivates prime contractors• The only true mission statement:








Understand what motivates prime contractors• The only true mission statement:• Provide owner(s) with a rate of return on their investment better than

they can receive by investing their resources elsewhere. We do this by – Winning business &– Performing the business we win profitably.

• A preferred subcontractor will support one or both of these missions








Things not to do • Don’t depend on your small business status • Be more than just staff augmentation • Don’t be all things to all people, develop a niche







How to become a “Preferred Subcontractor”

Deal with the decision makers • Small Business Subcontractor Fairs are not productive

– Bidders list only work for commodities• Business Development Professionals make the decisions

– You find them– They find you








Be a good prime contractor• Corporate experience• Past performance references• Relationships with key agency executives








Other attributes of preferred subcontractors • Competitive prices • Strategic hires • Quid pro quo, you let us bid with you, we will let you bid with us. • Help with the proposal • Handle staffing surges • Ethical • Adequate business systems, especially accounting







About Aronson LLC

• Thinking ahead for clients for more than 50 years• 225+ professionals located in Rockville, MD• 80+ professionals dedicated to supporting government contractors • Aronson helps clients rethink the way they approach their business

through innovative, industry-specific services and advice:– Assurance and Tax– Deltek Systems and Outsourcing– Financial and Contract Compliance– GSA Schedules

• www.aronsonllc.com/blogs/fedpoint/ – News and trends and insight for today’s savvy government contractor



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Awards / Accolades / Affiliations

The Gazette of Politics & Business Exceptional 53 Business Award In 2012, Aronson received the PB53 award for the third year in a row. The program acknowledges the top businesses and organizations in Maryland based on criteria that includes the company’s annual revenue, employee growth, noteworthy product or service innovations, community service efforts and more.

Accounting Today Top Firm In 2013, Aronson was once again named to Accounting Today’s list of the top 100 firms in the country. Accounting Today is a leading provider of online business news for the tax and accounting community.

Washington Business Journal Top 25 Aronson is ranked #12 on the Washington Business Journal’s Top 25 Accounting Firms in the DC Metropolitan area.

INSIDE Public Accounting Top 100 Once again, Aronson has earned a spot in the top 100 of this prestigious list, released by INSIDE Public Accounting. This is the longest running, most comprehensive and accurate independent analysis focusing on management and operations of America’s large local, regional and national firms.

Washington Business Journal Best Places to Work Aronson has been recognized five times as one of the Metro area’s “Best Places to Work.” The award recognizes a company’s achievements in creating a positive work environment that attracts and retains employees through a combination of employee satisfaction, working conditions and company culture.

Montgomery County Chamber Corporate Social Responsibility AwardIn 2010, Aronson was honored to receive the MCCC’s Corporate Social Responsibility Award based on the depth and breadth of the company’s energetic commitment to support young people, in the areas of education, housing and health.







Tom Marcinko is a principal consultant in Aronson's Government Contract Services Group. He is responsible for providing clients with a broad variety of both pre- and post-award support. With over 30 years of government contracting experience, he specializes in proposal development, contract and subcontract administration, FAR compliance, small business programs, and government audits.Tom is a featured speaker at Aronson events and a frequent guest speaker for numerous organizations, including the GWSCPA, VSCPA, the Northern Virginia Technology Council, the Washington Board of Trade and the NCMA. Tom presents training classes on a variety of subjects, including several courses in the fundamentals of government contracting for the University of Virginia's government contracting certificate program. He has also written articles on government contracting for the NCMA Contract Management magazine and other periodicals.Tom earned his bachelor's degree in accounting from the University of Central Florida and his law degree from the University of Florida. He is a member of the Florida Bar and the National Contract Management Association (NCMA).

Principal Consultant, Government Contract Services Group

301.231.6237

[email protected]

Thomas A. Marcinko







301.231.6237

Contact Thomas Marcinko / Aronson LLC

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Becoming a Premier Subcontractor

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