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Wyoming Business Tips for May 15-21

May 6, 2016

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By Andrea Lewis, Wyoming Entrepreneur Procurement Technical Assistance Center (PTAC) procurement specialist.

“I’m interested in selling to the federal government. Any tips for getting started?” John, Burns

Depending on the type of work you offer and where your business is located, subcontracting might be a good way to get started in federal contracting. It has several advantages over being a “prime” -- being the company legally responsible for the contract.

Advantages include diversifying your market and learning what is involved with government contracting without being responsible for managing the contract. There is less financial risk, as the prime deals with the financial, legal, technical and managerial aspects of managing a government contract. It’s not that the subcontractor will have no responsibility or assumption of risk -- that will be outlined in the legal subcontracting agreement with the prime.

Develop a solid relationship with a prime. This can lead to your company being offered consistent work. Offer a broad range of services or products to the prime, so you do not limit your opportunities with it. However, be careful not to sell your company as a one-stop shop. Stick to your core competencies.

When primes review potential subcontractors, they look at how your company’s people and capabilities fit into the prime’s offerings, and if your company has existing relationships with government customers. Do you really understand the prime’s line of business and customers? They will want to see excellent past performance, a strong work ethic and a company culture that is compatible with theirs.

Your company’s small business status (woman owned, veteran owned, HUBZone, etc.) is not as important as your capabilities and the value your business brings to a project.

Drawbacks to being a subcontractor can include the fact that less risk usually means less profit, and you don’t necessarily grow good relationships with government agencies by being a subcontractor. Your pricing can be controlled by the prime, and you are dependent upon the company for scheduling work.

Subcontracting offers a way for a small business to diversify its business and acquire past performance, all while keeping the business development costs down and risk level low. Finding the right primes to partner with is key. It isn’t a good idea to work with more than a few.

Keeping up on prime-subcontractor relationships is time consuming, and too many would be hard to manage. If desired, subcontracting can lead to your company one day tackling a contract on your own as a prime.

For more information about subcontracting, contact the Wyoming PTAC at (307) 772-7372.

A blog version of this article and an opportunity to post comments is available at http://www.wyen.biz/blog1/.

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu, or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.


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