Partnering with other Vendors
There are several opportunities for teaming within the federal marketplace. Teaming is when two or more companies join together to work as a prime or where one works underneath the other as a subcontractor.
When teaming, companies can join a partnership together. These are normally called Joint Ventures. A Joint Venture (JV) is a completely new company and is required to have a SAM registration specifically for the new entity. If two small business concerns join together to form a JV, there are some policies in place that they must follow to stay as small when bidding on contracts.
What is Subcontracting?
Government contracting can prove to be an excellent vehicle for growth for many struggling businesses. However, for some small businesses or inexperienced vendors, prime contracting may be difficult. Either due to the scope of the contracts or the business’s inability to meet the demands of the contract upfront.
Being a prime contractor may not be the best option for all small businesses whether this is due to a lack of materials, capital, or staff.
This does not mean these firms should be excluded from participating in these opportunities. Several potential vendors join onto contracts as subcontractors instead.
Subcontracting allows businesses to gain experience and build a reputation without having to take all the burden on their shoulders. It also allows small businesses the chance to successfully perform on contracts they were not able to do alone.
Vendors awarded federal contracts over the simplified acquisition threshold must agree to use small business concerns. This is due to FAR 19.702 which is normally written as requiring a small business subcontracting plan, defined inside FAR 52.219-9.
The regulations surrounding subcontractors are not as stringent as they are on prime contractors. This is mainly because the prime takes on the responsibility for the contract since they are the ones who have signed.