getting picky: how to team (and how not to team) in today’s marketplace
TRANSCRIPT
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Getting Picky: How to Team (and How NOT to Team) in Today’s Marketplace
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APMP BID & PROPOSAL CON 2015 | PAGE 2
Getting PickyHOW TO TEAM AND HOW NOT TO TEAM IN TODAY’S MARKETPLACE
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Introductions
Sander Wilson, CFCM, CF APMPManager, Business Operations for LVW Electronics
Professional Highlights:- Capture of multiple Federal IDIQ/MATOC Awards with combined ceilings of
over $1B- Task/Delivery Order awards ranging from $500K to $11M, working in locations
all over the CONUS, Korea, Japan, Hawaii and Alaska- Team building from the simple (prime/key sub) to very complex
(prime/dozens of subs/suppliers with key specialties)
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1. Into the woodshed – the basics2. Why we team3. How to team4. When to team5. Enforceability6. What’s the worst that could happen? 7. Questions / Discussion
Agenda
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What You’ll Learn
Common business practices regarding teaming arrangements Why teaming is a critical business development and capture
management skill Why relationships matter more than words How to think critically about WHY you want to team up, HOW
to approach it, and WHAT your firm will get from the deal.
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Why Team? – Case Study: Hoover Dam
Boulder Dam Project $50M procurement
(roughly $700M today) 107 potential bidders 3 substantive proposals
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Why Team? – Case Study: Hoover Dam
The Winning Team (the “Big Six”) – in 1931 Henry J. Kaiser Co. Bechtel Co. MacDonald and Kahn Utah Construction Company Morrison-Knudsen Pacific Bridge Company J.F. Shea
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Why Team? – Case Study: Hoover Dam
The Winning Team (the “Big Six”) – today Kaiser-Permanente Bechtel Co. BHP Billiton / Fluor URS J.F. Shea
None of these companies could have built the Hoover Dam alone.
None of them would be where they are now if they hadn’t teamed up in the first place.
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“The Process”
Dating NDAs Memos / Emails / Phone calls
Engagement TAs Proposals / Quotes / ROMs
Marriage Subcontract / Purchase Order
Think of a Teaming Agreement as a prenuptial agreement, but with fewer teeth
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What’s an NDA?
Before you sign up to a one-sided condition, it’s always fair to ask the other side to make it mutual. Share the pain.
Non-Disclosure Agreement Agreement to not share something
that you ought not to in the first place Mostly boilerplate Mutuality is key! Not a complete defense against
intellectual property infringement
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What’s a TA?
Teaming Agreement Agreement to agree May (or may not) be enforceable Typically consists of:
A boiler-plate agreement to work together to capture the work
An exhibit or attachment that defines the work share, if the contract is won
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What’s a Subcontract?
Subcontract Enforceable instrument detailing a legal relationship between two (or
more) parties. Consists of some scope of work / product to be delivered for some
consideration. Consummates the TA in an enforceable, clearly-defined and mutually-
agreeable contracting arrangement.*
ALL subcontracts are negotiable.
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• What does the Government think of teaming?• FAR 9.6• Recognizes the “integrity and validity” of
the teaming arrangement• Teaming may provide the Government the
“best combination of performance, cost, and delivery for the system or product being acquired”• Does not confer enforceability
Government Contracting and Teaming
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• Hot button issues: – Does the prime overly rely on the sub?– Does this team reduce risk or does it increase it? – Will the team fall apart over disputes stemming from:
• Conflict of interest? • Payment/Debts/Liens/Claims?• Patents? Intellectual Property?
Government Contracting and Teaming
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What’s Important Now?
Why do we team? Pursuit of more and greater opportunities Marketing Tactical advantages Strategic goals …. Just because we can?
There are many reasons to team up. The best is the simplest of all: to WIN.
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Strategic Alliances
Key to long term growth Mentor / Protégé Arrangements Incubators Joint Ventures
Dove-tailing Matching your strengths with their weaknesses Limits cross-pollination (i.e., training your competition)
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Tactical Considerations
Exclusivity Primes want it both ways Subs want it both ways, too…
Taking competition off the streetFilling an immediate gap/weaknessAccentuating an existing strength
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How It’s Done – Dating
Networking – industry days, prof. orgs., on-lineCalls, calls, callsIntelligence
know your market know your customer Know your enemy
Emails are not your friend.
CALL FIRST. WRITE LAST.
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How It’s Done – Engagement
Negotiating a TA Workshare Commitment
Skin in the Game Proposal Support Bondability Market position Intelligence
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Work Share
#1 Source of disagreementUsually found in Exhibit/Attachment ASamples:
“To be determined at task order award.” “Commensurate with the teammate’s skills and abilities at time
of award.” “No more than 40% of the total prime contract value” “At least 40% of the total contract value”
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Commitment
• Can vary greatly, whether in written form (in the TA) or in spirit
• Critical to good teaming• Puts skin in the game
Forms of commitment:• Time• Labor• Past Performance• Technical Ability• Cash• Bondability
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How It’s Done – Marriage
Relationship, relationship, relationshipWorkshare => Statement of WorkEverybody wins together, OREverybody loses together
“There never was a good knife made of bad steel.”
- Ben Franklin
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When to Team
Best • Strategic• Tactical• Repeatable
Better• Strategic• Tactical
OK• Tactical
Opportunity ID Capture Proposal Response
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Enforceability
• Don’t assume it’s enforceable – because it probably won’t be… – See Cyberlock Consulting, Inc. v. Info. Experts,
Inc., 2013 U.S. Dist. LEXIS 49092 (E.D. Va. Apr. 3, 2013) – upheld by 4th Circuit Court of Appeals Jan 2014 –
• An agreement to agree• NOT a contract
Teaming arrangements
succeed due to the spirit of the agreement, not
the letter.
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Enforceability
• How do you give a TA teeth? –Well-defined work-share
• % of work, labor categories, number of positions, specific scope, CLINS, etc.
–Penalties for failing to live up to the agreement–Well-defined commitments / compensation for teaming
• e.g., Parties will subcontract upon award–Exclusivity
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What’s the Worst That Could Happen?
• LITIGATION, LITIGATION, LITIGATION• Organizational Conflict of Interest• Ostensible Subcontractor Rule• Directed / Rejected Subcontracting • You train a competitor• You lose control• …and of course, there’s the risk that you’ll simply LOSE.
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The Point
• Good teaming is like a good marriage• Teams that win together tend to keep winning• Good teams grow business for the whole team• Great teams maximize performance and
minimize risk
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Questions
Items for discussion: When might it be a bad idea to team? How do you know if you’re a good fit with a team mate? How do you know when it would be good to team? How do you quantify the benefit of teaming?
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Sander WilsonManager, Business OperationsLVW Electronics(719) 314-2854 [email protected] www.LVW.com
Contact Us
APMPPO Box 77272Washington, DC20013-7272 Phone: +1 - (202) 450-2549www.apmp.org