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Why Tech Companies Should Care about Subcontracting

July 24, 2020 / marybeth.fiedler

It’s no secret that subcontracting to a prime contractor is a proven way for small businesses to get federal work, but as an emerging tech company, you might not think of subcontracting as a major part of your go-to-market strategy.

Subcontracting is mutually beneficial — partners can be too large or too broad to laser focus on a product, and commercial tech can provide the most innovative and cutting edge solutions. For tech companies new to the federal space, a subcontracting or teaming agreement adds credibility, and can significantly reduce lead time in some circumstances. With the right partner, subcontracting can be the kindling you need to light a fire under your go-to-market strategy.

Dcode works with large federal systems integrators like Deloitte, cloud service providers like AWS, and mid-size or smaller firms like Octo Consulting and has seen dozens of alumni companies awarded contracts through partnerships. While there are innovative procurement methods like Other Transaction Authorities (OTAs) and Small Business Innovation Research (SBIR) grants that we’ve seen our alumni companies have great success with, we want to make sure the tech companies we work with find success as fast as possible. Opportunities like these to team or partner with major primes can be just as fast and offer a similar likelihood for success in the federal market.

To stack the deck in your favor, think of different routes into the federal market. After all, the procurement process isn’t one-size fit all. In addition to any direct government sales, consider how subcontracting with partners can put you on an accelerated path to success.

Subcontracting begins with a teaming agreement, or a contract with the potential prime contractor and a subcontractor that allows you to define the scope of work for each party. Once the teaming agreement is in place, the following subcontracting agreements will further define the particular opportunities under the vehicle that the teaming agreement covers.

Finding a complementary prime partner to subcontract with is key to leveraging your tech within the broader scope. If done correctly, subcontracting allows you to pool resources with a larger contractor in order to compete for a contract that may otherwise be out of reach.

Over 100,000 prime contractors win business with the federal government each year. Many of those have allocations like small-business set asides that your company can take advantage of. In 2018, over $120 billion went to small business primes.

To find the contracting opportunities that are right for you, research vendors with subcontracting opportunities, browse through the SBA Subcontracting Network, or use the DoD Prime Contractor Directory to identify potential subcontracting opportunities.

Reach out to Dcode to demystify subcontracting and learn about prime contractors that you should be working with.

Want to partner with emerging tech to drive success for your federal clients? Check out our portfolio of alumni companies and learn more