Getting Picky: How to Team (and How NOT to Team) in Today’s Marketplace.

Getting Picky: How to Team (and How NOT to Team) in Today’s Marketplace

APMP BID & PROPOSAL CON 2015 | PAGE 2

Getting PickyHOW TO TEAM AND HOW NOT TO TEAM IN TODAY’S MARKETPLACE


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)


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


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.


Why Team? – Case Study: Hoover Dam

Boulder Dam Project $50M procurement

(roughly $700M today) 107 potential bidders 3 substantive proposals



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



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.


“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


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


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


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.

• 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

• 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


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.


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)


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


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.


How It’s Done – Engagement

Negotiating a TA Workshare Commitment

Skin in the Game Proposal Support Bondability Market position Intelligence


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”

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


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


When to Team

Best • Strategic• Tactical• Repeatable

Better• Strategic• Tactical

OK• Tactical

Opportunity ID Capture Proposal Response

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.

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

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.

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


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?


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

Getting Picky: How to Team (and How NOT to Team) in Today’s Marketplace.

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