• Demonstrate the importance of your service or product to the prime contractor. Subcontractors with hard to replace subject matter experts, like electricians or database programmers, are in a stronger negotiating position than general staffing or call center providers.
• Establish strong relationships with the government buyer and the prime contractor. It is usually easier to negotiate when you have an established relationship with the government’s key manager. Now is also the when it makes a real difference during tense negotiations for your company executive to have a pre-existing relationship with the prime contractor’s responsible executive.
• Try to team with ethical, fair and trustworthy companies. For instance, some companies have very principled contracting practices but have a few rotten management apples. Or, you might have a well-intentioned prime contractor manager who is being pressured by senior management to put the squeeze on or squeeze you out. While I’ve seen many mutually beneficial teaming relationships, I’ve also had too many clients who were left at the negotiating altar because the only reason the prime selected them for the team was to win the contract with no intention of following through.
• Document teaming discussions. Is it the individual you negotiated the teaming agreement with or someone else in the prime contractor’s material department? I strongly recommend documenting any teaming discussions and agreements in formal emails that you send after the fact to your prime contractor counterpart. These become very valuable sources of information when there are disagreements about the meaning of teaming agreement language.
• Avoid shotgun weddings. Which is to say, buyer beware! For many years, I assumed that other people I did business with took their commitments as seriously as I did. Unfortunately, this wasn’t always the case. So, the success of the subcontract negotiation process often reflects the specificity and honesty of the teaming process. Basically, there is no reason to believe that a company that refuses to be definitive in a teaming agreement will be any fairer when negotiating a subcontract. My hard learned rule of thumb is that in the case of reluctant suitors, the sooner you walk away, the better!