Summary
Highlights
Middleman contracting involves finding an opportunity, subcontracting the work, and keeping the profit. Many struggle due to emotional responses to setbacks like vendors not providing quotes. The core issue is whether the work can actually be won. Factors to consider include existing incumbents, their contract amounts, and whether the opportunity is genuinely attainable.
Successfully winning contracts requires knowing if an incumbent exists, their contract details (found on fpds.gov, USA Spending, or SAM.gov). The speaker advises against opportunities requiring site visits due to added complexity, but notes that if required, getting detailed information is crucial. Regardless of whether it's products or services, understanding costs, expenses (including taxes, shipping, payroll), and profit margins is paramount. Credit history can also play a role in securing funding from distributors.
Understanding federal fiscal years is vital, with Quarter 4 (July-September) often presenting more opportunities due to agencies spending remaining budgets. When relying heavily on subcontractors, it's important to question their pricing to ensure fair margins and avoid being outbid. Getting multiple quotes and understanding profit margins of subcontractors is key.
Knowing the evaluation criteria (lowest price, resume-based, technical, or past performance) is critical. Assuming that subcontracting work, adding profit, and getting paid will suffice leads to problems. Past performance can often be from subcontractors, but always clarify. It's crucial not to assume any details and to ask questions to confirm requirements.
Crucial conversations about payment terms (e.g., 30 days after being paid) and all included fees must happen with subcontractors to avoid surprises. As the prime contractor, you are the boss and are responsible for customer service and project management. This includes handling issues like damaged goods or staffing problems, emphasizing that the win should be a blessing, not a burden.
Proper paperwork is essential when working with subcontractors. This includes non-disclosure agreements (NDAs), subcontract agreements specifying terms and payment methods (e.g., bill.com), and purchase orders. Additionally, implementing a physical sign-off process ensures that the government acknowledges successful delivery or completion, protecting you from future disputes.
Success in government contracting involves continuous learning, applying knowledge, and adjusting strategies. Over-communication with the agency post-award is crucial, including kickoff calls, progress updates, and delivery schedules to prevent contract terminations or non-renewal. Finally, always confirm the payment process with the agency, including systems used and preferred invoice formats, to ensure timely compensation.