The Power of Partnerships

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April 29, 2014

A Bloomberg Government study reports that U.S. contract spending fell 3.1 percent in 2013 – the largest one-year decline since 1997 – with sequestration, government shutdowns, drawdown of military operations in Afghanistan and OMB spending reduction policies all playing a role. In a business climate like this, with spending at its lowest point in the past seven years and down three out of the last four years, contractors need to be smarter about how they compete and always stay focused on government needs and outcomes. These significant challenges in the current government contracting marketplace offer opportunities for both large and small contractors to combine their talents to form creative partnering teams.

A challenging marketplace creates the impetus for innovation. As contractors look for ways to thrive amid a tough new fiscal reality, the partnering of large and small businesses can be an extremely effective way for both industry and government to find success.

Why Form Partnerships?

Fierce competition for budget dollars means that pursuing opportunities with the strongest team possible is more important than ever. As a large contractor, MAXIMUS knows the strengths we bring to a contract bid. But, we are also aware that there are sometimes requirements or areas of expertise where we need to leverage other firms. By partnering with small businesses we can often create the perfect team for winning new contracts. In addition, the federal government has minimum and targeted small business and socioeconomic subcontracting goals in many of its procurements. By establishing strong partnerships with a variety of small businesses we are able to meet and exceed these government subcontracting requirements and create powerful teams to deliver outstanding, measurable results for citizens being served by government programs.

As MAXIMUS looks to expand beyond our historical focus on health and human services programs, such as Medicare appeals processing and health insurance exchange contact centers, we see natural synergies for expanding into other citizen-centric areas such as the census, immigration reform and student loan management. To help bridge into adjacent markets, we look for small business partners who can demonstrate successful past performance for these agencies and can bring their expertise and and understanding of the agencies’ culture and goals to help pursue new contracts. Additionally, small businesses might want to be involved in multimillion-dollar contracts with these agencies and have excellent capabilities to execute and succeed with their part of an overall team, but because they are too small to be the prime, they look to larger contractors to bring them on board.

How to Partner Effectively

Once two companies have decided to form a strategic bidding partnership, it is critically important that each party understands the full scope of the contract they are partnering on and who will take responsibility and accountability for each portion of the tasks within that scope. Proactive, open and trusted communications about expectations, roles and responsibilities at the beginning and throughout the life of the contract will make the relationship more effective. It will also ensure that each partner is accountable and will help avoid confusion as contract implementation proceeds.

Partnering is a two-way street that can bring benefits to both partners in unexpected ways. For example, when a small, woman-owned, 8(a) certified company reached out to MAXIMUS about potential partnership opportunities, we quickly identified synergies and included them in discussions for a new procurement that called for the type of specialized training services they offer. Shortly thereafter, our new partner asked MAXIMUS to provide staff for a portion of work within a small business set-aside, and we joined them as a partner. Both companies were awarded contracts and our teaming has allowed both companies to expand upon core capabilities into adjacent and complimentary service areas.

Large Company and Small Company Roles

As with all of our work, we highly recommend focusing first and foremost on the customer’s mission and the outcomes. Small businesses that approach teaming with larger companies should be able to demonstrate that they understand the customer needs and are aligned to help the prime and the customer achieve their desired outcomes. Socioeconomic or small business status is not enough without customer awareness and commitment. The small business should explain a clear value proposition as it pertains to matching and meeting defined customer needs, and then demonstrate how they will help the prime contractor deliver improved customer outcomes.

Core competencies and moving into new market areas can often be enhanced through collaboration with specialized small business partners. Identifying which specializations and which small contractors to partner with can be a key to successful new contract awards – followed by successful contract performance. Identifying and developing mutually beneficial partnerships with small businesses with diverse socioeconomic backgrounds enables MAXIMUS to fulfill our primary mission of Helping Government Serve the People®.