Teaming

Teaming with other businesses can help companies fill competency gaps and increase their win probability. To succeed, however, recruitment and management of teaming partners must be approached with care.

Introduction

The larger and more complex a contract opportunity, the more likely it is that prime bidders (especially small businesses) will need to form teams of multiple companies to provide the resources and solutions required in an RFP.

However, there is a complicated, delicate balance of strategy and tactics required to assemble a winning team. While an effective teaming strategy can significantly improve a bidder’s win probability, a poorly executed strategy can create serious performance, reputation, legal, and financial problems.

Best Practices

1. Determine objectively whether teaming is needed to strengthen a win strategy or a competitive position.

During the opportunity/capture assessment phase of business development, potential bidders collect and analyze information about a customer’s requirements for a targeted opportunity and about competitors likely to bid on the procurement. Adequate collection of this intelligence leads to the development of preliminary win strategies, solution approaches, and price-to-win estimates. This leads to the generation of a list of required resources (e.g., personnel, facilities, and equipment) and capabilities (e.g., staff skills, technologies, and problem solutions) that are needed to win.

At this stage, potential bidders should conduct a rigorous and honest self-assessment to identify gaps and deficiencies in their in-house resources and capabilities. For large and complex opportunities, many companies likely lack some resources or capabilities, especially when compared to competitors’ and customers’ expectations. Conduct, as best you can, an assessment of likely competitors’ resources, capabilities, potential solutions; consider these from the perspective of a solo bidder, a team prime contractor, and as a team subcontractor under another prime contractor. Honestly assess your company’s strengths and weaknesses against the customer’s requirements, preferences, and expectations—and compare them with those of likely competitors. Compile the results in a tabular array such as the solution worksheet shown in Figure 1.

Customer Issue/Hot Button CORRESPONDING REQUIREMENTS LIKELY COMPETITORS’ SOLUTIONS OUR SOLUTION RELEVANT DISCRIMINATOR GAPS IN SOLUTION ACTION REQUIRED TO MITIGATE GAPS

Figure 1. Use this template worksheet to assess your company’s relative competitiveness. This will help you identify potential teaming candidates that would neutralize your weaknesses and improve your organization’s competitiveness and win probability.

Use this tool to assess your company’s relative competitiveness as a solo bidder, as a team prime contractor, and as a team subcontractor under another prime contractor. Honestly assessing your company’s strengths and weaknesses against the customer’s requirements, preferences, and expectations—and comparing them with those of likely competitors—helps you identify potential teaming candidates that would neutralize your weaknesses and improve your firm’s competitiveness and win probability.

At this time, generating corporate management support for teaming scenarios is important. If you determine that your firm is not as competitive as a prime contractor versus as a team subcontractor, senior management members are less likely to support the bid effort. Similarly, they might not embrace the dilution of revenue and profit that a multicompany team offers.

You must convince them that teaming would significantly increase the win probability. After all, a smaller percentage of something is better than 100 percent of nothing.

2. Identify, evaluate, select, and recruit teaming partners.

Select teaming partners primarily on their ability to increase win probability and secondarily on their ability to work cohesively with the team and customer under the conditions of the proposed contract. Many factors may be considered within these two selection criteria, but evaluation of potential teaming partners should not stray from these key measures.

Potential teaming candidates can be identified from market intelligence collected in the following areas:

  • Incumbent contractor(s)
  • Likely competitors for the targeted procurement
  • Other contractors known by the customer
  • Other players in key technology, capability, or geographic markets

Companies often enter into strategic partnerships with other companies to leverage complementary resources, capabilities, and market positions. While these partnerships increase competitiveness, they do not always survive a critical teaming analysis. Companies may also decide to team with a firm “because we always team with them.”

If you want to be successful, however, you should base your teaming decisions on more than these criteria. Choose only companies that can increase your win probability and are able to work cohesively with the team and the customer under the proposed contract.

Fill out a bidder comparison matrix. Use data to identify an optimum mix of teaming candidates that strengthen your weaknesses and improve your score based on expected evaluation criteria. Prioritize the list of potential teaming candidates based on their importance to the team, their impact on win probability, and your perception of how well they would work with the team and the customer.

If you have a working relationship with a potential teaming partner, choose the most appropriate point of contact and call him or her for exploratory discussions about the possible contract. You should discuss the teaming partner’s knowledge of the customer, target contract, and likely competitors, as well as his or her willingness to consider a teaming arrangement.

If you don’t have a relationship with the company, then reach out on a peer-to-peer basis (e.g., business development, C-level, operations) to have the same discussion. While you will likely have to share some of your own intelligence with potential competitors to gain their intelligence, this “game” can be productive and mutually beneficial if played skillfully. It is important to record progress, so consider using a table like the one shown in Figure 2.

TEAM MEMBER CANDIDATE OR COMMITTED RATIONALE FOR INCLUSION ON THE TEAM

Figure 2. Record the results of your discussions in a table and update the list of interested potential teaming partners. Performing due diligence on potential teaming partners is critical. A company may look good on paper, but it could be a serious liability if the customer has a negative opinion about that company.

Performing due diligence on potential teaming partners is critical. A company may look good on paper, but it could be a serious liability if the customer has a negative opinion about that company. Use personal and professional contacts in the customer’s organization, industry, and local community to build a perception of the firm. Conduct market research (e.g., Google, D&B, industry publications) to gauge the company’s performance and reputation. Make sure that each company will be an asset, not a liability, before you invite it to join your team.

When you have identified and vetted the best potential team members, you must invite and convince each to join the team, in order of priority. Contact the most appropriate decisionmaker (or decision influencer) and explain the rationale for having his or her company on the team, its proposed role in the upcoming contract, and its responsibilities during the opportunity and proposal phases. Avoid detailed discussions of win strategies until the firm has committed to joining the team and signed a non-disclosure agreement (NDA).

Before you launch into the invitation discussion, asking if the company is already committed to another team is wise. If so, you can avoid providing “free” competitive intelligence without receiving any in return.

3. Select the most appropriate team structure.

When you have successfully recruited the key companies on the team (or beforehand if possible), determine which teaming structure will be the most competitive. Consider many factors in making this selection, such as:

  • Which team structure is the customer most comfortable with?
  • Which structure will make the most sense to the customer?
  • Does one structure neutralize or overcome weaknesses of the prime contractor?
  • Does one structure enable operational efficiencies?
  • Does one structure enable cost reductions?
  • Does one structure offer any other competitive advantages?

Team structures can vary depending on the contract vehicle, size, complexity, type of service or product provided, and other factors. The most common team structures include:

  • Traditional prime/subteam. A prime contractor supported by team subcontractors identified as such in the proposal. In the U.S. federal government market, a prime contractor may assign any work to any team subcontractors without competition or formal approval by the Contracting Officer.
  • Joint venture team. Two or more companies form a new legal entity (a joint venture, or JV) that is usually dedicated to bid and perform the targeted contract. The JV functions as a prime contractor and may or may not have team subcontractors. The JV offers the combined assets, capabilities, and experience of the member companies in the form of a single company.
  • Partner arrangement. This is when each organization has a separate contractual arrangement with the customer
  • prime contractor with subcontractor pools. Calling this a “team” is a bit of a stretch. The prime contractor identifies numerous subcontractors that might perform various portions of the contract. The prime contractor then competitively awards subcontracts for specific products/services after the primary contract is awarded.
  • Mentor-protégé arrangements. These are formal relationships between large and small businesses set up to achieve small business subcontracting goals. These arrangements are common in the U.S. federal market and are becoming more common in the B2B market. Regardless of whether the mentor or the protégé bid as the prime contractor, or if the firms form a JV, each may subcontract work to the other without formal approval by a Contracting Officer.
  • Company-specific versus integrated project teams. This is a service delivery or project management choice. When you have a multicompany team, you should decide whether you will subcontract complete, projectized scopes of work to a single company who would perform the entire subproject with its own employees, or if you will form project teams made of employees from multiple companies who agree to follow the direction of a single Project Manager. Each approach has pros and cons and should be selected and “sold” carefully to the customer.

4. Negotiate and document effective teaming agreements and subcontracts.

A common mistake is to form a team and submit a proposal without properly and thoroughly documenting the operational, financial, and legal aspects of the negotiated arrangement.

The terms and conditions of the teaming and subcontracting arrangements must be mutually acceptable to both the prime contractor and subcontractor. They also must be acceptable to the customer if it has any visibility into or approval authority over the arrangement. If there are multiple team subcontractors or members of a JV, then terms and conditions must be coordinated and cohesive across all relationships. Needless to say, negotiations can be complex and sensitive.

Teaming agreements should be negotiated by officials with decisionmaking authority, reviewed and approved by Corporate Legal Specialists, and signed and executed before proceeding too far into the opportunity and proposal phases, if possible.

Keep in mind that teams can break up before a proposal is submitted. The legal, financial, and competitive consequences can be significant if appropriate responsibilities and restrictions are not clearly specified in a teaming agreement.

Teaming agreements should include:

  • Clearly defined scopes of work, product or service specifications, and targeted percentages of work volume or value (if appropriate)
  • Clearly delineated types and levels of participation in opportunity and proposal activities
  • Specified allocation or sharing of opportunity and proposal costs (often limited to third-party expenditures as opposed to in-house costs)
  • Legally binding confidentiality agreements, clauses requiring exclusivity of bidding/teaming on the targeted procurement, and clauses specifying the allowable reasons for and legal procedures, cost reconciliation, and limitations on future ability to bid on the targeted procurement should a member wish to terminate its participation before award of the targeted contract

5. Optimize and strengthen the competitiveness of the team.

Form your team early in the opportunity/capture process as gaps are identified, preferably before the RFP is issued. When a team has been formed, be sure to leverage the new strengths offered. Package and use strengths effectively to maximize the team’s competitiveness and win probability. For example:

  • Leverage skills from across the team. Take the time to inventory, characterize, and use key personnel, subject matter experts (SME), customer contacts, and Opportunity/Capture/Bid/Proposal Specialists from across the entire team during the opportunity/capture and proposal phases. You might discover valuable hidden assets, and you shouldn’t miss the opportunity to use them effectively.
  • Begin working together right away. If time allows, establish working relationships between team companies by subcontracting work to each other on existing similar/identical contracts. There are often obstacles to executing this tactic, but having a proven, successful track record of working together is usually important to a customer’s proposal evaluators.
  • Manage and highlight important assets. Bolstered by terms in the signed teaming agreements, ensure that each team company contributes its most effective personnel to opportunity and proposal activities, and carefully and effectively manage them. Ensure access to Customer Representatives; Technical Experts; proprietary technologies, equipment, and facilities; and cost-reducing techniques. All of these assets will likely be available to the opportunity and proposal teams—and must be deployed to achieve a competitive advantage.

6. Consult with customers and consider their roles in team formation.

Customers have a stake in teaming combinations, preferred partners, and contractual teaming arrangements. Review potential teaming combinations and arrangements with the customer, if possible. Whether encouraged by the customer or not, justify why you have teamed, describe the role of each partner, and explain the unique reasons the partner was selected.

Customers often review your teaming selection criteria as part of their evaluation and source selection process. For example, customers dislike teammates whose primary motivation is to reliably secure a share of the work without competition.

Occasionally, organizations feel compelled to team, either by the customer, their management, or conditions in the market. Forced teaming arrangements can increase risk, particularly if the partners dislike each other or prefer not to work together. Consider whether forced teaming is worth the increased risk.

7. Negotiate a common vision as the basis for teaming and agree to a written agreement.

In the best teaming relationships, team members share a common vision, strategy, and values. An organization driven to be a low-cost producer is likely to conflict with an organization focused on customer service or technical leadership. Similarly, an organization with a collaborative management team will conflict with one headed by a CEO with a single-minded approach.

Contrasting visions, approaches, or management values breed conflict, which should prompt you to reexamine the merits of the teaming combination. Team members should recognize the need for each member and respect each member’s role and contribution.

Teaming arrangements need to be negotiated, written, and signed as early as possible in the opportunity management phase. In one major competition, the lawyers representing JV partners were still arguing about the JV agreement at the time of the Final Document Review. The strained relationship between the partners, reluctance to share information, and poor coordination were clear to the review team and detectable in the bid.

Schedule team-building activities promptly after forming your team to improve cooperation and reduce risk. Team-building activities are relatively easy with a small opportunity or bid team. Team-building activities are essential when integrating multiorganizational opportunity/capture management and proposal teams. Cohesive teams built during opportunity/capture management and proposal development have less risk as they transition into program execution.

Common Pitfalls and Misconceptions

Automatically teaming with strategic partners

Two companies often form strategic partnerships to leverage their combined assets and capabilities when pursuing business development opportunities. While these alliances can be successful in winning new business, they can lead to poor teaming decisions. For each targeted procurement, it is critical to objectively determine the rationale for assembling a team, and not to automatically include a strategic partner on a team unless it truly adds value.

Delaying senior management approval

Bidders need to recognize that teaming leads to reduced revenue for the prime contractor and obtain senior management approval of teaming scenarios early in the opportunity phase. It can be embarrassing and devastating to have a senior executive no-bid a proposal just before submittal because he or she suddenly realized that the company would have to share a significant portion of the expected revenue and profit.

Miscommunications related to teammates’ price/cost

If you are the prime contractor on a bid, you will likely set expectations early in the proposal effort for your teammates to submit bid of a certain amount for their scopes of work. In certain situations, teammates’ written cost proposals may arrive far greater than anticipated, putting the winning price in jeopardy. Teams must always keep their bottom-line pricing expectations clear to avoid last-minute surprises like these.

Data and intellectual property rights

Some customers may request unlimited rights to data and information developed on the contract. However, when teammates have developed proprietary information, techniques, etc., at their own expense and plan to use them on upcoming contracts, they may not want to give away those rights for “free.” Keep these sorts of issues transparent so they don’t become last-minute roadblocks to a win.

Managing through the bid development phase

If you have teaming agreements with one or more organizations, their input to the customer’s response needs to be managed. The Bid Manager from the lead organization should, as far as is practical and possible, ensure that a Bid Manager or equivalent point of contact from the partner organizations is included in all elements of the schedule. The teaming partners should also have a clear understanding of when scheduled activities and reviews are taking place, as well as what will happen and how often progress meetings will be held.

It is advisable to have all teaming partners follow the same process and use the same templates for the development of elements such as value propositions, proposal strategy, theme statements, and content plans.

Managing content from teaming partners

Unless teaming partners are managed closely, you can expect to receive poor quality content and increased rework very late in the cycle. To manage teaming partners successfully, the Bid Manager should endeavor as quickly as possible to understand the process, activities, tools, and templates that the teaming partner would usually follow. If the preferred activity, tool, or template is unfamiliar to any of the teaming partners, the Bid Manager should offer training, mentoring, or coaching to a nominated point of contact. In this way, a common understanding of the methods, tools, and templates to be used can be effectively transferred to partner team members.

It is unlikely that a teaming partner would grant its whole team the time to undergo formal training; therefore, coaching the lead individual within the teaming partner is essential to achieve a common understanding. Take time to bring teaming partners up to speed on the process and activities that are expected. When the process and terminology differ between partnering organizations, the contributing team members may be confused. The Bid Manager from the lead organization should manage partner teams to ensure a common process is followed as far as is practical and activities, tools, and templates are consistent. This will help reduce rework at the end of the development process.

Each teaming partner is responsible for collating and collecting specific content. The Lead Bid Manager should provide support by thoroughly explaining the context and the content required against the customer’s requirements. Generally, you should collaboratively support and coach your teaming partners and subcontractors to:

  • Develop an aligned proposal strategy with the right evidence
  • Provide value propositions that are specific to the teaming arrangement that you hold
  • Provide theme statements that are specific to the teaming arrangement with your organization
  • Provide collateral for their responses to the requirements related to their part of the solution

Reporting progress to stakeholders

When working with teaming partners, build time into the activity schedule for regular progress meetings, whether virtual or face-to-face. This should be carried out collaboratively and at two levels:

  1. Partner-to-partner: Teaming partner Bid Managers share progress to monitor and adjust activity appropriately
  2. Upward, to senior stakeholders: Teaming partner Bid Managers report collectively to senior stakeholders to ensure all stakeholders hear consistent messages. This works best when there is one Bid Manager, recognized as managing all other Bid Managers and organization contributors, who provides the overall summary progress report with the other Bid Managers, while offering the detail of progress in specific areas, if required.

Summary

  • Objectively assess your company’s resources and capabilities to identify gaps and deficiencies compared to the customer’s expectations and your competitors’ capabilities
  • Determine if teaming with selected companies could create a winning bid
  • Choose teaming partners based on their ability to increase your win probability and their ability to work cohesively with the team and customer under the conditions of the proposed contract
  • Assemble your team by recruiting the selected companies, clearly negotiating defined roles and responsibilities, and codifying the arrangements in legally binding teaming agreements
  • Optimize and manage the team to maximize your competitive position and win probability
  • Manage teaming partners through the bid development phase rather than leaving them to their own devices

Terms to Know

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