You just came across the perfect bid for your company and as you learn more about it you have to make a decision on whether to bid as a prime contractor or a subcontractor.
Often times this decision is clear, you either don’t have the resources to bid as a prime or you are overqualified to sub. But what should you do when you are walking the line and your bid could go either way? We put together a quick checklist to consider when deciding how to bid:
When to bid as a prime contractor:
- If you have the proper resources. Prime contracting has a much higher cost of entry but, if you have the proper resources and are prepared to take on the full responsibility for preparing the proposal and delivering on your promised capabilities, priming will likely pay dividends in the long-run.
- If you have proven capabilities. When you have the capabilities and the resources, going after a contract with a prime bid will likely produce a win. Don’t be afraid to think outside the box with what jobs your capabilities align to. For example, did you know the agency that is the largest consumer of milk is the Bureau of Prisons not the Department of Education? Plan to prime when your capabilities match the need, even if it is a bid you wouldn’t typically go for.
When to bid as a subcontractor:
- If you are breaking into a new customer market and don’t have much past performance to show. Even if you are well versed in government contracting, if you are diversifying your customer base, you will likely need to start small. Try subbing on a few bids in the new market to build a long-term success strategy.
- If your offering is a smaller piece to a much larger puzzle. Your capabilities are your main focus, but it is helpful to take a step back and recognize when what you offer is only part of the solution instead of the solution. Recognizing when you can scale back will give you time to focus on bids where you are the solution, in addition to your subcontracting pursuits.
- If you have a potential organizational conflict of interest (OCI). Priming may disqualify you from bidding on a contract where there are potential OCI’s because you are subject to OCI clauses. However, as a subcontractor you are not held compliant to these clauses so you can work on projects you wouldn’t be able to as a prime.
How you bid could the difference between signing onto a contract and not. When you’re on the fence between sub and prime make sure you put some strategy behind your decision to ensure wins.