Novel Thought: Using a Certified SDVOSB as a Prime as well as Adding Value

Another great blog entry from Jim Campbell, former US Marine and SDVOSB Owner.

Just as the title suggests, you CAN ACTUALLY USE AN SDVOSB AS A PRIME. I know everyone is thinking I am off my rocker, but hear me out. In this tough economic stretch, every company and I mean EVERY COMPANY, is looking for a way to just stay afloat. The new administration is trying to appease voters by allocating “recovery” monies all over the place, large well known companies are on the verge of failure, corruption has sent the previously thought to be wealthy in a tailspin, and banks are not lending to small businesses. So who is safe???? For the first time in a long time it is actually the small guy!
Before you start laughing or talking trash, please realize that large corporations are reeling from this economic death trap and that includes government contractors that have lived fat off of the government for years. The fed has reduced funding to a number of previously thought staples of government spending, and completely did away with entire programs in an effort to pay for this “stimulus plan”. All of the big guys see the writing on the wall and that is why they are actively engaging smaller 8(a), SDB, SDVOSB, HUBZone, Minority, etc owned businesses to prime on contracts they want to bid on. The catch is, you have to be financially stable and provide a true resource they can exploit in order to accomplish this. Here is what I have seen done as recently as two months ago:
An SDVOSB, HUBZone firm in Virginia approached wanted to bid on a pretty large ($112M 3 year deal), but knew that the required set aside of 60% would probably go to a standard sub for one of the big boys. So the president of the company, reached out to all of the big boys as a sub with a business plan that could not be topped or matched by any of his competitors – “make me the prime and I will guarantee the work by using one of your wholly owned subsidiaries as my exclusive sub”. See the picture? The business owner recognized that he was not large enough to compete with the big boys, but knew they weren’t able to get it because of the set aside requirements. So, in order to secure his place, he made a business offering to include their lesser performing, NOT AS PROFITABLE subsidiaries as his sub. The sub has the financial backing of the large powerhouse parent company, and now is the prime of a $112M 3 year deal with 3 1 year options.

I have also seen the writing on the wall for these large companies: “Share the wealth or go out of business!” Now, that is pretty funny in that all of the big guys (Lockheed, NGC, Raytheon) are so ingrained into sole source “forever” contracts that they are not at risk, but the group right below them are reading the same message. And they are eager to find partners that can help them win and retain business.

We have a lot of solutions and ideas that may be able to help, and a lot of folks have reached out to us after reading this blog. As always, if there is anything we can do to assist your company move in the right direction or possibly team with your group to win some contracts, please always feel free to contact me directly at jcampbell@benefitsintegrated.com or review what we do and how we can help at http://www.ibgsvcs.com.

All the best,
Jim

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One Response

  1. I will be looking you up at the website http://www.ibgsvcs.com

    Dennis W. Hering, SDVOSB
    Edison Electric, Inc.

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