Primes to subs: Go straight to the top

Large federal systems integrators are starting to see increased requirements for small business subcontracting, as well as increased agency oversight of those small-business plans, IT executives said today at the FOSE trade show in Washington.

Northrop Grumman IT is now seeing prime contracts with requirements to subcontract 35 percent to 40 percent of the work to small businesses, said Kent Schneider, president of the company's Defense Enterprise Solutions unit. In addition, the Herndon, Va., company is seeing contracts that require monthly reporting on subcontracting plans, he said.

Another federal prime contractor, Unisys Corp., has been audited by the government to ensure that it met subcontracting goals, said Rick Rosenberg, manager of defense systems for the Blue Bell, Pa., firm.

Schneider and Rosenberg, as well as Linda Gooden, president of Bethesda, Md., Lockheed Martin Corp.'s information technology business, and Michele Dyson, president of CISglobal, a small systems integrator, in Silver Spring, Md., spoke at FOSE, the IT trade show for the government market. FOSE is produced by Post Newsweek Tech Media, publisher of Washington Technology.

High requirements for small-business subcontracting can put a strain on the government customer and the prime contractor, the executives of large IT firms said.

For example, if a prime contractor tries to meet its small business goal by purchasing IT products through a subcontractor, the corresponding markup in price will be passed on to the government customer, Rosenberg said.

In addition, when prime contractors must subcontract large amounts of work to small businesses, they may not always be confident of the subcontractors' capabilities, Schneider said.

"When you assign high percentages, you don't always have a good understanding of the quality of folks you are getting," he said. "We get a better understanding of that [quality] through mentor-protégé programs and strategic partnerships. Those relationships are very important."

Dyson agreed that partnerships are key, but said sometimes those relationships can make it difficult for small businesses to break into the government marketplace.

"Most large companies already have a team they work with," she said.

The prime contractors advised small business owners to go straight to the top of their companies to get the primes' attention.

"Start at the top," Rosenberg said.

Executives of small businesses should tell those large-company executives about their capabilities with specific technologies and business areas, and about special client relationships in federal agencies, he said.