BAE uses team approach to build small-business alliances

Every month, the IT group for BAE Systems North America Inc. invites about three dozen small-business partners to a Homeland Security Department trusted forum. They discuss issues and trends, and identify emerging opportunities as well as share best practices.Sometimes there is a guest speaker, such as a recent presentation by Kevin Boshears, DHS director of small-business utilization. Team members often swap ideas and occasionally form teams to pursue projects.Early this year, a member of this trusted partner group identified a limited competition, quick-turnaround, $20 million opportunity at DHS. Within two weeks, BAE Systems had recruited four partners from the forum and submitted a bid.At press time, the contract had not yet been awarded, and BAE Systems declined to identify the teammates lest it hurt their ability to partner with another prime contractor. Nonetheless, the process exemplified "our unified approach and ability to react to the marketplace," a BAE Systems official said.William Mitchell, BAE Systems' procurement director and small-business liaison, credits Mike Sherman, the company's DHS national account manager, for creating the trusted forum, which he called unique among large contractors.Mitchell said the forum is an example of the company's effort to establish "lasting relationships ... both as prime and sub with these small-business partners."Because BAE Systems IT manufactures products, this unit can operate under a "commercial subcontracting" plan, which covers 96 percent of dollars committed to small-business partners. Last year, about 48 percent of this pool went to small businesses, with small, disadvantaged businesses receiving 5.5 percent, and woman-owned small businesses getting 6.6 percent.The IT unit is one of three groups in the parent company's customer solutions organization. The others focus on commercial services and ship repair, but Mitchell said all three units share small-business opportunities.To help with the sharing, BAE Systems early this month brought in Diane Dempsey as director of small-business relationships. She will handle small-business alliances for the entire group. She held a similar position at Computer Sciences Corp. [See Aug. 1 "Making the Team" feature.]Among Dempsey's first tasks will be creating a new small-business Web site that lets potential partners register online. It should debut in June.Mitchell and Dempsey will focus on their company's small-business alliances. In one contract for a civilian agency, which Mitchell declined to identify, nine of the 10 subcontractors are small businesses that collectively received "98 percent of the subcontracting dollars," Mitchell said.Other recent BAE projects have used TechGuard Security LLC, a Chesterfield, Mo., company that specializes in network security. The long-term relationship with TechGuard has morphed into a mentor-protégé agreement with BAE Systems.Separately, BAE Systems cited subcontracts with SAI Staffing Alternatives Inc., Gaithersburg, Md., and USresources Inc., McLean, Va., which provided staff augmentation on a major, nationwide, government computer hardware and software installation project. Ascenda Inc., Fairfax, Va., supplied Oracle database security and performance solutions for government contracts as well as for BAE Systems' internal use.At the top of his checklist for subcontractors is past performance, Mitchell said."We try to find small businesses that are working or have worked in the agency [in which] we are going to submit a proposal. A good reputation for doing a great job [is also] very important," he said.Recognizing that young companies may not have a heavy roster of accomplishments, Dempsey said BAE Systems has established procedures to help small businesses in their subcontracting processes."We understand cash flow," she said. "We can provide flexibility in payment terms, which often is very helpful to small business. BAE Systems will address payments on a case-by-case basis."The company values innovation as well as on-time delivery and meeting client quality expectations, she said.What she finds frustrating, she said, is the number of hopeful partners who do not do their homework to understand the kinds of projects BAE Systems undertakes."It's up to the small business to conduct research," Dempsey said. "They should be up to the task [when] they conduct the first interview."To see who is serious about specific projects, small businesses should go to bidders conferences, Dempsey said. Such conferences are not only a good opportunity to connect with the prime contractors but also to "see who the competition is and [with whom] they are likely to team," she said.Other programs help team partners develop skills or requirements so they can offer "even greater support" in future projects, she said.Preparing for the future is a major objective of Michael Bennett, BAE Systems' vice president of contracts, pricing and procurement.It is "so important ? that small business understands where we are going," Bennett said. "Too often, they come in the door, looking for a quick opportunity today. They are much better off looking at the long term."BAE Systems uses the pipeline of future opportunities "to target small businesses that can support projects we're going after a year or two down the road," Bennett said, citing the connection with BAE System's business development office to identify projects and communicate directly with small businesses that can support them. Through this structure, Mitchell said, BAE Systems can bring in subcontractors during the early phases ? usually before the request for proposals is issued.Gary Arlen is president of Arlen Communications Inc. in Bethesda, Md. He can be reached at Gary Arlen@columnist.com.