Exclusive WT research explores prime-sub dynamic

Our first Insider Report is out, and it’s a piece of research that we couldn’t be prouder of. It’s an end product that focuses on the prime-subcontractor relationship, but it's also a beginning because there is so much more we want to explore.

In part 1 of our Government IT Contractor Partnering report, we look at the relationship from the subcontractor's perspective. Later, we’ll explore it from the prime's perspective and the government customer's perspective.

The entire report is available to WT Insiders as part of their membership. Click here for more information on becoming an insider and receiving the entire report.

At its core, the question we asked Washington Technology readers was simple: How is the health of your relationship with your prime contractors?

But we found that the answer to that question is anything but simple.

The in-depth survey identified three attributes that subcontractors hold dear when forming partnerships with prime contractors: Teamwork, Industry Perception and Process. Of these three, Teamwork is held as the most desirable attribute.

The results of our research also shows a disconnect between the feelings of subcontractors when evaluating individual primes, and when evaluating the overall relationship between prime contractors and their partners.

Respondents were asked to evaluate the Washington Technology Top 100, our annual rankings of the largest primes in the government market. Enough statistically significant data was collected to take a deep dive into 20 companies.

The report includes a partnering scorecard for each of the following companies.

• Accenture
• BAE Systems
• Boeing Co.
• Booz Allen Hamilton
• CACI International Inc.
• Computer Sciences Corp.
• Dell Inc.
• Deloitte
• General Dynamics Corp.
• Hewlett-Packard Co.
• IBM Corp.
• L-3 Communications Corp.
• Lockheed Martin Corp.
• ManTech International Inc.
• Northrop Grumman Corp.
• Oracle Corp.
• Raytheon Co.
• SAIC
• SRA International
• Verizon Communications

These companies were evaluated on a 1-to-5 scale on a variety of criteria under the broad headings of Teamwork, Industry Perception and Process. For example, in the Teamwork category, individual companies were evaluated on six attributes:

• Honoring teaming agreements and commitments
• Reputation among customers
• Reciprocity in working with subcontractors
• Communicating with partners
• Communicating with customers
• Ease of working relationship

Interestingly, the scores in these areas were tightly grouped together, with the lowest score for any of the companies being a 3.1, and the highest in any category being a 4.1.

Everyone scored between good and very good.

This pattern holds in the detailed evaluations on Industry Perception and Process.

The disconnect, however, comes when respondents were asked more open-ended questions about the general health of the relationship between prime contractors and subcontractors.

According to our analysis, respondents gave the attributes of Teamwork, Industry Perception and Process a higher value than the individual Top 100 primes performed in those areas.

Our gap analysis shows that the greatest disconnect is between the importance of teamwork and the teamwork scores of the top primes.

One conclusion that can be drawn from this gap is that there is an opportunity for primes to differentiate themselves as a preferred prime contractor by improving their performance in these key areas.

Another significant finding was that 35 percent of respondents feel it has become more difficult to work with primes over the past two years, while only 21 percent believe it has improved. Forty-four percent said it has stayed about the same.

The budget environment is most often blamed for the tougher relationship, but a lack of communication, transparency and bureaucracy also were faulted.

The research also offered ample opportunities for respondents to voice their concerns about the prime-subcontractor relationship in the federal market, and it’s here that some of the toughest criticism of prime contractors came through.

The four open-ended questions in the survey generated a whopping 1,454 comments, which are included in the Verbatim Respondent Comments report. That kind of response speaks volumes about how important subcontractors feel about the state of prime-sub relationships.

The report includes many of the verbatim comments, and I’ll be exploring those in my blogs going forward. We also gave several primes a sneak peak at the executive summary of the report, and their reaction is included.

I’ll be exploring those in greater detail in future blogs as well.

The entire 40-page report is available for downloading by WT Insiders. This is part of the promise we made to you when we launched our paid members model. Remember, this is just the beginning, too.

But we also want to hear what you think, so you can use the comment field below or contact me directly at Nwakeman@washingtontechnology.com.