When & How to Include a Subcontractor in Your Bid Proposal
If you have discovered an interesting project you're qualified for, except for one or two specialized parts, don't just apply and hope the selection team doesn't notice your weak areas. Don't just give up either. Instead, power up your proposal by adding a subcontractor.
That way you have an edge over other applicants by offering expertise and potential success for the entire project, not just bits and pieces. And it's not that hard to find a subcontractor. Here are some possibilities to choose from:
- A friend who has the skills you need and some project history
- A former employee who is now in business for herself
- A local professor who moonlights
- A smaller company in the area with different skills
- A bigger out-of-state company that is looking to make contacts locally
I have written many proposals that include subcontractors and now am a subcontractor myself. Here are the steps you'll go through when preparing the subcontractor section of your bid.
A Typical Subcontracting Situation
The company I worked for had a contract with a city that called for us to conduct water use audits and a few electrical audits. We had lots of experience with water audits, but none with electrical audits.
Before we wrote our proposal, we asked a friend of the owner to be a subcontractor for the electrical audits portion. He did electrical work to supplement his regular job and had enough experience with side jobs to qualify for the project. Because electrical audits were new to us, we bid the contract a little low. With the combination of all of those qualifying factors, we got the job.
As time went on, our subcontractor faded away, but the city was giving us mostly water audits anyway. Eventually we got a couple of requests for two small water/electrical audits. Because we didn't have our subcontractor anymore, we looked for another one. There was a large electrical company, who had asked us to be a subcontractor on a proposal they were going after. We asked them to conduct the electrical portion of our audits and they agreed. This worked well.
Including a Subcontractor in a Bid
There are standard steps you go through when promoting a team that includes a subcontractor. First you will have to get agreement from your prospective subcontractor to work with you. Then you'll meet with them to decide how the tasks will be split out - what they will do as compared with what you will do.
I prefer a lunch meeting to work this out. It's casual and gives you a chance to look together at the Request for Proposal (RFP) and take notes, while at the same time socializing. You can also introduce them to other potential teammates at lunch.
After meeting, you will need to gather the same information from them that you are required to provide for yourself as prime contractor (but on a smaller scale). Most RFPs spell out exactly what information they want regarding subcontractors, so make sure they have a copy of their own to use as a checklist.
From each subcontractor you usually need the following:
- A description of them (or their company) and their skills.
- Examples and references for successful work they have completed.
- A resume, if they will be playing a primary part on the project.
- How much they charge (for your own self, not necessarily the bid).
- Proof of any license or insurance requirements.
Actual RFP wording . . .
3.2.4 Project Organization and Key Personnel
Describe proposed project organization, including key personnel and respective responsibilities. Indicate role and responsibilities of prime contractor and all subcontractors, including small contractors.
In the proposal you will need to describe the role you intend the subcontractor to play, and how you will coordinate their role/s with yours. You will want to establish yourself as the main point of contact with the prospective client. (The RFP will ask for contact information for each of you.) You will want to reassure your prospective client that you will take full responsibility for the work of the subcontractor and any liability they may incur related to the contract.
Most proposals require some kind of estimated timeline, so you will have to show the sub's work there, too, with relation to your own. When does the sub step into the project and when will their role be over? You are aiming for them to be a seamless part of your operation, and you will earn points with the prospective client when you show that seamlessness in your proposal. Illustrate it with charts and graphs, if you can.
Also take note of any especially qualifying factors the subcontractor brings. In the RFP agencies will usually spell out the rationale they use for giving "points" to bidders, and subcontractors can sometimes get you more points. Having an office near the agency's location is one way, especially if you're located out of town. Having special licenses, or a special management status (minority, woman, or veteran-owned business) will also get you points.
Sometimes potential clients will want to meet with you before they award the bid. If that happens, and you like the way your subcontractor presents themselves, it can be a good idea to take them with you.
If your proposal wins the contract, it's important to honor the agreement you made with your subcontractor, if you want credibility with them and your new client. You'll want them to do a good job for you. You'll want them to stick with you in case you need them for other contracts in the future. And you'll want them to spread the word that you are a good company to work with.
Overall Benefits to Working with a Subcontractor
When you take on a subcontractor, you have the chance to win a contract you otherwise might not have. In addition to that, you can learn new skills from the subcontractor. Depending on why they are subcontracting with you, you could even pay them to train your people to take over that skill. With their services and/or your new skills, you can expand your reputation, acquire potential business in a new market, and have them look out for you in their network, even as you look out for them in yours.
Imagine a Business World of Small Companies
I envision a country where this will be the norm. Where all businesses will be small, each with their own specialty and management team, each teamed up with many other businesses who support and enhance theirs. I envision whole networks of small businesses interacting, providing the majority of the business services and goods in this country. I imagine even the current conglomerates broken up into small, separately owned businesses.
This is what will make our country and economy great again. Our government was originally set up for this kind of economy. When it worked this way, there was plenty of work for everyone and our federal and state governments had plenty of money.
This is what we need to come back to, so never be afraid to subcontract. This kind of teamwork is what our country and economy was built on.
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- About SBA | SBA.gov
The federal government's Small Business Association was set up in 1976 to help small businesses become better established and successful. Although its procedures can seem unwieldy, it has helped millions of small businesses thrive.