1. Business Ideas
  2. Business Plans
  3. Startup Basics
  4. Startup Funding
  5. Franchising
  6. Success Stories
  7. Entrepreneurs
  1. Sales & Marketing
  2. Finances
  3. Your Team
  4. Technology
  5. Social Media
  6. Security
  1. Get the Job
  2. Get Ahead
  3. Office Life
  4. Work-Life Balance
  5. Home Office
  1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
  1. HR Solutions
  2. Financial Solutions
  3. Marketing Solutions
  4. Security Solutions
  5. Retail Solutions
  6. SMB Solutions
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Lead Your Team Strategy

Teamwork Wins More Federal Contracts, But It Costs More

Teamwork might be the answer for small businesses seeking federal contracts. That’s the finding of a new survey that discovered that businesses that work together get rewarded government contracts more often.

According to the research, from American Exress OPEN’s small business division, business owners who team up with other small businesses to jointly bid on federal contracts see the greatest results. Two-thirds (68 percent) of active small business contractors who have pursued teaming opportunities have exceeded $1 million in federal contracts won to date, and 38 percent have exceeded $10 million, survey found.

Businesses that partner with a larger prime contractor also report a higher success rate versus the average small business contractor: 61 percent of active small businesses that have performed as a subcontractor report that the total value of all of the federal contracts they have won to date exceeds $1 million, and 31 percent have exceeded $10 million.

In contrast, a lower percentage of the overall active contractors (many of whom have gone it alone) have exceeded the $1 million and $10 million milestones in federal contract awards won to date: 46 percent and 21 percent respectively. Active contractors are defined as small businesses that have been awarded a prime federal contract within the past three years.

The study also found that compared to active contractors overall, small business owners who employ teaming or subcontracting strategies win 50 percent more contracts. However this greater success requires a larger investment in uncovering contracting opportunities. On average, active contractors invested just over $86,000 in cash and staff time when bidding for federal contracts in 2009. Active teaming contractors and subcontractors invested $149,000 and $123,000, respectively.