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Lead Your Team Strategy

Teamwork Wins More Federal Contracts, But It Costs More

farmer-11120202 Credit: Farmer image via Shutterstock

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.

Business News Daily Editor

Business News Daily was founded in 2010 as a resource for small business owners at all stages of their entrepreneurial journey. Our site is focused exclusively on giving small business advice, tutorials and insider insights. Business News Daily is owned by Business.com.