Recently, we wrote about how partnerships can help small and minority-owned firms win government contracts. No matter the size or classification of your firm, partnerships can help you land larger, more lucrative contracts, or simply stay afloat during lean times. But the key ingredient is to find a partner with the right connections.

Northrop Grumman (NG) might be the right choice for many firms. As the second largest United States federal government contractor, according to Federal Sources Inc. and Eagle Eye Inc., the Los Angeles-based company provides technology products, services, and solutions in defense and commercial electronics, information technology, and systems integration and is the world’s largest shipbuilder. And as most industries are still dealing with restrictive IT budgets, the government’s IT spending is on the rise. According to a recent CNET article, the government’s IT spending is projected to top $63 billion in 2007.

To find out what it takes to become one of the company’s subcontractors, we spoke with three representatives at NG. They provided helpful advice for maneuvering the maze of the company’s eight business units.

Facts about NG

In 2001, NG provided $1.5 billion in subcontracting work for small businesses, including $192 million in work for small or disadvantaged businesses and $189 million for woman-owned small businesses. Such outreach efforts won the company the 2002 U.S. Small Business Administration’s Dwight D. Eisenhower Award for Excellence in manufacturing, which recognizes large prime contractors that have excelled in their use of small businesses as suppliers and subcontractors.

Conduits for consulting firms
To make the large company less daunting, provide information, and match the company’s capabilities with available opportunities, NG uses Small Business Liaison Officers (SBLOs) to serve as advocates for smaller businesses, said Gloria Pualani, NG’s Corporate Director for Socioeconomic Business Programs (SEBP).

“When you look at the size of the business, it’s often difficult for businesses to find their way through that maze,” Pualani said. “[SBLOs] are the first point of contact for someone who wants to do business with Northrop Grumman.”

The SBLOs also work to ensure that NG utilizes a certain percentage of small businesses in its contracts, and they report that activity in twice-a-year reports to the federal government. For example, the recommended minimum percentage of small businesses on contracts is 23 percent. The NG’s SBLOs work to make sure the company hits that and other percentages.

Pualani said that NG’s SBLOs were put in place in the early 1980s as the federal government began requiring that businesses make efforts to use small- and minority-owned firms in contracts. Currently, there are about 28 SBLOs across NG.

There are no fees involved for using an SBLO. NG has created a PDF document that lists all the SBLOs for potential subcontractors.

Many firms who are researching government contracting opportunities on the Web find themselves at the NG supplier Web site, the Online Automated Supplier Information System (OASIS), said Sallie Wilton, manager of NG’s Small Business Liaison Office.

Wilton suggests that interested contractors start with OASIS because it directs potential contractors to the proper business unit within NG and lists contacts and their phone numbers and e-mail addresses.

One bellwether for consulting work is contracts that NG has recently won or bid for, said David Capizzi, Senior Director of Procurement for NG’s IT division. Following NG’s contracts and bid activity can indicate what types of businesses NG is involved in and whether your firm has the right services for the company.

To track NG’s upcoming and ongoing projects, he suggested that firms read trade magazines and published government contract awards sections to find contracts won by NG’s IT division.

Capabilities statement: Be specific about your offerings
After contacting one of NG’s SBLOs, a firm must submit a capabilities statement that includes the firm name, contact information, business size classification, and any other special qualifications, such as Historically Underutilized Business (HUB) or minority status.

The capabilities statement should contain a basic overview of a firm’s products and services. It’s important to be as detailed as possible so that the SBLO can find the most appropriate opportunities, Wilton said.

“If there are a lot of products and services and they’re trying to combine them all into one [statement], they should offer detailed information for each one,” Wilton said of applicants. “If they want to tailor their information towards one area, it’s even better.”

After submitting the capabilities statement, firms must complete NG’s supplier data sheet, which asks about the type of work the firm has done, along with specific information like:

  • The DUNS (Data Universal Numbering System) number, a nine-digit number assigned by Dun and Bradstreet Information Services.
  • The NAICS (North American Industry Classification System) codes, which have replaced the Standard Industrial Classification (SIC) system.
  • Your business size classification, the SBA’s size standard that defines whether a business entity is small and, thus, eligible for government programs and preferences reserved for “small business” concerns.

The supplier data sheet also asks for the names and contact information for two businesses for which a contractor has supplied services or products during the past two years. Applicants should expect that those firms would be contacted in the event that they’re being considered for a subcontracting opportunity.

When the supplier data sheet is complete, the firm can be entered into NG’s new subcontractor database, which was implemented to simplify finding the right subcontractor for its internal users. Companies in the database are listed with links to their information, including a capability statement, ownership, business size, and specialty.

Once a firm is entered into the database, the SBLO will search NG’s current and upcoming contracts for likely matches. The SBLO will send out e-mails to any NG project managers that may need a contractor with the firm’s skills. If one is found, the SBLO establishes a dialogue between the two.

The company has just begun coding the firms with ratings for past performance. In addition, NG’s business development unit is analyzing the technology capabilities of some potential sources to determine whether they are a good source for NG’s contracts. As the database matures, that information will help NG’s internal users choose the best contractors for upcoming projects, because past performance is a key factor in determining which contractors NG uses, Capizzi said.

“Once we’ve had experience with a vendor and it’s been successful, then you’re going to see more and more people, or more and more of our programs go to those vendors,” he said.

Exploit your firm’s specialty
To capture the attention of NG’s internal users, Capizzi said the best strategy for a firm is to demonstrate a specialized capability or to perform work as a “second-tier subcontractor to assist another contractor with proven capability” and establish a performance record.

As examples of capabilities in hot demand, Capizzi mentioned software modification and configuration capabilities for specialized/limited distribution software packages. Many of NG’s projects for clients like the Department of Defense, the intelligence community, and other federal and civilian agencies require developers to write original software, modify existing software, or apply commercial-off-the-shelf (COTS) products with no modification.

The location of your company can also work in your favor. For example, NG performs government contracting work in some isolated areas. If you’re the only local firm with the necessary capabilities, your chances are greatly improved that the company will look to your firm for services.

NG representatives also urged that firms seeking to join forces with larger contractors keep their ear to the ground to capitalize on opportunities as early as possible. As sources of information, the team from NG offered the following small business resources from the SBA:

  • PRO-Net, the SBA’s database of small businesses
  • SUB-Net, a directory of subcontracting opportunities posted by prime contractors, complete with contact information

Many companies, including Northrop Grumman, often use PRO-Net to search for a specific type of business, so PRO-Net is an excellent way for a small businesses to market themselves because they’ll be more likely to be considered as a part of a large contractor’s bid from the beginning, Capizzi said.

“You construct your team and negotiate your subcontracts and everything else prior to an award,” Capizzi said. “By that time, it’s a dead issue as far as who the source is going to be.”

Do you have a capabilities statement?

Have you created a capabilities statement that’s worked well for you? We’d like to publish sample statements as examples for our consulting members. Send us yours; if we use it, we’ll send you a TechRepublic mug.