Are you looking for additional revenue opportunities? Do you want to go after a sales opportunity that is out of your reach maybe because of lack of infrastructure, relationships, capital, etc? Many small to medium size businesses are in this position and the strategy that they implement to combat this situation is formalizing a teaming agreement. A teaming agreement is when two or more businesses come together and partner to perform the duties and responsibilities for a specific project. Usually one of the parties will be the prime contractor and the other party or parties will be the subcontractors. Forming this strategic partnership can create new revenue opportunities for all parties involved, but it is important to understand what steps need to be taken in order to create a strong teaming relationship.
As the prime contractor and subcontractor(s) it is imperative that each party understand what their strengths and core competencies are. Each team member needs to be clear on what it is that their company brings to the table to support the specific project. The reason this is important is companies will want to avoid redundancy and make sure there are complementary services or products that will provide value for the client and specific project. The goal is to have a collaborative environment where the integration of the work flow will be transparent to the customer.
The second step is to screen and identify potential partners. You will need to look at goals, values, strength of company, pass performance, complementary services, customer relationships, incumbency, etc. of the partners you are interested in working with and have pre-qualification meetings in order to identify who fits best with your company based on your teaming criteria. This is a step that should not be taken lightly as your company name will be associated with the response and level of service the entire team provides to the customer and project on hand.
Once you have identified possible partners you will need to take the qualification process a step further. There will be questions you may need answered that are private in nature and that is the reason why during this phase I recommend you sign a Non-Disclosure/Confidentiality Agreement. This will protect the confidential information or knowledge that each team member may be sharing between each other during this final exploratory phase. You will now have the opportunity to “look inside” the company in order to validate the selection of teaming partners.
The fourth step once all parties have been identified is to execute a formal teaming agreement. As we mentioned earlier, a teaming agreement is when two more businesses come together to perform the responsibilities for a specific project. More importantly, the agreement will define the relationships between all the entities involved. This may include: project under consideration, proposal preparation, roles, responsibilities, terms, scope of work, performance, etc. You will want to make certain the scope of work is clearly defined for all partners in order to make sure each team member is clear on what is their role during the process as well as what is expected of them. The scope of work and teaming agreement should not be dubious and unclear.
The teaming agreement is a strategy many organizations in technology, construction and facility management utilize, but there is no reason why you can’t investigate to determine if the strategy may be applicable for your specific industry. By implementing the four steps discussed above you will be in an informed, offensive position and be on your way to creating supplementary revenue for your company.