It is important that you get your company on every potential prime contractor's Approved/Preferred Vendor List, or something very similar, which lists the vendors and subcontractors that have been approved by the prime for quality, on-time delivery, and other factors.
After you have submitted your application to the prime, the second thing that you need to do to get on the Approved/Preferred Vendor List of a particular prime is to prepare for and pass some sort of evaluation or inspection. The prime wants to assure that you are qualified and can comply with the subcontracting requirements.
The evaluation can be anything from a desk review, in which the prime will examine your company's records, financial statements, and other documentation, to a full site inspection of your facility. The type of evaluation depends on the circumstances of the contract and/or on company policy.
If you are providing a critical part of the end product or there appears to be a potential for a long-term business arrangement, the prime will probably want to do a full site inspection, which can be done by one person or a whole team. If that is the case, in addition to having your documentation ready for examination, you will also need to be ready to address questions and look your best.
If, on the other hand, your work involves a requirement that is ancillary in nature, a desk review may suffice.
While the full-fledged evaluation/inspection we describe is basically an initial event that is part of getting on a prime's approved/preferred list, you can expect the prime to return, possibly multiple times, to inspect once you have won a subcontract and begun doing work. For example, the prime might want its quality or production people to watch a particular phase, to verify that a particular requirement is being fulfilled properly, or to just make sure that everything is on track. The type and frequency of inspections will depend on the terms of the particular contract and will occur as the need arises or as the situation or contract changes.
What type of information do you need to get ready for an evaluation? Following is a list of some general categories of data that you will be asked to provide (note that gathering this data will prepare you for an inspection by any prime that you may be interested in):
- Manpower -- Include the availability of technical and supervisory personnel with special skills and know-how.
- Facilities and equipment -- List your equipment and include the arrangements you have made for additional facilities and equipment, if needed.
- Quality assurance -- Show the system(s) you use and indicate whether they have been approved by any government agency or other prime.
- Production scheduling -- Have charts ready to show how you plan to meet the prime's schedules.
- Schedule of total workload -- Include any anticipated and any repeat work as well as the dollar value of any remaining backlog.
- Bill of materials -- Include a description of the product to be made in your plant and a list of materials you need to buy from the suppliers. Identify what you can do in-house and what, if anything, needs to be outsourced.
- Inventory -- Check your existing inventory for usability on the proposed contract. Identify what steps you are taking to ensure that the parts and products you will need on the proposed subcontract will be on hand.
- Materials, suppliers, and/or subcontractors -- Include written or other confirmations on delivery dates of major and critical items.
- Cost breakdown and analysis -- Describe costs in sufficient detail to allow evaluation of cash flow spreadsheets.
- Cash flow spreadsheets -- Include sheets for the proposed contract and for the company's total workload. Reconcile these with the production schedule and the company's commitments for materials as well as other financial commitments.
- Financial statements -- Include, if necessary, your most recent profit and loss statement and balance.
Most primes will give you high marks for good documentation (as does the government). Therefore, as you gather this information, put it all in one place. Anything from a 3-ring binder to an electronic file will suffice-so long as you have covered the issues outlined above and the information is current and complete. It is nice to be able to just pull a book off the shelf or pull up a file on your computer and present information that is current, complete, and easy to interpret. This is a professional touch that will assure the prime that you are in control of the situation and that you have all your ducks in a row.