USAID recently published an article highlighting Proximity’s journey from a subcontractor to the prime implementer on multiple USAID contracts.
The article prompted us to reflect on what we have learned – and what insight we can share with other small businesses thinking about taking this step. We distilled this experience into four suggestions.
Doing It Differently
There is no single path small businesses have to follow to receive prime contracts. In fact, their ability to be creative is the primary advantage of small businesses.
In Proximity’s case, we started out by providing an innovative solution to an urgent problem. Ongoing violence and volatility in Syria was preventing the collection and dissemination of timely, high-quality data. This was, in turn, limiting the effectiveness of monitoring and evaluation of humanitarian and stabilization programs. The situation was also revealing the limitations of relying on subcontracted third-party monitors; existing data-collection agencies in Syria were vastly overstretched – and overreliance on them was creating information echo chambers.
We offered a new approach to address this challenge. Rather than relying on extant data-collection firms, we directly recruited, trained, and managed our own team of researchers inside the country. As we progressively expanded these teams across Syrian communities, we were able to provide new data sets that were unbiased and directly quality assured. We consequently emerged as a go-to research firm in Syria (the location of our first prime contracts).
By the time we started bidding on USAID prime contracts in Syria, we could could conduct research as effectively – if not more so – than any large implementer operating in Syria.
Playing to Small Business Strengths
It’s hard for small businesses to compete in the same game as big-brand suppliers. But they don’t have to; there’s more than one game in town! Rather than trying to measure up against their bigger counterparts, small businesses should focus instead on the advantages their size offers.
For instance, while small businesses cannot draw on the same scale of headquarter resources as big companies, they can offer stress-tested, in-country platforms and highly local capacity. In complex delivery environments, these assets can prove much more important than the scale of backstopping. In Proximity’s case, we had years of experience in Syria conducting the operational legwork for big implementers, including hiring and managing large-scale management and research teams on the ground. This experience demonstrated our ability to perform in the environment – in a way that even the large implementers were unable without support. Crucially, this experience also showed that we could carefully manage the risk of operating in such a fragile and hostile setting. Like many small businesses, Proximity has a high tolerance for risk because we are close to that risk; we intimately understand the contexts and threats amidst which we work, ensuring we don’t expose our teams to danger.
Additionally, small businesses can usually offer richer contextual insight than their large competitors. Not only are they typically more locally embedded, but small businesses are also able to disseminate learning more effectively across their organizations, meaning that data from previous projects can be more distilled into insight for future ones. This is crucial for effective delivery, but it can also be a key asset during bidding processes. For our Syria contracts, for instance, we did not have limitless human and financial resources to throw at proposals, but we had been carefully learning from years of in-country delivery. And, just as this degree of knowledge had previously rendered us an invaluable partner for large implementing partners working inside Syria, it now allowed us to demonstrate to USAID that we possessed a unique level of insight in the country.
Small businesses can also offer more nimble, adaptive delivery. This allows them to launch quickly and turn the ship around when necessary – a characteristic that is particularly important in volatile humanitarian and development contexts. Proximity was able to show a strong record of agility. We had, for instance, been brought on as a subcontractor under the USAID Syria Humanitarian Monitoring Platform to provide data collection and field services across Syria. We were able to quickly mobilize our component by leveraging our deep network of data-collection specialists and drawing on our flexible FIELD 360 remote-training approach. In short order, we had recruited, trained, and fielded an expansive team for a multi-year monitoring and evaluation program.
Small businesses don’t have to “go it alone” on prime contracts. Proximity obtained its first prime contracts through USAID's small business set-asides. For each of these contracts, we brought on subs with extensive thematic experience and long track records of working successfully with USAID. This has allowed us to benefit from their experiences whilst we navigate the new territory of being a prime.
Just as important, USAID is not just a donor – it’s also a partner. Since winning our prime awards, USAID has been extremely supportive, encouraging us to ask questions and helping to jointly iterate our programming. They recognize that they are working with a small business and are supporting us as we deliver on the contract. And, just as they are teaching us to work with them more effectively, we are helping them to work with small businesses.
Finally, before small companies or organizations even consider working with USAID, they need to focus on two key prerequisites. Firstly, they have to make a deliberate effort to first get their operations and finance houses in order. They have to be confident they have the necessary systems in place to comply with USAID’s robust requirements. Secondly, they need to take the time to get to know their client. USAID is very supportive, but it takes time to learn about the institution and get a feel for its pulse.
Going from subcontractor to prime awardee is a big step, but once businesses have cleared the administrative hurdles and begin to understand USAID, the process becomes much easier.