Information technology is a growing industry as more organizations, companies, and industries seek to modernize their workspaces. The automation of most systems makes it easier for the organization to streamline its service delivery and cut costs on inappropriate purchases and supply. Moreover, it helps boosts the organization overall turnover and revenue at the end of each financial year. Therefore, contracts related to information and technology continues to increase on a daily basis as companies, organizations, and industries seek to be ahead of their competitors. It would be ideal for the proposed company to focus on information and technology contracts, as they will offer better returns, recognition, and repetitive clients. The ideal services would be custom computer programming services, which is under the NAICS Code 541511. It lacks major competition from prime contractors and has a wide range of contracts the company can pursue.
The contract, Custom Computer Programming Services, seeks to engage in writing, testing, modifying, and providing support to software required in meeting the needs of the U.S industry (SICCODE, 2016). The contract seeks to classify the industries’ software publishers and plan and design systems, which incorporate efficiently with software, hardware, and other communication expertise. However, firms under the code might provide their own applications as a section of their integral facilities as classified in the NAICS code 541512 computer systems and design services (SICCODE, 2016). The industries’ broad measurement of available services makes it possible for different people and companies to way in their option when choosing a contract. Moreover, it allows them to bid other contracts aside from their main ones, providing an opportunity to make better profits from the side contracts.
The industries under the NAICS Code 541511 are in different categories as per the specifications. The first one is applications software, custom computer and programming services, which deal with the industry’s main computer programming services (SAMS, 2013). The second one is software development or custom computer program, which seeks to create applications tailored towards a specific market or industry. The third one is custom computer programming services and computer software design and analysis. It will be a good area for the company to concentrate on in its selection process. The fourth one is custom software programming and support services’, which is another area the company will focus on in its selection process. The last department is web page design and servicing, which can be a side contract for the company.
The industry provides several opportunities that the company can pursue. Moreover, the breakdown of various categories by the industry makes it possible for the company to apply and possibly receive two or more contracts. The company concentrates on programming services and computer servicing though it does not major in web design as the others. From the breakdown, the company can qualify for most of the categories, but it will be ideal to identify the main categories and work towards enhancing the chances of receiving the contract. One of the ideal ways to determine whether the company will fare better among its competitors would be to look into its profile, which the website provides for the users. The company’s listings are prime contractors, which would be hard to compete with since the proposed company does not have a portfolio.
Some of the four top companies include CACI International Inc., CA Technologies, Sabre Corporation and General Dynamics Information Technology (SAMS, 2013). All the companies offer professional, technical, and scientific services as their primary service but have various specifications for their services. The CA Technologies and CACI International are large companies with a high annual revenue. It may be a major competitor but provide adequate opportunities for the proposed company to work under it as a subcontractor. Sabre Corporation and General Dynamics Information Technology have similar features to the other two companies, but they have a well-established business model, which they accumulated over the years. It would be a viable option to focus on them than the other pair when it comes to winning contracts as subcontractors.
Accessing subcontracts on computer programming services can be a profitable feature for the company though it has its cons towards realizing a good relationship with the prime contractors. The first advantage is access to prime clients who work with the prime contractors (Fishman, 2016). Since the company will work closely with employees of the prime company, there will be side jobs that the company can benefit from with time. Moreover, it will help build a relationship between the proposed company and client, paving the way for better deals in the future. The prime contractor will handle most of the negotiations on the job’s details and price among others, which makes it easy for the subcontractor (Fishman, 2016). Moreover, it will seclude them from the matters that might arise about the job.
Since the subcontractor only conducts the work provided to them by the prime contractor, they will have reduced administrative burden, which can be an issue especially when the client refuses to pay the contractor (Fishman, 2016). Moreover, it will help the subcontractor to concentrate on the work and complete it within the estimated time or earlier. Also, the subcontractor will have an opportunity to increase their range of services as they work with the client. Having a first-hand experience dealing with the clients will open up new opportunities and untapped avenues, which the company will add to its portfolio (Fishman, 2016). In the end, it will be a profitable venture, which will increase the annual revenue. Lastly, the company will secure more work as it works towards being a prime contractor in the end.
Despite the opportunities and growth process as a subcontractor, there are some cons towards working as a subcontractor. Finding a prime contractor to work with can be a problem due to trust and commitment issues (SAMS, 2013). Some of the prime contractors might fail to adhere towards the contract or forfeit the work prematurely. Moreover, there are those that will take up a higher cut for the job despite the subcontractor doing the work to perfection. They take advantage of the subcontractor because they are the prime contractor and have a link to the client directly. Working under a prime contractor requires one to give up their control over the job (SAMS, 2013). It requires one to submit to what the prime contractor asks and not what the client requires. In instances where an issue arises, and the client does not approve of the work, the prime contractor will blame the subcontractor for it.
In conclusion, the proposed company has to work towards ensuring growth and commitment towards the assigned work by the prime contractors. Seeking the opportunity to be the prime contractor in the field of computer programming services seems farfetched presently, due to the company’s status. However, the company will grow with time as they manage to win other contracts and work closely with the clients. Moreover, having an overview of the issues that face subcontractors will enable the company to foresee similar situations and avoid them. The company’s future is bright as long as its employees and management create a plan that will enable them to move forward.
References
Fishman, S. (2016). Being a Consultant, Freelancer, or Contractor: Pros and Cons. Retrieved from Nolo: http://www.nolo.com/legal-encyclopedia/being-consultant-freelancer-or-contractor-29593.html
SAMS. (2013, March 21). The Pros and Cons of Subcontracting. Retrieved from Charsoft.com: http://wave.charsoft.com/Portals/0/Subcontracting.pdf
SICCODE, A. (2016). NAICS Code 541511 Custom Computer Programming Services. Retrieved from SICCODE.com: http://siccode.com/en/naicscodes/541511/custom-computer-programming-services
