September 23, 2011 by cs
The House Small Business Committee has launched “Small Biz Open Mic” as a forum for small business owner to speak directly to Congress about government policies affecting them.
Committee Chairman Rep. Sam Graves describes the site as a:
“… new media forum that encourages blog-type comments and testimonials from small business owners across America regarding government policies, and allows participants to comment on Committee news, legislation, hearings, and news stories that relate to small business growth and development. Comments from participants about legislation and policies that impact small businesses will be used to help the Committee conduct its official business.”
Small business owners can upload videos and leave comments at http://smallbusiness.house.gov/OpenMic/SubmitFeedback.aspx
You might want to consider saying something about the value that you receive from the services of a procurement technical assistance center (PTAC) like the Georgia Tech Procurement Assistance Center!
Check it out the full site at http://smallbusiness.house.gov/OpenMic/
September 22, 2011 by cs
Federal agencies must accelerate their payments to small business contractors, according to an Office of Management and Budget memorandum released Wednesday.
The new guideline cuts the recommended payment time in half. Previously, under the 1982 Prompt Payment Act, agencies had to make payments within 30 days from when an invoice was received. Now, agencies should make payments within 15 days, or as soon as practicable.
With the government spending nearly $100 billion a year in small business contracts, OMB predicts this will boost cash-flow for small businesses and help create economic growth.
“This will benefit tens of thousands of small businesses by getting money into their hands faster,” Jeff Zients, deputy director for management and chief performance officer, said in a blog post for OMB. The late payment interest penalty will not change, however. A provision in the Prompt Payment Act, the penalty is triggered when an agency does not pay within the 30-day mark.
Initial reaction from the National Small Business Association is positive.
“We’re supportive of it conceptually. Expediting the payment time is a good thing,” said Molly Brogan, vice president of public affairs for the group.
Agencies are expected to notify OMB by Nov. 1 when they can begin making accelerated payments.
– by Caitlin Fairchild - Government Executive – September 15, 2011 at http://www.govexec.com/story_page.cfm?articleid=48808&dcn=e_tma.
September 15, 2011 by cs
Just a few weeks remain in the most turbulent federal fourth quarter in memory. On Oct. 1, a new fiscal year will launch without a budget of its own. In the meantime, you’ve still got fiscal 2011 to close out.
At this point, your sales group must swerve into expediting mode in order to close as much business as possible in the remaining month until the end of the fiscal year.
While marketing and business development really can’t do much for the current fiscal year, you still have time to close sales.
Here’s how: Concentrate your expediting activities on making sure contracting officers receive complete, signable packages they’ll be willing to move on. Keep in mind, they are in a mode of only signing and moving packages entailing the least friction for them.
To ensure closure, make sure you can affirm the following statements.
1. My customer has completed its market survey.
Program people — those with the mission and budget — must identify best value options for the contracting officer, so your proposals must explain your value, and not just your technical chops.
2. My customer is solid on its requirements and has justified use of my product by name.
Government buyers are taught to state requirements without naming a brand. To make sure your brand gets procured, it must uniquely fill a requirement. That information must make its way into the requirements document that accompanies the purchase request.
3. The money is there.
Agency comptrollers decide whether or not expenditures map to the congressional intent for the money about to be spent. But the documentation must be transmitted to the contracting officer.
4. The contracting officer has identified a preferred vehicle against which to execute the purchase.
That’s the fastest way for a contracting officer to obligate funds, placing an order against an existing vehicle. Make sure the contracting officer has everything needed to comply with ordering procedures of that particular vehicle. Keep in mind, managers of the big government-wide acquisition contracts are themselves doing what they can to help ordering contracting officers to max out year-end sales, but they can’t cut corners.
5. I’m tuned into fair-notice/fair-opportunity notices for my contract vehicles.
Each vehicle has its own process. The closer you get to Sept. 30, your sales team must be ready to respond as cycle times compress.
Remember, a sale in the federal market isn’t a sale until a contracting officer signs an order or awards a contract. That makes federal sales different from commercial sales, where you can pretty much count on an order once it’s in the purchasing department. Federal contracting officers don’t report to program managers who manage the money, write the requirements and send purchase requests to the contracting officers.
Yet, even now, hundreds of millions of dollars remain uncommitted. Contracting officers don’t want to be deliberately obstructionist. But like the program and technology managers they serve (and you are selling to), they are looking at future uncertainty, the current time crunch and more oversight. Sellers who can help federal customers tie orders to authorized requirements and smooth the last-minute speed bumps will be able to maximize their fiscal 2011 revenue.
And here’s a bonus: By expediting last minute sales in this way, you’ll be able to deliver more accurate sales forecasts to headquarters. That’ll help maintain their faith in the federal market even as they look at the national headlines.
– by Steve Charles in Washington Technology. Published Sept. 14, 2011 at http://washingtontechnology.com/articles/2011/09/14/end-fiscal-year-sales-tips.aspx?s=wtdaily_150911
September 1, 2011 by cs
The portion of sales going to small businesses in NASA’s Solutions for Enterprise-Wide Procurement (SEWP) IV reached 42 percent last year, an increase of 7 percent from the previous year, according to SEWP IV officials. SEWP is a governmentwide acquisition contract (GWAC), providing advanced information technology products and related services at fixed prices.
August 15, 2011 by cs
The State of Georgia’s Department of Administrative Services (DOAS) recently updated its purchasing policies and procedures. If you’re a vendor interested in pursuing work with a state agency, you’ll want to familiarize yourself with the new manual.
The latest revised Georgia Procurement Manual (GPM-V2-July2011) can now be found online at http://pur.doas.ga.gov/gpm/MyWebHelp/GPM_Main_File.htm. The new version has all the policy changes described in the recent Official Announcement SPD #01-12, dated July 18, 2011.
This new GPM version does not have the policy changes that will take effect on September 1, 2011. The text of the upcoming September policy change can be
found in the SPD #01-12 Official Announcement Supplement located at http://doas.ga.gov/StateLocal/SPD/Policies/Pages/Home.aspx. For further details, review Official Announcement #02-12.
August 15, 2011 by cs
Nearly doubling your revenue in one year is remarkable in itself. That 5 AM Solutions Inc. did it in an uncertain economy and with less government contracting dollars is one of the reasons the Reston, Va.-based company holds the No. 41 spot on this year’s Washington Technology Fast 50 list.
Between 2009 and 2010, 5 AM’s revenue rocketed from $7.2 million to $13.9 million, and its compounded annual growth rate over the past five years is 140.29 percent.
“We bring some really unique talent to the field where there’s a lot of opportunity,” said Brent Gendleman, president and CEO of 5 AM. The company develops software for life science and health professionals, and health information technology is a burgeoning field.
“I think our brand of transparent process and high-quality folks and team players has some resonance,” he added. “There’s just a huge opportunity for our government clients to take advantage.”
Good workers are great, but only if there’s work for them to do. Contract wins that put the company in the thick of two of the country’s biggest health IT initiatives have ensured that the 5 AM team stays busy. Since July 2006, the company has been handling software engineering for the National Cancer Institute’s caArray open-source Web-based array data management system, under a $9.25 million contract. The system helps translational cancer research by acquiring, disseminating and aggregating information that can be shared via the cancer Biomedical Informatics Grid.
In April, 5AM won a $5.1 million contract to provide software engineering for the National Health Information Network’s CONNECT open-source software, which enables secure electronic health data exchange among health care providers, insurers, government agencies and consumer services.
With those customers and the National Institute of Child Health and Human Development and the Office of the Surgeon General established, Gendleman said he is setting his sights on the Veterans Administration and the National Institutes of Health.
“We are hopeful that some of the things that we have learned at the other agencies can be applied there to a very important and direct population that we would love to get engaged with directly,” he said of VA.
Some of those lessons include being transparent to establish trust. “That trust is between not just two individuals but between the company and the client that they’re serving. There’s a partnership – and it really is a partnership – that they’re trying to achieve,” Gendleman said.
Knowing when to quit is also crucial. “You want to fail as quickly as possible,” he added. “The longer you wait, the more expensive it gets and who wants that? Nobody. It’s not everybody’s instinct but failing as fast as possible is absolutely the most important thing to do. When you’re talking about medicine, you want to know if something’s not working now so you can try something different and don’t hurt someone. On the science side, it’s the same thing.”
Besides adding to its workload, 5 AM plans to add to its employee roster. The company, which has lost only three workers in the past four years, started with two employees in 2003, now has 48 and aims for 70 employees by next summer. Most of the hires will be in the engineering department.
Going forward, federal budget concerns will be the company’s main challenge, Gendleman said.
“People are very reluctant to say ‘Let’s do this initiative or that initiative’ when they don’t know if they’re going to get the funding or not,” he said.
But even that could be an opportunity, Gendleman added. “Sometimes the cuts really do allow for people to take a breath and reevaluate and reprioritize, and sometimes you’re in the plus part of that.”
About the Author: Stephanie Kanowitz is a contributing writer to Washington Technology. Published Aug. 11, 2011 at http://washingtontechnology.com/articles/2011/08/01/fast-50-5am-solutions.aspx?s=wtdaily_120811.
August 5, 2011 by cs
This year is no exception. The companies making Washington Technology’s top 50 list of small businesses (“The Fast 50″) have had extraordinary growth, starting with No. 1 company, SAVA Workforce Solutions, which achieved a five-year compound annual growth rate of 326.05 percent.
The small businesses on this list have shown an ability to adapt and change with the market. Many are taking advantage of various small business programs to build businesses that will stand the test of time.
The types of companies that populate the Fast 50 range from resellers to consultants and IT services providers to research and development firms. The list is entrepreneur heavy with most companies having a founder or team of founders at the helm.
The aggregate value of 2010 revenue for the Fast 50 is $1.4 billion. The No. 50 company NextPoint Group, came in with a five-year compound annual growth rate of 62.49 percent. Not too shabby.
So there is plenty for these companies to celebrate, but as you read the profiles of the Fast 50 we are highlighting here, you’ll quickly realize that these companies, despite their growth, also are facing a tough market and they know it.
Just like their larger brethren in the government market, their customers are facing austere budgets with dim prospects for the rampant growth of the past decade.
The response from these companies comes in several shapes. First, there is a push to control costs because government agencies are putting more and more emphasis on price in the contract bids they evaluate.
That in turn puts pressure on contractors to control their own costs if they want to remain profitable.
“If your overhead rates are low, you’ll stand a better chance of winning,” said SAVA’s general manager David Poirier.
The key is to balance bidding the best people with controlling costs. For Poirier that is the key to success.
In the current budget environment customers are reticent to move on new projects.
“People are very reluctant to say ‘Let’s do this initiative or that initiative’ when they don’t know if they’re going to get the funding or not,” said Brent Gendleman, president and CEO of 5AM Solutions, No. 41 with a 75.17 percent compound annual growth rate.
Another impact of the tighter budgets is increasing competition.
As we see funding streams shift around and priorities shift and certain programs being defunded, companies that can be flexible and agile really gain a sustaining advantage in their ability to compete,” said Dawn Halfaker, president and CEO of Halfaker and Associates, No. 11 with 153.32 percent five-year growth rate.
But the problems of tight purse strings and program at risk of losing funding can create opportunities as agencies scramble to perform their missions with fewer resources.
“Sometimes we’re able to help with that process and perhaps achieve savings,” said Nicole Geller, CEO of GCS Inc., No. 35 with 82.45 percent compound annual growth rate.
“Sometimes the cuts really do allow for people to take a breath and reevaluate and reprioritize, and sometimes you’re in the plus part of that,” Gendleman said.
A paramount focus for these companies is performance, making sure they are delivering value to their customers.
“Regardless of company size, political climate or the budget battle, if you’re good at what you do and have happy customers, I think you’re well-positioned for success,” said Christopher Romani, president and CEO of Integrity Management Consulting, No. 7 with a 188.18 percent compound annual growth rate.
The theme of a customer focus and a dedication to the customers mission is repeated often by the Fast 50 companies. It is both a passion for the market and a survival instinct.
“You have to make sure you’re keeping an eye on what the government is buying and where [government buyers] are spending their money,” said Frank Blair, managing partner of Edaptive Systems, No. 19 with a 105.2 percent growth rate. “Because if you’re not flexible enough to change direction, you’re going to get mauled.”
MORE FAST 50
– About the Author: Nick Wakeman is the editor-in-chief of Washington Technology. This article was published 8/1/2011 at http://washingtontechnology.com/Articles/2011/08/01/FAST-50-intro.aspx?s=wtdaily_020811&p=1.
August 3, 2011 by cs
IT Schedule 70 is a streamlined, convenient, money-saving and time-saving tool for government to obtain the commercial goods and services needed to satisfy requirements. The Coalition for Government Procurement (CGP) represents more than 300 firms selling commercial services and products to the federal government and advocates for common sense in government acquisition. According to Roger Waldron, CGP’s President, “the true value of the $16 billion IT Schedule 70 program is its ability to streamline acquisitions, making it easier for federal agency buyers as well as industry partners to transact business.”
Waldron maintains the sheer size of IT Schedule 70, along with the many features and capabilities offered, creates a cost-effective contract channel for government contractors to market their products and services. “Typically, bid and proposal costs are expensive. IT Schedule 70, with its pre-negotiated terms and conditions, along with the ability to use eBuy to post RFQs, enhances competition, streamlines response times, and improves communications for agency buyers and contractors. The Schedule allows suppliers to focus on agency statements of work, to speed the process of acquisitions,” he said.
Mentor-Protégé Program Delivers Small Business Opportunities
GSA’s Mentor-Protégé Program is designed to encourage and motivate GSA prime contractors to assist small businesses and enhance their performance on GSA contracts. The program is intended to foster the establishment of long-term relationships between small businesses and GSA prime contractors and increase the overall number of small businesses that receive GSA schedule awards. Under the Mentor-Protégé Program, eligible small businesses can act as suppliers or provide services or subcontractors for any prime contractor with an approved subcontracting plan negotiated with GSA. Protégé firms are selected by mentors, which can open new markets for their businesses, said Anthony Eiland, Program Manager of GSA’s Mentor-Protégé Program and Program Manager of Veterans Affairs Outreach Initiatives.
For firms that have never done business with GSA, this special program teaches them how GSA works and how to interact with other agencies, Eiland said. “Small businesses use this program to gain acceptance and viability as a contractor serving the needs of large federal agencies such as USDA,” he said.
Seven Benefits of Holding a GSA Schedule
1. Builds brand recognition by providing a ‘preferred vendor’ status.
2. Provides a door-opener into the government market.
3. Differentiates suppliers from non-Schedule vendors with same services and products.
4. Offers a multi-purpose contracting device.
5. Reduces contract time from solicitation to award. GSA has reported a reduction from 268 days under standard agency RFPs to 30 days under an IT Schedule 70 RFQ.
6. Increases the speed for the government to buy from industry partners. Saves time during the acquistion process.
7. Offers fastest and least expensive entry into public sector market.
- Source: GSA ITS
For mentors, the biggest benefit of the program is a strong sense of giving back, said William Jaffe, Senior Vice President and General Manager of Technical and Project Engineering LLC (TAPE), based in Alexandria, Va. TAPE is a mentor with one protégé. The company serves as a mentor to help smaller companies learn the ropes of selling through the GSA schedule. “Mentors typically start out seeking partner suppliers to fill out their small business set-aside requirement,” Jaffe said.
Gregory Olson, Associate Vice President of Operations at Catapult Technology Ltd., an IT services and management consulting firm based in Bethesda, Md., is a mentor to three protégé firms. “As a recent graduate of the 8(a) program, we are always seeking partners to build strategic teams that can help us meet agency small business/8(a) requirements,” he explained.
Customers and Industry Have Their Say
Customers and industry partners alike benefit from all that IT schedule 70 has to offer. Julia Lopez, Purchasing Manager of Applied Research Laboratories at the University of Texas at Austin, chose to purchase from GSA’s IT Schedule 70 because the approvalprocess was faster than seeking formal bids. The lab purchased custom configured high-performance servers and other IT equipment using the schedule program. “The beauty of GSA is the speed at which procurements can be approved without additional bidding,” said Lopez.
Discounted pricing was another incentive for UT Austin, along with pre-approved terms and conditions, which helps streamline the decision process for utilizing the program, she added. “I can count on solid service from the GSA Schedule holder to assist with an upgrade or reconfiguration if needed. I know he’ll stand behind his products with good customer service and support.”
In 2010, Hewlett-Packard did $500 million in business on the IT Schedule 70 contract, said Kitty Klaus, Senior Program Manager of GSA Programs for HP Enterprise Services. Klaus especially appreciates BPA programs due to the opportunity for long-term commitments with customers. “This allows us to work closely with government customers to provide the best possible pricing,” she explained.
With IT Schedule 70’s pre-established terms and conditions and fair and reasonable pricing, “we can focus more attention on the agency’s requirements in each schedule award,” she continued, adding that GSA eBuy is another key advantage because “we are able to see the RFQs from agencies all in one place.”
Ultimately the IT Schedule 70 program brings more competition and greater transparency to government acquisitions. “It’s a good value for customers, while also serving the needs of taxpayers,” Klaus said.
“I’m a big fan of the SmartBUY program,” said Roy Stephan, Vice President of Technology Solutions for Intelligent Decisions Inc., a Data at Rest (DAR) and situational awareness and incident response (SAIR) SmartBUY contract holder based in Ashburn, Va. Stephan is looking forward to more SmartBUY programs to help address the many regulations federal agencies must take into account during acquisitions. “GSA raises the bar for all industry partners by setting government-wide technical requirements in the SmartBUY program. This will ensure customers can quickly buy products and services that comply with known federal laws and regulations, without costly and redundant
acquisition evaluations,” he said.
John Keese, President of Autonomic a GSA cloud computing provider was first awarded a DAR, then a SAIR contract, and is now offering Infrastructure as a Service (IaaS) cloud computing on his roster of available solutions offered via the SmartBuy BPA program under IT Schedule 70. “SmartBuy BPAs help customers in federal, state and local governments to address key areas of concern regarding cyber security, and now cloud computing, by allowing them to purchase products and services that are pre-certified to meet stringent federal security requirements,” he said.
Particularly at the state and local government level, Keese said the key advantage of this program is avoiding a painful vetting process. States can now purchase a pre-vetted solution that complies with the Federal Information Security Management Act has been aggressively discounted to address government-wide requirements. “On their own, the states simply can’t achieve the same level of volume discounts they can find via the SmartBUY program,” he added.
– This report was commissioned by the Content Solutions unit, an independent editorial arm of 1105 Government Information Group, originally published at http://gcn.com/microsites/2011/gsa-schedule/4-industry-benefits-it-schedule-70.aspx.
July 22, 2011 by cs
In sports parlance, it’s known as going for the gold. The term also applies in government contracting, as more and more companies are seeking the gold to be found in the large federal indefinite-delivery, indefinite-quantity contract vehicles.
“Come July and August, the IDIQs light up like Christmas trees,” said Paul Strasser, senior vice president and general manager of Dynamics Research Corp.’s federal group. “There are task orders going out like crazy because, with the continuing resolutions, agencies are trying to spend the money they have allocated. The IDIQ has become by far the vehicle of choice. So you have to prepare.”
“The smarter smaller companies are looking at the vehicles earlier and seeing what resources it’s going to take to win,” said Mark Amtower, co-founder of the Government Market Master certificate program at the George Mason University School of Management and a Washington Technology contributor. “The large companies have two avenues. They can buy a company that owns the IDIQ or wait until the recompete and try to win it. However, there are no guarantees for the recompete.”
1. Consider M&A to open doors
Paul Bell, president of Dell Inc.’s Global Public and Large Enterprise sector, makes no bones that Dell is taking the mergers and acquisitions route.
He said Dell is still in the early stages of its M&A activity even though the giant hardware and services company has acquired nine companies in just 18 months.
“We think this has been a really good approach for Dell,” Bell said. “Our integration of our very biggest platform, Perot Systems, is going incredibly well compared to a lot of people’s experience in that [government provider] space.”
Dell’s marketing strategy is to serve its federal clients with the unified face of one company, Bell said. “That won’t change even if we add 25 more companies, which is likely in the coming years,” he said but declined to go into specifics about future M&A targets.
DRC’s capture strategy always includes IDIQ contracts. “If you’re not playing on certain IDIQ contracts, you’re really left out in the cold,” Strasser said.
Next: Focus on key markets
2. Focus on key markets
Strasser said DRC has been successful because it concentrates on its five core market segments: homeland security, health, cybersecurity, intelligence and Defense Department strategic programs, and financial and regulatory agencies.
Its IDIQ wins include the Internal Revenue Service’s Total Information Processing Support Services contract, General Services Administration’s Alliant contract, the Army’s Program Management Support Services and Homeland Security Department’s Enterprise Acquisition Gateway for Leading Edge Solutions (EAGLE) contracts.
Strasser said DRC identifies new targets at twice-yearly strategic planning sessions during which the company determines the government’s needs and its funding levels.
Company executives also attend independent analysis sessions and participate in a number of industry associations.
“We have people in key positions to not only be aware of changes in the industry, the legislation and how the money is being budgeted but also to sort of influence those [groups],” Strasser said.
DRC’s fastest-growing market is health care, an area in which the company had virtually no business just five years ago.
Next: Invest wisely in targeted sectors
3. Invest wisely in targeted sectors
Strategic investment discussions, off-site company assessments and peer reviews that began about five years ago led to action plans for DRC to target federal health care contracts.
“Today in the federal group that I manage, we’re going to do over $30 million this year in health-related services and solutions,” Strasser said.
As an example, he cited the $19 million Tricare Evaluation, Analysis, Management and Support, a Military Health System Category 2 acquisition contract that DRC won last year thanks to its management consulting expertise. DRC is helping the Walter Reed Army Medical Center manage its Base Realignment and Closure movement.
“We identified that [opportunity] three or four years ago,” Strasser said. “We said we’re committed to that market. We identified a vehicle we thought we had an opportunity to win. We put resources and investments against that to identify the capture of that vehicle. Once we won that vehicle we invested additional resources to pursue task order opportunities there.”
Although DRC does not have a chief medical officer, its staffing does include clinicians and doctors.
Next: Plan ahead
4. Plan ahead
About a year ago, American Systems Corp., which historically sought smaller contracting vehicles, introduced a plan to create a business development system and pursue some of the larger prime contacts, including IDIQs, President and CEO Bill Hoover said. “And the good news is we’ve actually followed through on that plan.”
Hoover said that after he joined the company in 2006, ASC instituted an infrastructure investment plan to strengthen its five key market targets: command, control, communications, computers, intelligence, surveillance and reconnaissance; acquisition and logistics; readiness; homeland security; and national intelligence.
“We also expanded our recruiting function significantly as well because we knew that was going to be important, too,” Hoover said.
“I would say that probably our back office, which really is the infrastructure side of the business, was probably about 60 or 70 people. And we’ve probably increased that by about 50 percent or so,” he said.
Another goal was to strengthen ASC’s capture management program and establish a project management office to oversee the company’s IDIQ contracts and meet the needed quick turnaround on task orders.
“Although the bulk of the investment was probably back in the 2006-2007 time frame, we continue to invest in our infrastructure to make sure that we can be as responsive as we can possibly be on these opportunities,” Hoover said.
Next: Hire the right people
5. Hire the right people
In addition, ASC is aggressively expanding its pipeline of individuals “so that we have a living and breathing database of candidates for a variety of opportunities in the focused business opportunity areas that we’re interested in pursuing,” he said.
ASC uses that database to strengthen its proposals whether it is pursuing an IDIQ or a large single-award prime contract. To keep the database current and growing, executives attend job fairs and conduct informational seminars.
“We have that database of [potential contract and current] employees that we can very quickly pull together because, on the IDIQ side, you have a very rapid turnaround of proposals, and we can then provide the résumés to go after those faster-turnaround opportunities,” Hoover said.
“We’re constantly looking for individuals with the requisite experience, the requisite customer focus, the requisite capabilities,” he said, adding that this is particularly true when going after an IDIQ or task order from the intelligence community in which background checks and security clearances are critical.
“The name of the game has changed with the government predominantly using some of the larger vehicles,” said Shiv Krishnan, chairman and CEO of Indus Corp., who recently hired Terry Fitzpatrick as vice president to oversee business development and growth.
Next: Build your infrastructure
6. Build your infrastructure
Indus emerged from the small-business program about 10 years ago and positioned itself to go after large contracts, including governmentwide acquisition contracts, known as GWACs, he said.
“If you do not bid on these GWACs, then you’re shut out of opportunities coming through those [awards] and those [represent] billions of dollars of opportunities for the next seven or 10 years,” Krishnan said.
Indus set up the infrastructure to compete for GWACs by meeting government requirements, such as having an earned value management system, a government-approved purchasing system, Capability Maturity Model Integration certification, and positive past-performance evaluations.
“You need to be positioned; you need to be close to the customer,” he said. That’s what Fitzpatrick’s business development team does two to three years in advance, Krishnan added.
Indus was successful in 2009 when it bid for a spot on the 10-year, $50 billion Alliant contract. “That was a feather in our cap and the beginning of our [capture] strategy,” Krishnan said.
For several years Indus tracked the planned EAGLE II, Network Centric Solutions II and National Institutes of Health’s 10-year, $20 billion Chief Information Officer — Solutions and Partners 3 awards. When they finally were announced in 2010, the company was ready to bid on all three, Krishnan said. The company also is adding health IT capabilities.
GWACs and agency-specific enterprisewide acquisition contracts have been popular, he said, because the government does the upfront work of selecting qualified contractors, and the competition to perform the task orders is limited only to those companies.
Next: A word of caution
A word of caution
However, Kevin Plexico, vice president of research and analysis services at Deltek Input., a market research and intelligence firm, cautions against relying too heavily on GWACs, including Alliant and NASA’s Solutions for Enterprise-Wide Procurement.
“We haven’t seen them trend up in five years,” he told a gathering of contracting executives last month. “They’ve been relatively flat while those agency-specific task order-based contracts have been taking off.”
“What we’re seeing is larger agencies are establishing their own task-order based contracts,” he said. “We see that all the military branches have moved this way.”
That trend is expected to continue, effectively reducing the number of prime contract opportunities, Plexico said.
For example, he said, about half of DHS’ IT services go through the EAGLE contract.
“If you don’t have a position on EAGLE, you can effectively think about your opportunity inside DHS as being limited to the other 50 percent that’s outside the EAGLE contract,” Plexico said.
In addition, the growth of task orders has greatly reduced the time frame in which to pursue them compared to the traditional 30-, 60- or 90-day response time for traditional requests for proposals.
Plexico said a Deltek Input study of about 11,000 task orders from 18 contract vehicles found that more than half of them required contractors to respond in less than two weeks.
“So this will challenge even the most agile of contracting and bid proposal organizations to respond,” he said. “This is fundamentally changing how companies are organizing their proposal organizations.”
– About the Author: David Hubler is the associate editor of Washington Technology. Published July 1, 2011 at http://washingtontechnology.com/articles/2011/07/05/cover-steps-to-big-contract-wins.aspx?s=wtdaily_050711
July 20, 2011 by cs
From 2005 to 2008, Maricopa County, Ariz., supplied bulk flour for its eight jails, which used 5.5 million pounds over the course of those three years. During that time, the price of bulk flour spiked from 16 cents per pound to 38.5 cents per pound. This price increase made sense to Maricopa County Procurement Supervisor Matt Bauer because the price of flour closely follows gas prices due to distribution costs. But in 2008, when gas prices plummeted from $4.25 per gallon in Arizona to less than $2 per gallon, the flour prices didn’t follow suit.
“I talked to a couple of vendors and they said that I was pretty much paying more than if I went to the grocery store,” Bauer says. Some vendors (other than his own) told him that if he rebid the contract, he could likely secure flour at 32 or 33 cents a pound. While six cents per pound really doesn’t sound like much, Bauer could save tens — if not hundreds — of thousands of dollars.
After attempting to negotiate with his vendor, he ultimately cancelled the contract and bid a new one through a different kind of procurement. Called a reverse auction, bidders attempt to outbid each other by providing a service or an item at a lower cost.
Done online, reverse auctions are creating significant cost savings in the public sector. In the nearly two years since Maricopa County began using reverse auction technology, it has saved more than $2 million on items like flour and peanut butter, to name a few. As more governments go online to try out reverse auctions, they’re realizing that the savings can be great, but it doesn’t mean savings are guaranteed.
There are a few reverse auction companies offering software and/or online services to governments, such as FedBid and BidSync. Using BidSync, for instance, agencies like Bauer’s define and upload their RFPs, RFQs and RFIs into the company’s online marketplace. If an agency is submitting a fairly complex RFP, it can search the online service to see if another department has something similar. If so, it can copy that RFP, modify it to fit the agency’s needs and post it.
If there are questions about the request, there’s an online business conference feature where the agency can post answers for everyone to see. The vendors and suppliers then submit their bids against that request.
Bidders’ offers can be viewed in real-time by the agency and their competitors. Typically most of the activity occurs in the last five to 10 minutes of the bid, says Shash Cates, product manager at BidSync. As suppliers make competing bids during the final minutes, additional time is added to the clock — five minutes per bid. This gives competitors another chance to bid lower. At the auction’s end, the system can tabulate all the bids based upon criteria the agency has determined in advance. The option and decision to award a bid is completely up to the issuing government agency.
In its first reverse auction, Maricopa County received its first flour bid on day one. It was for half a cent less than the contracted price of 38 cents per pound of flour. On the final day, with five hours left, the second bid came in at 34 cents per pound. By the end, there were four different bidders and eight total bids. The final bid came in at 20.5 cents per pound — a savings of nearly $1 million over three years for the county, Bauer says.
“From then on we just started trying out other things we thought would do well,” he says. “We did beans and we almost saved $400,000. We did inmate shoes and we saved about $30,000 or $40,000. We also did some on peanut butter — we buy a ton of peanut butter — and we saved $170,000.”
In a reverse auction, an agency doesn’t always choose the lowest bidder. For example, the lowest bid for a field roof coating project at Chase Field, home of Major League Baseball’s Arizona Diamondbacks, came in at $397,000. But Bauer says that after further assessment the county realized that the winning vendor couldn’t actually handle the job, so a company that bid around $500,000 actually won. (In the end, however, even that vendor didn’t work out. The entire contract had to be rebid — and not through a reverse auction. The ballpark decided to handle the rebid itself, Bauer says.)
This particular auction was a lesson for Bauer. Reverse auctions work best with commodities, but “not so well with things where you really have to worry about the quality,” he says. Commodities (like flour) work well because any flour vendor is going to offer the same product. When it comes to services, as was the case in the roof coating, specifications and quality of workmanship can differ.
The Connecticut Department of Administrative Services performed its first reverse auction in mid-June and had similar challenges. The department was going to purchase six payloaders (a type of tractor that the Department of Transportation uses) this year and six the following year. Four different bidders went from $133,000 to $115,000 on the contract. In the days following the auction, the department’s contract specialist evaluated the written responses in terms of these vendors’ qualifications and how they meet specifications.
“Unfortunately, our four bidders failed to meet the specs in a matter that was sufficient,” says Director of Procurement Services Carol Wilson, adding that the department will have to re-bid the contract and loosen up on some of the specifications. “It was a great exercise. We saw … how the auction works, but we learned how rigid the specifications that the Department of Transportation required, and how that can have a negative effect on the result.”
Despite initial challenges with reverse auctions, Maricopa County typically does about 10 to 12 of them each year, Bauer says. “Most of the time when we do these reverse auctions, we end up saving a significant amount of money,” he says, “especially with the food.”
– by Jessica B. Mulholland Governing Magazine – July 5, 2011 – at http://www.governing.com/topics/technology/reverse-auctions-help-agencies-save.html