6 keys — and a caveat — to winning bigger contracts
July 7, 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 7/1/2011 at http://washingtontechnology.com/articles/2011/07/05/cover-steps-to-big-contract-wins.aspx?s=wtdaily_060711
Will you win the contracts you need to survive 2011?
December 27, 2010 by cs
Be prepared for more competition, tighter margins and big opportunities for politically savvy, nimble-footed companies
The economy — and specifically the federal market — might seem stuck in dirge mode, but it is changing, in subtle, sometimes dissonant ways. And woe to the company that doesn’t alter its step to match the new tune.
To record and distill those changes, Washington Technology talked for several hours with four federal business gurus to create a chapbook for federal contracting in 2011.
Get any group of experts together, and differences of opinion and points of agreement will arise. So it was with our four: Ray Bjorklund, senior vice president and chief knowledge officer at FedSources Inc.; Philip Kiviat, partner at Guerra Kiviat Inc.; Kevin Plexico, senior vice president of research and analysis services at Input Inc.; and Warren Suss, president of Suss Consulting Inc.
On some points, such as opportunities for the big score, they were unanimous: It ain’t happening.
“We’re definitely seeing a shift away from large-scale, single-award contracts that are intended to build, develop or integrate something,” Plexico said.
“Most of the top opportunities in this year’s [Input top 20 opportunities for 2011] were multiple-award, indefinite-delivery, indefinite-quantity vehicles,” he added.
“Many of the contracts that have driven our community in past years have been the large single-award programs that companies around the Beltway are geared up to respond to,” Suss said. But “the world is going to change, and companies will need to come up with different models to respond to a larger number of small opportunities.”
“Fiscal 2011 will be the year of the task order,” Suss said.
Our gurus also gave politics a stronger new emphasis in their calculations.
“The most important thing I can say when I talk to IT people — who tend to view IT as the most important thing in the world because it’s changing everything — is that IT is important, but it’s not immune to the influence of politics,” Kiviat said.
The recent shift of power in the House will especially bear watching, Bjorklund said. “The White House submits a budget, but Congress does the appropriating,” he added.
And with the collective Republican eye on reducing the federal budget, “everything in IT contracting is a target for political scrimping,” Kiviat said.
“We’re already seeing fewer large procurements” as a result of the Office of Management and Budget’s suspension in June of new financial systems at major agencies, he said.
In September, OMB canceled upgrades at the Small Business Administration and Veterans Affairs Department and is trimming financial IT projects at the Environmental Protection Agency and Housing and Urban Development Department.
The Army’s Enhanced Army Global Logistics Enterprise (EAGLE) contract, set for award in the second quarter of fiscal 2011, has been touted as a $30 billion opportunity, subsuming five programs and about 200 other contracts.
“But when we added up what’s being spent on the contracts it’s replacing, we came up with more like $10 billion, which is still a lot of money,” Bjorklund said. “But it’s not $30 billion.”
EAGLE has a big IT component, although its emphasis is not on conventional IT, such as networks. The contracts that EAGLE replaces have research and development projects, but the new contract has no R&D component, Bjorklund pointed out in FedSources’ Army EAGLE Reality Check report.
OMB’s system slashing is an effort “to reduce the size of large programs, make them more manageable and reduce the risk of failure,” Kiviat said. But it also will contribute to less innovation, he said.
“Whenever you do anything large or innovative, you increase risk,” he said. “Democrats did try to increase innovation, which means increasing risk-taking — what’s the saying? If you’re not failing, you’re not trying hard enough.”
However, Kiviat added, “failures could well be fodder for political grandstanding, so agencies will tend to put themselves up as targets less often, which means less innovation. That’s bad for contractors, especially those companies that are innovators. It will also take people who are interested in innovation and make them look elsewhere: in the commercial market.”
Bad, Getting Worse
To recap for a moment, we’ve got fewer single, big-dollar opportunities, politics stirring the pot more than ever before, trimmed budgets and less risk-taking. Look for those trends to alter the competitive landscape, put pressure on established federal market players and create openings for new ones.
Together with the general pinch and sag of the U.S. and global economies, “overall contract spending dropping by 4.8 percent,” Bjorklund said. “Whenever that happens, many new interests flock to federal government contracts, believing they’re going to be the saving grace for their business.”
Not all will succeed. “Particularly in the federal space, there are steep barriers to entry,” Plexico said. “But once you’re in, you have the credibility you need for agencies to spend contracting dollars.”
Many of the large IDIQ contracts, from the General Services Administration’s $65 billion Alliant to the Centers for Disease Control and Prevention’s $5 billion CDC Information Management Services, have already been awarded.
Contracts that are still to be awarded, in addition to EAGLE, include the Health and Human Services Department’s $30 billion CIO-Solutions and Partners 3 and the Defense Department’s $15 billion DOD Language Interpretation and Translation Enterprises.
Getting on those contracts guarantees nothing. But whether new to the federal market or an old hand, getting on them “is important from a positioning point of view,” Plexico said. “Take an agency like the Homeland Security Department, which may do 40 percent of its work through [DHS' Enterprise Acquisition Gateway for Leading Edge Solutions contract]. If you’re not on EAGLE, you don’t have the opportunity to compete.”
But even when the contract is in place and the money ostensibly is there, it can disappear.
“Companies are going to have to be much more careful in qualifying prospects,” Kiviat said. “It’s not just about: Are the dollars there? But will they stay there? Some already planned procurements may be canceled because of the unknown emphasis of what Republicans will do.”
Take OMB’s halting and trimming of financial system modernization projects, he said. “That could happen to any large enterprisewide modernization project. Say an agency says it wants to modernize human resources management in all its subagencies. The question a contractor has to ask is: Will that project withstand congressional oversight, or could it get frozen?”
Agencies will be showing up not only with smaller purses but also with bigger demands, including tighter margins and greater use.
“DOD wants to avoid having military organizations develop their own systems,” Suss said. “They want to be able to invest once in a new utility or capability, then allow its use many times by all DOD users. For example, the Army, rather than go with its own enterprise e-mail systems just handed over [that acquisition] to DISA.”
The increased competition and decreased budgets will help ensure that big protests will continue. The lack of a government acquisition workforce that is large enough and experienced enough will contribute to protests.
“Take the recent protest by Google over the Interior Department contract, which mandated use of Microsoft software,” Kiviat said. “Everyone in procurement knew that protest was coming. As long as you have acquisition people who do something like that and don’t figure out how to do deal with it beforehand, you’ll continue to have protests.”
Transform Yourself
Once hardware-heavy, contracts increasingly are shifting to services — by 50 percent during the past four to five years, according to Input.
“When contracts were for hardware, all you’d have to do was deliver it. You didn’t even have to know what it did,” Kiviat said. “In services, it’s important to know what they need to have done and how to do it.”
For those companies that know that, there will be more opportunities for providing managed services at a fixed price, Suss said. A shift to cloud-based services “will drive companies to make more upfront investments in infrastructure and technology before realizing a return,” he said. “That may create a significant disequilibrium in the federal environment.”
Thinking about cloud must go beyond the hype, beyond the buzzwords to be a viable technology for government, Plexico said. “Agencies — and contractors hoping to win their business — have to ask themselves: What’s the agency’s exit strategy for dealing with sensitive data if there’s an incident?”
It’s also “going to require a different bidding model than the current [time-and-materials] model,” Suss said. “In this new environment, shops will have to deliver quick turnarounds on proposals,” a feat not all companies will be able to pull off.
More than ever before, success in the federal market will require a defined goal and an informed strategy for attaining it, our experts said.
“Big companies sometimes have a strategy,” Kiviat said. “Small companies don’t have them; they just fight each battle as it comes up. This is time for some strategic thinking, no matter what size you are.”
With so many potential pitfalls, it’s important to keep your sense of perspective, Plexico said. “The federal space is still a healthy and vibrant market as compared to the rest of the economic environment.”
Here also, our experts found agreement. The status quo is transitory, existing only for an instant and not to be confused with a promise.
“There are going to be losers,” Suss said. “Some companies that are in business now won’t be able to stay in business next year.”
But when a window closes, a door opens. “It’s going to create a fertile ground for mergers and acquisitions, and I think we’ll see an increase in that area,” Suss said.
Will you win the right contracts to survive 2011?
November 15, 2010 by cs
Be prepared for more competition, tighter margins and big opportunities for politically savvy, nimble-footed companies.
The economy — and specifically the federal market — might seem stuck in dirge mode, but it is changing, in subtle, sometimes dissonant ways. And woe to the company that doesn’t alter its step to match the new tune.
To record and distill those changes, Washington Technology talked for several hours with four federal business gurus to create a chapbook for federal contracting in 2011.
Get any group of experts together, and differences of opinion and points of agreement will arise. So it was with our four: Ray Bjorklund, senior vice president and chief knowledge officer at FedSources Inc.; Philip Kiviat, partner at Guerra Kiviat Inc.; Kevin Plexico, senior vice president of research and analysis services at Input Inc.; and Warren Suss, president of Suss Consulting Inc.
On some points, such as opportunities for the big score, they were unanimous: It ain’t happening.
“We’re definitely seeing a shift away from large-scale, single-award contracts that are intended to build, develop or integrate something,” Plexico said.
“Most of the top opportunities in this year’s [Input top 20 opportunities for 2011] were multiple-award, indefinite-delivery, indefinite-quantity vehicles,” he added.
“Many of the contracts that have driven our community in past years have been the large single-award programs that companies around the Beltway are geared up to respond to,” Suss said. But “the world is going to change, and companies will need to come up with different models to respond to a larger number of small opportunities.”
“Fiscal 2011 will be the year of the task order,” Suss said.
Our gurus also gave politics a stronger new emphasis in their calculations.
“The most important thing I can say when I talk to IT people — who tend to view IT as the most important thing in the world because it’s changing everything — is that IT is important, but it’s not immune to the influence of politics,” Kiviat said.
The recent shift of power in the House will especially bear watching, Bjorklund said. “The White House submits a budget, but Congress does the appropriating,” he added.
And with the collective Republican eye on reducing the federal budget, “everything in IT contracting is a target for political scrimping,” Kiviat said.
“We’re already seeing fewer large procurements” as a result of the Office of Management and Budget’s suspension in June of new financial systems at major agencies, he said.
In September, OMB canceled upgrades at the Small Business Administration and Veterans Affairs Department and is trimming financial IT projects at the Environmental Protection Agency and Housing and Urban Development Department.
The Army’s Enhanced Army Global Logistics Enterprise (EAGLE) contract, set for award in the second quarter of fiscal 2011, has been touted as a $30 billion opportunity, subsuming five programs and about 200 other contracts.
“But when we added up what’s being spent on the contracts it’s replacing, we came up with more like $10 billion, which is still a lot of money,” Bjorklund said. “But it’s not $30 billion.”
EAGLE has a big IT component, although its emphasis is not on conventional IT, such as networks. The contracts that EAGLE replaces have research and development projects, but the new contract has no R&D component, Bjorklund pointed out in FedSources’ Army EAGLE Reality Check report.
OMB’s system slashing is an effort “to reduce the size of large programs, make them more manageable and reduce the risk of failure,” Kiviat said. But it also will contribute to less innovation, he said.
“Whenever you do anything large or innovative, you increase risk,” he said. “Democrats did try to increase innovation, which means increasing risk-taking — what’s the saying? If you’re not failing, you’re not trying hard enough.”
However, Kiviat added, “failures could well be fodder for political grandstanding, so agencies will tend to put themselves up as targets less often, which means less innovation. That’s bad for contractors, especially those companies that are innovators. It will also take people who are interested in innovation and make them look elsewhere: in the commercial market.”
Bad, Getting Worse
To recap for a moment, we’ve got fewer single, big-dollar opportunities, politics stirring the pot more than ever before, trimmed budgets and less risk-taking. Look for those trends to alter the competitive landscape, put pressure on established federal market players and create openings for new ones.
Together with the general pinch and sag of the U.S. and global economies, “overall contract spending dropping by 4.8 percent,” Bjorklund said. “Whenever that happens, many new interests flock to federal government contracts, believing they’re going to be the saving grace for their business.”
Not all will succeed. “Particularly in the federal space, there are steep barriers to entry,” Plexico said. “But once you’re in, you have the credibility you need for agencies to spend contracting dollars.”
Many of the large IDIQ contracts, from the General Services Administration’s $65 billion Alliant to the Centers for Disease Control and Prevention’s $5 billion CDC Information Management Services, have already been awarded.
Contracts that are still to be awarded, in addition to EAGLE, include the Health and Human Services Department’s $30 billion CIO-Solutions and Partners 3 and the Defense Department’s $15 billion DOD Language Interpretation and Translation Enterprises.
Getting on those contracts guarantees nothing. But whether new to the federal market or an old hand, getting on them “is important from a positioning point of view,” Plexico said. “Take an agency like the Homeland Security Department, which may do 40 percent of its work through [DHS' Enterprise Acquisition Gateway for Leading Edge Solutions contract]. If you’re not on EAGLE, you don’t have the opportunity to compete.”
But even when the contract is in place and the money ostensibly is there, it can disappear.
“Companies are going to have to be much more careful in qualifying prospects,” Kiviat said. “It’s not just about: Are the dollars there? But will they stay there? Some already planned procurements may be canceled because of the unknown emphasis of what Republicans will do.”
Take OMB’s halting and trimming of financial system modernization projects, he said. “That could happen to any large enterprisewide modernization project. Say an agency says it wants to modernize human resources management in all its subagencies. The question a contractor has to ask is: Will that project withstand congressional oversight, or could it get frozen?”
Agencies will be showing up not only with smaller purses but also with bigger demands, including tighter margins and greater use.
“DOD wants to avoid having military organizations develop their own systems,” Suss said. “They want to be able to invest once in a new utility or capability, then allow its use many times by all DOD users. For example, the Army, rather than go with its own enterprise e-mail systems just handed over [that acquisition] to DISA.”
The increased competition and decreased budgets will help ensure that big protests will continue. The lack of a government acquisition workforce that is large enough and experienced enough will contribute to protests.
“Take the recent protest by Google over the Interior Department contract, which mandated use of Microsoft software,” Kiviat said. “Everyone in procurement knew that protest was coming. As long as you have acquisition people who do something like that and don’t figure out how to do deal with it beforehand, you’ll continue to have protests.”
Transform Yourself
Once hardware-heavy, contracts increasingly are shifting to services — by 50 percent during the past four to five years, according to Input.
“When contracts were for hardware, all you’d have to do was deliver it. You didn’t even have to know what it did,” Kiviat said. “In services, it’s important to know what they need to have done and how to do it.”
For those companies that know that, there will be more opportunities for providing managed services at a fixed price, Suss said. A shift to cloud-based services “will drive companies to make more upfront investments in infrastructure and technology before realizing a return,” he said. “That may create a significant disequilibrium in the federal environment.”
Thinking about cloud must go beyond the hype, beyond the buzzwords to be a viable technology for government, Plexico said. “Agencies — and contractors hoping to win their business — have to ask themselves: What’s the agency’s exit strategy for dealing with sensitive data if there’s an incident?”
It’s also “going to require a different bidding model than the current [time-and-materials] model,” Suss said. “In this new environment, shops will have to deliver quick turnarounds on proposals,” a feat not all companies will be able to pull off.
More than ever before, success in the federal market will require a defined goal and an informed strategy for attaining it, our experts said.
“Big companies sometimes have a strategy,” Kiviat said. “Small companies don’t have them; they just fight each battle as it comes up. This is time for some strategic thinking, no matter what size you are.”
With so many potential pitfalls, it’s important to keep your sense of perspective, Plexico said. “The federal space is still a healthy and vibrant market as compared to the rest of the economic environment.”
Here also, our experts found agreement. The status quo is transitory, existing only for an instant and not to be confused with a promise.
“There are going to be losers,” Suss said. “Some companies that are in business now won’t be able to stay in business next year.”
But when a window closes, a door opens. “It’s going to create a fertile ground for mergers and acquisitions, and I think we’ll see an increase in that area,” Suss said.
– By Sami Lais – Washington Technology magazine – Nov. 10, 2010 – About the Author: Sami Lais is a special contributor to Washington Technology.
Despite a rocky start, sales on GSA’s Alliant contract top $1.2 billion
September 17, 2010 by cs
After a troubled start, officials at the General Services Administration said they are pleased with first-year sales on the signature multibillion-dollar contract federal agencies can use to buy information technology services.
Alliant, which GSA launched on May 1, 2009, has posted $1.2 billion in sales as of Sept. 3, for fiscal 2010. The agency expects sales to jump at least $2 billion when it awards contracts to companies supporting the construction of the Homeland Security Department’s National Capital Region headquarters in Washington.
“Sales are going very well,” said Casey Kelley, director of GSA’s enterprise governmentwide acquisition contract Center West, which manages Alliant.
The program, which initially was scheduled to kick off in 2007, had a slow start. In March 2008, a federal judge ruled in favor of a protest filed by eight companies that submitted unsuccessful bids for the original Alliant contract, saying GSA had been “arbitrary and capricious” in making awards to 29 companies. Agency procurement specialists reworked the contract and a year later gave 59 companies a chance to sell their wares through the contract. Alliant has a $50 billion ceiling and options to operate for 10 years.
Since the program went live, GSA awarded 66 task orders, with many more expected before the end of the fiscal year, Kelley said. In September 2009, for example, Alliant filled 13 contracts.
Of the 66 orders, 48 were for the Defense Department. The department accounted for $1 billion of the $1.2 billion in sales, with about $660 million of that for the Air Force, Kelley said.
GSA managers said they were pleased with sales, given the contract’s turbulent start. “We overcame a lot of challenges,” Kelley said. “There was a lot of undeservedly negative [media coverage] with the contract.”
Of the 59 vendors on the contract, 29 have been issued at least one task order. “We never expected all 59 to bid on every acquisition that comes up,” said Mike O’Neill, director of the GSA GWAC program. “Each decides what they go after. We provide them a level playing field to compete.”
“We’re very pleased with the diversity of those Alliant clients that have won,” Kelley added.
Some vendors also are pleased with the business Alliant has afforded them. “It’s been fantastic, better than expected,” said David MacRae, executive vice president of Smartronix, a global solutions provider.
As a midtier company, Smartronix is lost when competing against larger companies, according to MacRae. He said the company has won six task order awards on Alliant and GSA has been “really getting the word out” for smaller companies.
Although Alliant’s first-year sales are slightly off the pace to reach the $50 billion ceiling over 10 years, GSA expects the contract to grow. But the “proof is in the pudding,” O’Neill said. “They have proved the ability to provide competitive solutions in a way that undermines risk.”
Kelley said he wouldn’t be surprised if Alliant’s sales exceeded a total of $6 billion by its second year anniversary, May 1, 2011.
GSA seeks better prices, easier customer interface with IT procurement
July 27, 2010 by cs
The General Services Administration expects its information technology portfolio to grow as it launches initiatives to improve pricing and customers’ experience, according to the agency’s new Federal Acquisition Service chief.
“We’re really revamping all of our systems to add value to the way we do business and our customers,” Steve Kempf, who on Tuesday was named permanent FAS commissioner, said in a recent interview with Nextgov.
Just over a year after its launch, Alliant, GSA’s $50 billion governmentwide IT contract, exceeded $1 billion in task order awards this month. Alliant replaces the ANSWER and Millennia programs, which expired in 2009, and aims to be the largest and most comprehensive vehicle for procuring IT services in the federal government. The companion $15 billion Alliant Small Business contract recently surpassed $400 million in sales.
Industry analysts have said one challenge GSA faces is declining interest in Schedule 70, on which technology equipment and services are sold. Federal agencies often are reluctant to give up control of acquisitions so important to their daily operations and historically have held on to their own procurement operations, said Warren Suss, president of Suss Consulting. There’s some question as to whether they can entrust the “keys to the kingdom” to GSA, he added.
“In the end, it’s really on GSA’s shoulders to make the business case, to make the value proposition, to demonstrate that they can operate more efficiently, more effectively, nimbly, responsively than agencies themselves,” said Suss.
Kempf said despite flat interest in Schedule 70, he still considers GSA the dominant player in the IT market, with nearly $20 billion in sales across its technology portfolio. Alliant has produced a lot of interest and competition, he added.
“There’s some forecast that IT spending will be down,” said Kempf. “It’s an opportunity for GSA to be successful, to look at things like federal strategic sourcing in helping [agencies] meet budgetary constraints.”
Other areas for growth are in GSA’s new commercial satellite communications program, a $10 billion contract to provide satellite services to civilian and defense agencies, and a blanket purchase agreement for cell phone services that meet governmentwide requirements. Kempf said GSA also is working on a number of initiatives to make it easier for customers to use its purchasing vehicles. For example, customer-facing tools such as GSA Advantage soon will look and feel more commercial with improved product descriptions, images and price comparison tools. The agency also is looking to roll out training programs to help customers use Web tools and find answers in real time.
GSA’s massive Networx program has been under scrutiny in recent months as lawmakers and industry representatives question agencies’ slow transition to the new $68 billion telecommunications contract. Delays are costing the government millions each month, critics said. According to Suss, the transition’s momentum has picked up and is getting more attention and support from stakeholders.
“They’re over the hump in terms of getting agencies’ attention, but there’s still a lot of work to be done to get there,” he said. “In one way, it’s a huge deal because it’s a huge contract, and it’s at the heart of the government’s information technology. On the other hand, it’s the third iteration of the contract and well-established from a technical point of view. Agencies have a clear idea of where they need to go.”
Agencies must transition to Networx by June 2011, when predecessor FTS 2001 expires. GSA estimates the process is nearly 60 percent complete, and Kempf said he expects to be close to meeting the transition deadline.
Federal IT contract passes $1 billion mark
July 21, 2010 by cs
A major contract the federal government uses to procure multiple IT products and services has surpassed the $1 billion mark in task orders.
Alliant, a 10-year government-wide acquisition contract (GWAC) introduced in 2007 with a $50 billion ceiling, reached the milestone faster than other GWACs that preceded it, the Answer and Millennia contracts, according to a blog post by Edward O’Hare, assistant commissioner of the General Service Administration’s federal acquisition service office of integrated technology services.
GWACs are multiple-award, indefinite delivery, and indefinite quantity contracts that allow the government to purchase IT products and services without having to go through the competition process normally required of government procurement. The government began using them as a way to cut acquisition costs and streamline the process.
In his post, O’Hare cited several reasons he thinks Alliant has achieved $1 billion faster than some other contracts of its kind.
He said the contract is used by all Department of Defense (DoD) branches as well as many civilian agencies, including the Department of Homeland Security and the State Department.
Moreover, 24 of 59 prime contractors have won awards on 45 task orders through Alliant, with the GSA receiving an average of four bids per task order and no protests about unfair practices, O’Hare said.
Some of the federal government’s largest and most innovative IT projects — such as smart buildings — use Alliant, he added.
O’Hare acknowledged that there been concerns raised by industry groups about duplicative GWACs that actually end up costing the government money and resources rather than being more cost-effective.
However, O’Hare said that GWACs benefit companies who feel compelled to bid on as many government contracts as possible, because the all-inclusive nature of the contracts saves tens of thousands in bidding costs. This benefit, in turn, is returned to the federal government.
“These costs are not just the ‘cost of doing business’; they are passed on to the government and eventually to the taxpayer,” he said. “I don’t see how that benefits anyone in the long run.”
– by Elizabeth Montalbano, InformationWeek - July 12, 2010
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=225702919