A former Army Corps of Engineers employee has pleaded guilty to charges of bribery and conspiracy in one of the most brazen corruption schemes in federal contracting, according to court documents.
As part of the plea agreement, Michael Alexander, a former program manager at the Army Corps, has agreed to plead guilty to bribery and conspiracy to launder money from the government, according to records filed Jan. 24.
The three others indicted in the case, Kerry Khan, another former Army Corps program manager, Lee Khan, his son, and Harold Babb, formerly the director of contracts at Eyak Technology, have pleaded not guilty in the case. They were arrested and arraigned Oct. 4.
Two officials with an EyakTek subcontractor—Nova Datacom—have already pleaded guilty, according to the Associated Press.
The indictment alleges bribery, conspiracy and unlawful kickbacks valued at $20 million dollars. The two Army Corps employees allegedly steered a $780
million contract to a government contractor. They are accused of conspiring to hide the money through a series of financial transactions on the Army Corps’
Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER) contract.
When announcing the indictment in October, U.S. Attorney Ronald C. Machen Jr. described the alleged activity as “one of the most brazen corruption schemes in the history of federal contracting.”
About the Author:
Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Jan. 26,
2012 at http://washingtontechnology.com/articles/2012/01/26/army–corps-engineers-employee-guilty.aspx?s=wtdaily_270112.
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The Obama administration might be embracing fixed-priced contracts as the preferred method for purchasing goods and services from the private sector, but that strategy is not necessarily being implemented by the Army.
During a speech on Wednesday to service contractors, Malcolm O’Neill, assistant Army secretary for acquisition, logistics and technology, offered a surprisingly frank critique of fixed-price contracts.
“There is risk when you take something fixed-price,” O’Neill told members of the Professional Services Council, an industry trade association. “But my experience has been that when you offer a fixed-price bid, it’s 10 percent to 15 percent more than you need.”
O’Neill’s office often has argued against using fixed-price awards because of the belief that contractors build a cushion into their bids to compensate for the potential risks that occur during the length of a contract.
The Army wants the contractor to share the risk using more cost-plus, incentive-based contracts in which the vendor is rewarded for coming in ahead of schedule and potentially punished, through the loss of award fees, for delays. Cost-type contracts also can be more easily modified if the government’s requirements change, O’Neill said.
The Obama administration has repeatedly classified cost-plus contracts as “high risk,” lumping them in with time-and-materials contracts and sole-source awards. The Office of Federal Procurement Policy has encouraged agencies to cut by 10 percent their use of each of the three contract types.
Recent data, however, suggest that agencies’ use of cost-plus contracts actually has gone up. While agencies have cut their spending on time-and-materials contracts — considered the highest risk to taxpayers because of the potential for escalating costs — most of those contracts were converted to cost-reimbursement vehicles rather than fixed-price contracts, OFPP Administrator Daniel Gordon said last month.
O’Neill said he has received no direction from the Pentagon or the White House to use fixed-price contracting when he thinks it’s inappropriate. In some instances, he has counseled against fixed-price contracts because the Army’s estimated costs were 20 percent less than the lowest offer. He described the dichotomy as “should cost versus would cost.”
In a brief presentation, O’Neill stressed the principles of the Defense Department’s ongoing efficiency initiative to save money through reducing overhead costs, improving business practices — including more contract competition — and eliminating troubled programs.
“We have every reason to do our jobs better,” O’Neill said. “If I can do the job of 10 people with eight people, that makes me feel good.”
The funds saved from the efficiency initiative will largely be reinvested in the warfighter, Defense officials have said. The ultimate goal is a 2 percent-to-3 percent net annual growth in warfighting capability without a commensurate budget increase.
O’Neill said contractors will play a critical role in helping reach that goal. “You have got to play shortstop on our team,” he said.
The Army, for its part, recently completed a study that looked at contract requirements, overall funding and acquisition policies. The resulting plan, which eventually will be made public, now is being reviewed by Pentagon leadership.
– by Robert Brodsky – GovExec.com – March 9, 2011
In an about-face, the Army has suspended all of its ongoing insourcing activities, potentially savings thousands of private sector positions.
In a Feb. 1 memorandum, Army Secretary John McHugh announced he was halting the service’s insourcing initiative immediately in favor of a scaled-back approach in which his office would have to directly approve projects.
“In an era of significantly constrained resources, the Army must approach the insourcing of functions currently performed by contract in a well-reasoned, analytically based and systemic manner, consistent with law and prevailing presidential and Department of Defense guidance,” McHugh wrote in the memo, released on Thursday by the Professional Services Council, an industry group that has opposed plans to bring contractor jobs back in-house.
The memo suspends all ongoing insourcing transitions, but does not reverse efforts that already have been completed.
Army spokeswoman Anne Edgecomb said the memo is not intended to stop insourcing altogether but to ensure that the process is conducted responsibly and deliberately. “We are trying to make sure we do everything we can to be fiscally responsible,” Edgecomb said. “We see the writing on the wall.”
Edgecomb did not have figures immediately available on the number of contractor positions the policy change would effect.
The Defense Department’s insourcing program leader said on Thursday that the Pentagon did not direct Army to change its policy.
“The department is committed to meeting its statutory obligations under Title 10 to annually review its contracted services, identifying those that are inappropriately being performed by the private sector and should be insourced to government performance,” said Thomas Hessel, a senior manpower analyst in the Office of the Undersecretary of Defense for Personnel and Readiness, in a statement to Government Executive. “This includes services that are inherently governmental or closely associated with inherently governmental in nature; provide unauthorized personal services; or may otherwise be exempted from private sector performance … While some contracted services may be identified for insourcing, some services determined to be no longer required or of low priority may be eliminated or reduced in scope while others will continue to be provided by the private sector.”
All future insourcing proposals, McHugh wrote, must include “at minimum, a manpower requirements determination, an analysis of all potential alternatives to the establishment of permanent civilian authorizations to perform the contracted work, certification of fund availability and a comprehensive legal review.”
Thomas Lamont, assistant secretary of the Army for manpower and reserve affairs, along with Mary Sally Matiella, assistant secretary of the Army for financial management and comptroller, will be responsible for developing criteria to evaluate the efficiencies generated from the policy change, McHugh said.
Contractor groups, which have long criticized the Defense Department’s insourcing plans as driven by quotas and lacking any verifiable cost savings, applauded the development.
“Secretary McHugh is taking the right approach to insourcing,” PSC President Stan Soloway said. “We have said all along that all sourcing decisions for clearly commercial work — whether insourcing or outsourcing — must be done strategically with the best interests of the government mission and American taxpayer in mind.”
John Palatiello, president of the Business Coalition for Fair Competition, a group formed to challenge the Obama administration’s insourcing plans, said the memo is proof the initiative has been poorly executed.
“BCFC renews its call for a governmentwide moratorium on insourcing until common-sense standards and metrics for assuring that any insourcing is in the taxpayers’ interests, does not increase unemployment, and is focused on statutorily defined inherently governmental activities, not commercial activities,” Palatiello said.
The memo comes only a few weeks after the Government Accountability Office reported the Army had identified more than 4,200 full-time jobs in which contractors are performing either inherently governmental or unauthorized personal services. In both the inherently governmental and the unauthorized personal services contracts, the Army typically would be required to bring those functions back in-house.
Defense Secretary Robert Gates announced in August 2010 that the Pentagon was implementing a fiscal 2011 billet freeze and halting its insourcing plans because of a lack of cost savings. But, the plan affected only civilian agencies and offices. The military services were exempt from the freeze, allowing them to continue with their insourcing plans.
Soloway called on the other military services to follow the Army’s approach. “Through such a process the Army, DoD and the taxpayer will gain vital insight into the total life-cycle costs associated with these decisions, the degree to which they address the Army’s workforce needs, and more,” he said. “We hope, as they say, the Army leads the way.”
– by Robert Brodsky - GovExec.com - February 3, 2011
Filed under GTPAC News · Tagged with 8(a), Air Force, Army, DoD, government contract training, government contracting, GSA, HUBZone, Interior Dept., Marines, market research, marketing, MBDA, parity, SBA, small business, woman owned business
In the next few weeks and months there are many government-sponsored conferences being held to attract small businesses to, and inform small businesses of, government agencies’ upcoming contracting opportunities.
Toward the end of this article, you’ll see a list of many government-related vendor conferences coming up, along with details on how to register.
But before jumping right into that list, the Georgia Tech Procurement Assistance Center (GTPAC) suggests you take a few preparatory steps. After all, it’s important that you make a sound decision about whether it’s worth the time, effort, and expense to attend a particular vendor conference.
First of all, small businesses should make no mistake about it: government agencies may need you more than you need them. Federal agencies are under the gun to ensure that small businesses — including 8(a) firms, companies in HUBZones, service disabled veteran owned small businesses, and others such as women-owned businesses at the subcontract level — get their share of the “contract spend.”
(Keep in mind that this is especially true as the federal government nears the end of its fiscal year — Sept. 30th of each year. Contracts must be obligated by that date, or agencies lose those budgeted funds. In addition to spending by that date, often there’s also a rush to meet small business goals.)
All this is why agencies host conferences — to demonstrate that they are reaching out to the small business community.
Does that mean that you should attend as many governmental vendor conferences as you can, and that by attending, contracts will begin to fall in your lap? Hardly.
From GTPAC’s perspective, government-sponsored vendor conferences run the gamut in value. Some are well-organized, featuring details on specific, upcoming opportunities as well as access to the decision-makers. Other conferences, however, can be disappointing, consisting of little more than “a dog and pony show.”
So how do you select a good conference to attend? How do you reduce the risk that you’ll be attending a conference that has little value to you?
There are several things you should do before deciding to go to a government-sponsored vendor event. Here is a checklist:
1. Research the conference sponsoring agency’ s forecasted contract opportunities. Look for the sponsoring agency’s annual procurement forecast on that agency’s website. Use www.google.com/unclesam and type in the name of the federal agency and “procurement forecast.” (If that search fails to produce the results you need, check https://www.acquisition.gov/comp/procurement_forecasts/index.html.) One thing for sure, before you attend an event, you want to make sure the sponsoring agency buys what you sell.
2. Find out what contract opportunities will be the subject of the conference. Even if an agency buys what you sell, you’ll want to make sure that will be the focus of the conference. Look in the conference announcement — see if the agency identifies specific goods and services that will be the focus of the conference. Are the NAICS codes for future contracts identified, and do they match-up with yours?
3. Determine whether you’ll get access to decision-makers. Look for opportunities to meet one-on-one with the people who make the buying decisions. Good vendor conferences will provide you with the opportunity to meet, on an appointment basis during the event, with agency contracting officials. See if you can make appointments as a part of the registration process or whether such opportunities exist on-site at the event. Think outside the box: If you arrive early — or stay late — will you be able to spend time with the people who award contracts?
4. Once you select a conference, prepare yourself. Remember, only one-third of the “action” occurs at the event itself. You should spend the first third of your time preparing to attend. And another third should be spent in follow-up, after the event. If you are not prepared to make this much of an investment of your time, maybe you shouldn’t attend. To help you prepare, attend, and follow-up, we recommend you read our detailed article at: http://gtpac.org/2010/05/14-tips-for-attending-a-government-expo-or-trade-show. Your GTPAC Counselor will be glad to elaborate on this topic and provide you with additional advice. You can find our contact information right here.
Now, what you have been waiting for: The information about upcoming government vendor shows. Here they are:
2011 Conferences
- NAVSEA Small Business Conference – February 1, 2011 – Miami, FL – Details at http://www.sbconference.org/.
- Small Business Dynamics and Job Creation: Facts, Obstacles and Best Practices – February 2, 2011 - Atlanta, GA – Details at: http://contractingacademy.gatech.edu/2011/01/tech-hosts-small-business-forum-feb-2/.
- USDA Forest Service A&E Business Opportunities Briefing – February 9, 2011 – Atlanta, GA – Details available at http://gtpac.org/2010/12/learn-about-architectural-engineering-services-needed-by-the-forest-service.
- Model Based Enterprise (MBE) Supplier Education & Training Summit - February 22, 2011 – Hunstville, AL - Details at: http://model-based-enterprise.org/MBE-Events/default.aspx.
- Small Business Speed Partnering – February 22, 2011 - Albany, GA - http://gtpac.org/2011/02/want-to-meet-with-government-buyers-albany-ga-is-the-place-to-be-on-feb-22nd/
- Southeastern Regional Matchmaking Event – February 24, 2011 – Miami, FL – Details at: http://www.businessmatchmaking.com/regionMia.shtml.
- Public Health Preparedness Summit – February 22-25, 2011 – Atlanta, GA – Details at: http://www.phprep.org/2011.
- Greening the Supply Chain Listening Session – March 17, 2011 – Atlanta, GA – http://gtpac.org/2011/03/greening-the-supply-chain-listening-session-scheduled-mar-17/
- US Army Corps of Engineers 3rd Annual Regional Service Disabled Veteran & Small Business Conference – March 22-23, 2011 – Atlanta, GA – http://gtpac.org/2011/03/corps-of-engineers-announces-design-construction-conference/
- Jobs Act Tour – March 30, 2011 – Atlanta, GA – http://gtpac.org/2011/03/jobs-act-tour-coming-to-atlanta-on-mar-30/
- “Getting Back to Business” Atlanta Small Business Procurement Industry Fair – April 13, 2011 – Atlanta, GA – http://gtpac.org/2011/03/gsa-and-health-human-services-host-industry-fair-april-13th/
- US DOT OSDBU Small Business Summit – April 20-21, 2011 – Washington, DC – https://www.fbcinc.com/osdbu/default.aspx
- U.S. Environmental Protection Agency’s Small Business Conference - April 27, 2011 – Decatur, GA – http://gtpac.org/2011/03/epa-to-hold-small-business-event-april-27th/
- GSA Training Conference and Expo 2011 – U.S. General Services Administration’s Annual Expo – May 10, 2011 – San Diego, CA – Details at: http://www.expo.gsa.gov/ (Copies of the proceedings from the May 2010 GSA Expo in Orlando, FL may be found at: http://208.112.78.139/gsaSchedule2010/admin/display.cfm.)
- Warner Robins Air Logistics Center Small Business Outreach Event – June 22, 2011 – Warner Robins, GA – Details to be announced.
- DLA Enterprise Supplier Conference & Exhibition – June 27-30, 2011 – Columbus, OH – https://www.fbo.gov/index?s=opportunity&mode=form&id=a6f1568f5a0c0127c543fd1630ce0ac4&tab=core&tabmode=list&=
- 2011 Veteran Entrepreneur Training Symposium (VETS2011), June 27-30, 2011 – Reno, NV – Details at: http://stats.aqseventsupport.com/e3ds/mail_link.php?u=http%3A%2F%2Fveterantrainingsymposium.com&i=2&d=269UY252-0V30-411Z-9385-765U50858358&e=chuck.schadl@innovate.gatech.edu.
- 7th Annual National Veteran Small Business Conference and Expo – August 15-18, 2011 – New Orleans, LA – Visit http://www.nationalveteransconference.com/ and sign up to receive email updates on registration, agenda, speakers, and other announcements or submit any questions you may have regarding the conference.
- National Recreation and Park Association Congress & Exposition – November 1 – 4, 2011 – Atlanta, GA – Details to be announced.
2010 Conferences (Note: Conference materials are posted on many past conferences.)
- GSA Schedules Contract Training- December 13 and November 15, 2010 – On-Line Webinar - Register for the Nov. 15 webinar at https://www2.gotomeeting.com/register/670264562; Register for the Dec. 13 webinar at https://www2.gotomeeting.com/register/913141458.
- 7th Annual Alliance South Small Business Procurement Fair – December 7, 2010 – Atlanta, GA – Details at: http://www.allianceforbiz.com/events/specific_event.php?id=128.
- Aerospace Industry Committee (AIC) 8th Annual Requirements Symposium – November 16 – 18, 2010 – Perry, GA – Details at: http://www.wrcoc-aic.org/Page8.aspx.
- 6th Annual Service Disabled Veteran Owned Small Business Forum – November 10, 2010 – Atlanta, GA – Details at: http://gtpac.org/wp-content/uploads/2010/10/Annual-GSA-Veterans-Small-Business-Event-11.10.2010.pdf.
- Department of Defense “Industry Day” focusing on the shipbuilding industry along the Gulf Coast - November 9, 2010 – Biloxi, MS – Details at: http://gtpac.org/wp-content/uploads/2010/09/3rd-Annual-DoD-Shipbuilding-Industry-Day-Nov-9-2010.pdf
- The Governmental Purchasing Association of Georgia’s annual Georgia Vendor Exhibitor Fair - November 2-3, 2010 – Perry, GA – Details at: http://gtpac.org/wp-content/uploads/2010/09/GPAG-Vendor-Fair-Nov-2-3-2010-Perry-GA.pdfNational SBIR Beyond Phase II Conference & Technology Showcase – September 13 – 17, 2010 – San Antonio, TX – Details at: https://www.beyondphaseii.com/index.aspx. Emergency Response Contracting Conference - June 21, 2010 – Atlanta, GA - Conference proceedings now posted at http://gtpac.org/training/training-video.
- 4th Annual SDVOSB/VOSB/SB Conference & Match Making Expo – October 28 – 29, 2010 – Tampa, FL – Details at: http://www.dm.usda.gov/osdbu/FBOAnnouncement_13Aug2010.pdf.
- Small Biz Contractors’ Forum Presents: Contacts & Contracts – October 27, 2010 – Atlanta, GA – Details at: http://www.nasbc.org/contacts-contracts-georgia.
- City of Albany Small Business Procurement Program Kick-Off & Orientation – October 18, 2010 – Albany, GA – Details at: http://gtpac.org/2010/10/city-of-albanys-small-business-program-kick-off-set-for-oct-18.
- University System of Georgia – South Georgia Regional Procurement Expo 2010 – October 15, 2010 – Savannah, GA – Details at: http://gtpac.org/wp-content/uploads/2010/09/Univ.-System-of-GA-Procurement-Expo-Oct.-15-2010.pdf.
- Effective Problem Solving – Life’s Most Important Skill – September 9, 2010 – On-Line Webinar – details at: https://mep-nist-events.webex.com/mep-nist-events/onstage/g.php?t=a&d=997194952
- Annual U.S. Army Infantry Warfighting Conference – September 13 – 16, 2010 – Columbus, GA – Details at http://gtpac.org/2010/09/army-vendor-showcase-in-columbus-ga-in-sept.
- GSA’s Public Buildings Service Educational and Matchmaking Conference – August 31, 2010 – Atlanta, GA – Details at http://gtpac.org/2010/08/gsa-to-host-public-buildings-service-vendor-conference-aug-31st - Conference proceedings now posted at http://gtpac.org/training/training-video.
- Interior Dept. Small Business Boot Camp
- Air Force Information Technology Conference - August 30-31, 2010 – Montgomery, AL – Details at http://gtpac.org/2010/07/air-force-to-host-it-vendors-in-montgomery-al.
- Clayton County (GA) Business Community Meeting- August 26, 2010 – Jonesboro, GA – Details at http://gtpac.org/wp-content/uploads/2010/08/Clayton-County-Business-Community-Meeting-Aug.-26-2010.pdf.
- Minority Enterprise Development Week Conference – August 25-27, 2010 – Washington, DC – Details at MEDWeek flyer - Conference proceedings now posted at http://www.medweek.gov/conference-presentation.
- SBA Veterans Export Business Symposium - August 24, 2010 – Lawrenceville, GA – Details at Veterans Export Symposium 08 24 2010.
- USWCC Women-Led Economy Launch Meeting - August 17, 2010 – Atlanta, GA – Details at: http://www.uswcc360members.org/memberarea/EventList.aspx - Post-conference details now available at: http://www.uswcc.org.
- Georgia Small Business Summit – August 17, 2010 – Macon, GA – Details at http://gtpac.org/2010/07/sen-isakson-to-host-small-business-summit-in-macon.
- Marine Corps Logistics Command’s Annual Vendor Event – August 12, 2010 - Albany, GA – Details at http://gtpac.org/2010/06/albany-marine-corps-base-hosting-vendor-event-aug-12th - Conference proceedings now posted at http://www.logcom.usmc.mil/sbpo
© 2011 Georgia Tech Procurement Assistance Center – All Rights Reserved.
Defense Secretary Robert Gates unveiled steep cuts to several pricey and deeply entrenched weapons programs last Thursday as part of sweeping reforms to the department’s budget planned during the next half-decade.
During an afternoon news conference at the Pentagon, Gates announced the Defense Department had identified a total of $154 billion in efficiencies over the next five years through cuts to overhead, improving business practices and eliminating troubled programs.
The service agencies will be allowed to keep and reinvest roughly $70 billion, though $28 billion from those funds would be directed to higher-than-expected operating expenses, including fuel, maintenance, health care and training costs.
The department also announced it would bring down the overall size of the U.S. fighting force by trimming the Army by 49,000 soldiers and the Marines by 20,000 starting in fiscal 2015. That decrease would be first for the armed forces since the start of the wars in Iraq and Afghanistan.
The secretary stressed that the program decisions amounted to a reduction in the overall rate of growth at the department rather than a decline in total defense spending. “My hope is what had been a culture of endless money . . . will become a culture of savings and restraint,” Gates said.
On the chopping block is the Expeditionary Fighting Vehicle, an armored, high-speed amphibious assault vehicle that has been in the planning stages since the Reagan administration. The $14 billion program has experienced multiple testing delays and cost increases. Thus far, Defense has spent $3 billion on the project.
The Marines had expected to purchase 573 of the floating tanks, but on Thursday Gates terminated the program altogether in his planned 2012 Defense budget. Gates acknowledged this was a “controversial decision,” but he noted the department could not afford a program that would “essentially swallow the entire Marine vehicle budget.” Rather, the Marines will upgrade their existing fleet of amphibious vehicles.
“Despite the critical amphibious and warfighting capability the EFV represents, the program is simply not affordable given likely Marine Corps procurement budgets,” said Marine Corps Gen. James Amos. “The procurement and operations-maintenance costs of this vehicle are onerous.”
Some industry analysts believe the department is being short-sighted with the EFV decision. Loren Thompson, who runs the Virginia-based Lexington Institute, a defense think tank, argued there is no safer way to get Marines ashore than the Expeditionary Fighting Vehicle. “The bottom line is the Marine Corps either gets EFV or it loses a lot of men doing the mission the old fashioned way,” said Thompson, who serves as an adviser to several major defense contractors.
Gates also announced plans to delay by two years the Marine Corps’ version of the F-35 fighter jet because of significant testing problems. The secretary said the program, run by Lockheed Martin Corp., would be reviewed for the next two years to see whether it demonstrates increased reliability. If the program does not show improvements, it could face termination, Gates said.
The Army also canceled plans to purchase a surface-to-air missile defense system being developed by Massachusetts-based Raytheon Co.
Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, stressed that the program cuts actually would “improve our readiness. We can do things smarter and more efficiently.”
The department also on Thursday elaborated on previously announced plans to eliminate $100 billion in overhead costs and inefficiencies from the Defense budget. The Air Force identified $34 billion in proposed efficiencies, while the Army and Navy found $29 billion and $35 billion, respectively, in potential savings.
Nonservice agency offices, including the Office of the Secretary of Defense, identified $54 billion in potential cuts through consolidating information technology support; a hiring and salary freeze; a reduction in generals, admirals and civilian executives; the elimination of hundreds of nonmandatory reports; and an increase in TRICARE health premiums for military retirees. In addition, a 10 percent reduction for each of the next three years in service support contracting is expected to save the department $6 billion, Gates said.
To take effect, the program cuts must still be approved by Congress, and top Republicans already are expressing skepticism.
These proposed cuts “are being made without any commitment to restore modest future growth, which is the only way to prevent deep reductions in force structure that will leave our military less capable and less ready to fight,” said Rep. Howard “Buck” McKeon, R-Calif., chairman of the House Armed Services Committee. “This is a dramatic shift for a nation at war and a dangerous signal from the commander in chief.”
Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, said the Defense proposals would be discussed as part of the normal budgeting hearing process. But he stressed the need for a new Expeditionary Fighting Vehicle. “The Marine Corps needs a next-generation amphibious vehicle,” Levin said. “The nation needs us to build and buy that vehicle at a reasonable cost.”
Gates briefed the leaders of the House and Senate Armed Services and Defense Appropriations committees on Thursday morning.
The Pentagon’s proposed budget for 2012, which includes funding for the wars, is expected to be $553 billion, or about $13 billion less than it had expected.
– By Robert Brodsky – GovExec.com – January 6, 2011
Filed under Contracting Tips · Tagged with Air Force, Army, DHS, DISA, DoD, government contracting, IDIQ, IT, NASA, NIH, OPM, technology, US AID, USPS
In our annual roundup of the 20 most important contracts that are about to hit the market, Washington Technology culled data from FedSources and Input. The contracts are ranked by the dollar size of their ceilings. Actual business that will flow through these contracts likely will be less.
The contracts this year weigh heavily toward IT support and professional services. Support for the military is the most common driver behind many of these contracts.
For more coverage of the critical trends driving the market in 2011, click here.
1. Strategic Services Sourcing 2nd Generation
Agency: Army Materiel Command
Value: $30 billion
RFP: November 2012
Award: December 2014
Solicitation No.: N/A
Purpose: This is a follow-on contract to the current S3 contract. The Army uses the contract for engineering services and logistics and business operations support for command and control systems. The contract is a multiple-award contract. The current contract has seven incumbents that have done more than $4.5 billion in task orders.
2. Enhanced Army Global Logistics Enterprise
Agency: Army Materiel Command
Value: $30 billion
RFP: February 2011
Award: January 2012
Solicitation No.: W52P1J10RXXXX
Purpose: The contract has four functional areas: supply, maintenance, transportation support, and plans and operations. The contract will primarily support logistics operations. It is replacing the Army’s Field and Installation Readiness Support Team contract and some other smaller vehicles. This will be a multiple-award contract.
3. Communication and Transmission Systems
Agency: Army
Value: $19.5 billion
RFP: May 2011
Award: February 2012
Solicitation No.: W91QUZ10CTSPWSQA
Purpose: This contract will be used to acquire a variety of communications services, including satellite, microwave, fiber optics, over-the horizon, radio and wireless. The contract also will be used for equipment, hardware and support services. The Army is looking for turnkey solutions on this contract as well. It is expected to be a multiple-award contract.
4. Defense Language Interpretation and Translation Enterprises
Agency: Army
Value: $15 billion
RFP: Expected by the end of calendar 2010.
Award: March 2011
Solicitation No.: W911W410R0011
Purpose: This contract will be used by the military and other U.S. agencies to acquire foreign language and regional expertise to help the government meet its missions. Translators and analysts will work on-site and remotely. Services will include translating and interpreting from English to other languages in addition to from other languages into English.
5. Federally Funded Research and Development Center Support
Agency: NASA Jet Propulsion Laboratory
Value: $14.4 billion
RFP: March 2011
Award: December 2011
Solicitation No.: NNN10AA01S
Purpose: The contractor will manage and operate the Jet Propulsion Lab, including maintaining the infrastructure needed by the lab to carry out its scientific and research mission. Missions include projects in Earth orbit and deep space, and they cover Earth science, planetary science, heliophysics and astrophysics.
6. Global Tactical Advanced Communications Systems and Support Services
Agency: Army
Value: $10 billion
RFP: March 2011
Award: June 2011
Solicitation No.: W15P7T11RC001
Purpose: The multiple-award contract will be used to buy hardware, systems and services for a wide range of tactical command and control systems, including logistics support, testing and engineering services.
7. Next Generation Enterprise Network
Agency: Navy
Value: $8.8 billion
RFP: Fiscal 2011
Award: To be determined
Solicitation No.: MKTSVY4623E
Purpose: NGEN will replace the Navy Marine Corps Intranet contract held by Hewlett-Packard. This time, the Navy is expected to divide the contract into five parts. The NGEN program also will cover the One-Net contract held by General Dynamics, the naval network outside the United States, and afloat networks. NGEN will cover desktop computers, local-area networks, enterprise networks and the Navy’s IT infrastructure used by 450,000 people.
8. Electronic Commodities Store IV
Agency: National Institutes of Health
Value: $6 billion
RFP: April 2011
Award: December 2011
Solicitation No.: N/A
Purpose: This longtime multiple-award contract has been used by many agencies looking for a vehicle to buy hardware and software. The contract carries commercial items such as desktop PCs, laptop PCs and handheld devices. It also has lots for telecommunications equipment, scientific research workstations, software and support services.
9. Design, Development, Demonstration and Integration
Agency: Army Space and Missile Defense Command
Value: $5 billion
RFP: November 2010
Award: November 2011
Solicitation No: W9113MD3ISS10
Purpose: The contract will support development of requirements for missile defense, space and other warfighter solutions. Work will include platform and sensor technologies, communications networks, missiles, rockets and re-entry vehicles, and space technologies.
10. Information Technology Enterprise Solutions-3H
Agency: Army
Value: $5 billion
RFP: June 2011
Award: January 2012
Solicitation No.: W91QUZ10ITES3H
Purpose: This contract is used to acquire hardware such as Unix servers, Windows servers, workstations, desktop PCs, laptop PCs and storage systems. The Army also will use this contract to buy networking equipment, printers, video equipment and uninterruptible power supplies. This is a follow-on contract held by Apptis Inc., CDW Government, Dell Federal systems, IBM Corp., World Wide Technology and GTSI Corp.
11. Medicare Prescription Drug Integrity
Agency: Centers for Medicare and Medicaid Services
Value: $4 billion
RFP: March 2011
Award: September 2011
Solicitation No.: N/A
Purpose: CMS will use this multiple-award contract to help implement Part D prescription drug benefit regulations. However, the regulations are not yet finalized. Services will include reviewing compliance plans, investigations and audits and developing data systems to track fraud and abuse. There are eight incumbents, including Hewlett Packard, Maximus, Perot Systems and Science Applications International Corp.
12. Automated Desktop Extended Processing Technology III
Agency: U.S. Postal Service
Value: $2 billion
RFP: January 2011
Award: April 2011
Solicitation No.: N/A
Purpose: This contract will supply desktop PCs, mobile devices, peripherals and support services to the U.S. Postal Service. Services will include repair and maintenance. Services and products will be delivered across the country. Hewlett-Packard is the incumbent contractor.
13. Economic Growth for Poverty Reduction
Agency: U.S. Agency for International Development
Value: $2 billion
RFP: November 2010
Award: March 2011
Solicitation No.: AIDEGATEG4PR
Purpose: The contractors on this multiple-award procurement will work on a variety of stability fronts, including trade and investment, financial sector, economic opportunities, and private-sector competitiveness. The services and projects are geared toward alleviating poverty in developing countries by helping to build the governing structures needed for economic growth and stability. USAID has a variety of contractors working on these types of programs.
14. NASA Enterprise Data Center Consolidation
Agency: NASA
Value: $1.5 billion
RFP: March 2011
Award: December 2011
Solicitation No.: NNK09274726R
Purpose: NASA has 78 data centers with 15,000 servers. This contract will be used to rationalize management of the data centers, including where they are housed, hardware issues, hosting and what kind of infrastructure to put in place. The contract will be used to create a more uniform management and implementation plan across NASA. The agency has multiple contractors providing these services now, and it is expected that this will be a multiple-award, task-order contract.
15. Training and Management Assistance Support
Agency: Office of Personnel Management
Value: $1.45 billion
RFP: June 2011
Award: February 2012
Solicitation No.: N/A
Purpose: This will be a five-year contract to support training, including the development of custom training and learning systems. Other services include developing training and products and services such as technology-based training products, instructor-led materials and knowledge management systems. There also will be solutions for the analysis and design of programs and other services such as human resources, consulting and business process engineering.
16. Global Information Grid Services Management — Engineering, Transition and Implementation
Agency: Defense Information Systems Agency
Value: $1.4 billion
RFP: January 2011
Award: September 2011
Solicitation No.: HC102810R2001
Purpose: The contract supports the Global Information Grid, including systems engineering and integration, architecture, telecommunication standards development, telecommunication network security and information systems engineering, IT systems, and other services. The contract is expected to be awarded to several small businesses. The current contract-holders are Science Applications International Corp. and SETA Corp.
17. Integrated Mission Planning, Training and Execution
Agency: NASA
Value: $980 million
RFP: November 2010
Award: March 2011
Solicitation No.: NNJ10ZHD002L
Purpose: Lockheed Martin Corp. is the incumbent on this contract, which supplies NASA with technical support for mission planning. Work is done at the Johnson Space Flight Center in Houston. Details on the acquisition strategy have not been released yet.
18. Expeditionary C4I Systems and Technical Support Services
Agency: Space and Naval Warfare Systems Command
Value: $900 million
RFP: November 2010
Award: July 2011
Solicitation No.: N6523609R0202
Purpose: Services under this contract include systems engineering, test and evaluation, maintenance and site support, configuration management, logistics and training, and program management. The contract will need a top-secret clearance. This is a new contract, so there is no incumbent contractor.
19. Application Support Centers
Agency: Homeland Security Department
Value: $750 million
RFP: February 2011
Award: September 2011
Solicitation No.: N/A
Purpose: DHS’ Citizenship and Immigration Service continues to need support for its biometrics programs. Support includes biometrics capture, testing, program management and scheduling support. Northrop Grumman Corp. is the incumbent on the contract. The bureau is in the early stages of developing the recompete of this contract.
20. Advisory and Assistance Services for Global Engineering Integration and Technical Assistance 11
Agency: Air Force
Value: $650 million
RFP: March 2011
Award: January 2012
Solicitation No.: FA890311R8002
Purpose: This contract is used to support a variety of Air Force agencies with management and professional services, studies, analysis and evaluation services, and engineering and technical services. There are several incumbents on this long-running program, including Booz Allen Hamilton. Booz Allen captured more than half of the task orders issued under the program.
About the Author: Nick Wakeman is the editor of Washington Technology – 11/10/2010.
Filed under Contracting Tips · Tagged with Alliant, Army, DoD, government contracting, GSA, IDIQ, innovation, IT, OMB, SBA, small business, task orders, technology, VA
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.
About the Author: Sami Lais is a special contributor to Washington Technology – 11/15/2010
The Army on Tuesday asked industry to submit proposals for developing a new infantry fighting vehicle that could be used across the full spectrum of battlefield operations, from counterinsurgency to ground combat.
The request for proposals follows the August cancellation of a similar solicitation after Defense Department acquisition officials questioned the service’s requirements and strategy for buying a new ground combat vehicle. Army leaders have struggled with the best way to fill the service’s need for tactical vehicles after Defense Secretary Robert Gates scuttled that portion of the wide-ranging Future Combat Systems program last year.
“The Army and [Defense acquisition officials] have worked through this and are firmly committed to getting this kicked off,” Col. Andrew DiMarco, ground combat vehicle project manager, said in a conference call with reporters.
Michael Smith, the official in charge of developing concepts and requirements for the vehicle, said the Army is looking for a vehicle that can be adapted “on the fly” to changing battlefield requirements and threats.
The infantry fighting vehicle must be able to carry nine soldiers and their gear, and it must have a modular armor system that can be tailored to specific situations, according to Smith.
The technical development phase will have full and open competition, DiMarco said, adding the Army could select up to three contractors for the initial award. To control costs, the Army has set a spending ceiling of $450 million for the development phase. Per unit manufacturing costs are to be between $9 million and $10.5 million with a life-cycle cost target of $200 per operating hour.
Proposals are due Jan. 21, 2011, and the Army expects to announce awards in April, said DiMarco.
The Army eventually plans to buy about 1,800 vehicles, he said.
– By Katherine McIntire Peters - GovExec.com – November 30, 2010
An Army contract worth as much as $250 million awarded to a subsidiary of Cape Fox Corp., an Alaska Native corporation in Southeast, is drawing attention two years later, according to The Washington Post. The newspaper, which has been reporting on special federal contracting privileges for Alaska Native corporations, says United Solutions and Services, known as US2 and co-owned by Cape Fox Corp., got the no-bid federal contract to help the Army in “a global campaign to prevent sexual assault and harassment, without seeking outside bids.” It was an odd contract to award US2, The Post reports: US2 “had just three employees and several small contracts for janitorial services and other work. It was based in a four-bedroom colonial, where the founder worked out of his living room.” With the Army contract, US2 needed help to complete the work:
With the Army’s knowledge, the firm subcontracted the majority of it to more established companies, a Washington Post investigation has found. Federal rules generally require prime contractors on set-aside deals to perform at least half of the work, something US2 did not do on more than $100 million worth of jobs, according to interviews with Army officials and an analysis of federal procurement data. In response to The Post’s findings, officials at the Department of the Interior, which managed the contract for the Army, said proper procedures were followed in the contract award. But they said in a statement that they have asked the department’s inspector general to investigate.
It’s not the first time Cape Fox has come under scrutiny this year. Alaska Dispatch reported in May that Cape Fox and two companies it owns — APM LLC and 1CI Inc. — were suing two of APM’s former CEOs and four of those men’s companies for $27 million in damages. Last fall, the Air Force expelled 20 contractors from its procurement list, citing an extensive scheme to exploit and deceive an award process designed to assist small and disadvantaged businesses — businesses which, if Native-owned, are given preferential treatment. Six of the companies named had direct ties to Cape Fox. The rest had ties to former APM chief executive Townsend Jackson, his brother Craig Jackson, and other family members.
Cape Fox and other Alaska Native corporations have been under fire for benefiting from a special federal contracting program. Many Native corporations have created subsidiaries that are involved in what are called 8(a) contracts with the federal government. For years, critics have claimed Native corporations have received unfair advantages compared to other small businesses and that the Small Business Administrations 8(a) program lacks oversight.
The program creates preferences for economically disadvantaged small businesses. Alaska Native companies enjoy the lion’s share — 74 percent — of federal 8(a) awards, according to a 2009 report by the U.S. Senate Subcommittee on Contracting Oversight. Native corporations can go after federal contracts without facing competition. They can also subcontract to larger companies that aren’t Native-owned but have the expertise to fulfill the contracts.
– Alaska Dispatch – Nov. 27, 2010
Filed under Contracting Tips · Tagged with Alliant, Army, CDC, competition, DoD, EAGLE, federal contracting, government contracting, GSA, HHS, Homeland Security, information technology, innovation, Interior Dept., IT, OMB, small business, VA
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.