OMB releases second ‘mythbusting’ memo to improve communication with contractors

Asserting that “early, frequent and constructive engagement with industry leads to better acquisition outcomes,” the Office of Management and Budget on Monday released Mythbusting 2, a follow-up to guidance sent out in 2011 to encourage agencies and contractors to shed some of their reluctance to communicate.

“Whereas we focused last year on the misconceptions on the part of federal agencies, we want to continue the discussion by addressing in this memorandum the misconceptions that may be held by some in the vendor community,” wrote Lesley Field, acting administrator of the Office of Federal Procurement, in a May 7 memo to chief acquisition officers, senior procurement officers and chief information officers.

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VA pushes relationship repair with industry suppliers

When Maurice Stewart arrived at the Veterans Affairs Department a few years ago, he joined a procurement office that was in extreme distress.

VA faced the prospect of running 20 percent over its budget for commodities and IT services in fiscal 2010 due to costly redundancies and other chronic dysfunctions.

The odds that procurement officials and industry leaders could join forces to tackle any of the problems seemed slim given the dwindling interaction — and trust — between the two sides.

The department’s contracting officers were notorious for not returning phone calls. Contracts routinely went out the door late. And vendors had no insight into a contract’s requirements until the official request for proposals hit the street, which limited their ability to propose alternative or more creative solutions.

All that chaos had a direct impact on the agency’s mission. “If we can’t put good requirements out on the street, we can’t serve the veteran,” said Stewart, VA’s associate deputy assistant secretary for logistics policy and supply chain management.

VA officials now believe they have begun to put those problems behind them, thanks to a three-year-old initiative that Stewart leads called the Supplier Relationship Transformation (SRT) program. It is based on the premise that, as Stewart said, “improving dialogue is essential to the health of government procurement.”

VA officials began by surveying vendors and holding industry forums around the country last year. Armed with the feedback they received — much of it brutally honest — they are now developing targeted, multipronged plans to address the biggest problems.

VA is hardly alone in this battle. Procurement offices across government struggle with strained relationships and poor communication with suppliers. Government procurement and industry executives say the problem, at least in part, is an unintended consequence of President Barack Obama’s efforts to tighten ethics rules in contracting.

The message that many procurement officials heard was that they could only stay out of trouble by playing it safe, and that meant avoiding contact with vendors unless absolutely necessary.

Now, officials are trying to reverse that trend through efforts such as VA’s SRT program, the General Services Administration’s supplier relationship management initiative and the Office of Federal Procurement Policy’s myth-busters campaign.

Getting feedback from industry and internal agency customers is an important first step. Translating that knowledge into policy and managerial guidance that can change attitudes and behaviors is a bit trickier, but it’s a challenge that officials say they must embrace.

No pain, no gain

VA procurement officials realized that if they wanted to improve, they would need to understand where they were falling short, and that meant listening to some harsh criticism.

SRT is VA’s first enterprisewide effort to gather quantitative data and qualitative insight into what’s wrong with the agency’s acquisition processes. The program includes semi-annual supplier perception surveys, quarterly internal customer perception surveys, annual webinars and supplier outreach forums. This year, officials have already held forums in Denver and Atlanta, with plans to do the same in Boston, Seattle, Chicago and Washington, D.C.

The feedback gathered so far has been frank — often painfully so. “Suppliers gave them an earful,” said Doug Black, a director at the Ambit Group, which has worked with VA on the SRT program since the beginning.

Several key problem areas have been identified, including:

  • Inadequate communications. Transparency in the acquisition process needs to be improved and should include ways for vendors to offer feedback on requirements for specific contracts and the overall process.
  • Poor customer service. Contractors would like to see improvements in the level and quality of acquisition support they receive, such as having phone calls returned and contract modifications addressed in a timely manner.
  • Unclear roles. Companies struggle to understand the differing roles and responsibilities of contracting officers, contracting officer’s representatives and program managers.
  • A closed contracting process. Companies would like to provide input on the contract type and definition of requirements early in the process so they can offer VA the best prices and delivery timelines in their proposals.

In general, company leaders told VA officials they didn’t think the department cared about their profitability or adequately shared the risks that come with contracting. Therefore, contractors had no choice but to reflect that risk in the form of higher prices.

On the road to recovery

The grievances were no surprise to Jaime Gracia, president and CEO of Seville Government Consulting, an acquisition and program management consulting firm. For example, he said that many companies in the service-disabled veteran-owned small-business community, of which his firm is a part, are frustrated with VA’s certification process. VA officials say it should take three months for the agency to certify a company as eligible to compete for special contracts set aside for that community.

“I’ve not met anyone who got through it in three months,” Gracia said. “It may happen, but I’ve never heard of it.”

He said some companies are choosing to avoid that bureaucratic process and are looking elsewhere for business. He sees the SRT program as a positive sign.

“The VA is far from stellar, but they recognize it and are going in the right direction,” he said.

The feedback has been hard for some VA managers to take. “Initially, some folks were reluctant to read what was reported on the surveys,” Stewart said.

But only by identifying and understanding the problems can officials begin to craft plans to solve them. Fortunately, those efforts are already under way.

For example, last year the VA acquisition office formed an industry advisory group of 24 companies of varying sizes. The group meets quarterly to share best practices and provide targeted suggestions to help VA improve relationships with vendors.

VA also established a governance council of acquisition leaders, which is led by the chief acquisition officer and the senior procurement executive and includes policy experts and the small-business procurement director. The council’s purpose is to develop specific action plans for improvement.

That group came up with the idea of having VA’s Technology Acquisition Center conduct advanced planning briefings for industry. Contracting officers and program managers can now bring companies in to talk about upcoming procurements so they have an opportunity to provide feedback and suggestions early in the process.

Such programs are still fairly new, but as more suppliers are getting involved and seeing that VA officials are committed to improvement, negative attitudes are beginning to change, Stewart said.

Based on the responses to the supplier perception surveys, VA is making measurable progress. Vendors are asked to use a five-point scale to rate VA’s performance in specific areas. When the first survey was conducted in October 2010, the agency scored 3.5 or higher in only two areas. In the second and third semi-annual follow-up surveys, companies gave VA a rating of 3.5 or higher in four areas.

In addition, 17 areas received ratings below 3.0 in the first survey. In the second survey, 12 areas scored below 3.0, and VA only had five areas rated below 3.0 in the third survey.

Turning the tide

The need to strengthen relationships with industry is pervasive throughout government. An independent survey of contractors released in February reported a worsening relationship between government contracting officers and industry representatives.

Ten percent of respondents in Grant Thornton’s 17th annual Government Contractor Industry Survey said the relationship with contracting officers was “fair or poor,” double the percentage who gave that rating in the previous year’s survey. Moreover, only 22 percent of the more than 100 companies surveyed said they believe the government resolves contract issues efficiently, a drop from 26 percent in the previous year.

The Obama administration has been trying to improve relationships with industry suppliers. For example, the Office of Federal Procurement Policy released its myth-busters memo in February 2011 to encourage agency officials to increase their communication with industry. The memo emphasized that it is not against the rules to discuss upcoming contracts and procurements before bid proposals are formally solicited. In fact, those discussions are necessary.

“If OFPP had to issue that memo, it indicates there’s a serious problem,” said Robert Burton, former deputy administrator at OFPP and now a partner at Venable law firm.

Only after Burton left government for the private sector did he realize how closed off most of the government acquisition workforce is from industry, he said. Stewart said he had a similar reaction during his time in the private sector.

The General Services Administration, which handles $50 billion in business volume annually, is also working on ways to improve relationships and communication with vendors, said Steve Kempf, commissioner of GSA’s Federal Acquisition Service (FAS).

GSA officials are planning to launch a supplier relationship management initiative, and like their counterparts at VA, they are starting with an assessment of the current state of relationships.

The agency recently surveyed 50,000 contractors to see how they perceived FAS as a business partner. Officials planned to share the results among GSA procurement managers in April. Kemp said the results will contribute to the development of specific action plans.

In addition, GSA has been making an effort to incorporate companies’ input earlier in the contract development process. For example, GSA’s Interact website hosts a community for industry members who are interested in providing input as GSA develops a new professional services contract called One Acquisition Solution for Integrated Services (formerly Integrations).

Keeping the momentum going

The key to all those efforts is follow-through and continuing engagement, Stewart and other executives say.

As part of VA’s SRT program, Stewart hosts an end-of-year webinar for vendors, a sort of State of the Union address for VA’s acquisition community.

At the third such update, held last month, all of VA’s senior acquisition leaders shared the improvements their offices have made in the past year based on vendors’ feedback.

“What we try to do is show them we’ve made changes and show them improvements,” Stewart said. “If you don’t keep them engaged, they’re going to feel, ‘Why should I invest my time and resources?’ Without their investment, you have nothing.”

Tips for better conversations

Agencies can build a more competitive pool of bidders by reaching out to the vendor community early in the procurement process and asking company leaders to share their ideas and expertise. But participants on both sides fear running afoul of acquisition regulations and jeopardizing contracts, which has kept many of them from pursuing greater engagement.

Last year, the Office of Federal Procurement Policy launched a campaign to dispel common misconceptions about such interactions and encourage responsible and constructive exchanges.

Among other guidance, the myth-busters campaign advises government procurement employees to:

  • Communicate with vendors early, frequently and constructively.
  • Talk to various categories of small businesses.
  • Talk to vendors you have not worked with in the past.
  • Protect private information, including vendors’ confidential information and details on the agency’s source-selection process.

[Source: Office of Federal Procurement Policy]

Soliciting honest feedback

Officials might have to suffer some bruising criticism if they want to improve their procurement performance and relationships with industry.

To see what their contractors think of the job they are doing, Veterans Affairs Department officials conduct semi-annual surveys that ask contractors to assess the agency’s performance.

Topics include:

  • The company’s commitment to VA for a long-term business relationship.
  • VA’s effectiveness in sharing risk and reducing the company’s need to build risk into its pricing.
  • The extent to which VA makes it easy for companies to succeed and effectively provide goods and services.
  • The overall quality of the working relationship between VA and the company.

by Matthew Weigelt – Federal Computer Week – Apr. 16, 2012 at

5 secrets of better branding for government contractors

There’s a good reason Vangent was named government contractor of  the year at the 9th Annual Greater Washington Government Contractor  Award gala.

Vangent delivered great results and had a strong brand. Over its  fifty plus year history, the Vangent brand grew from a small business  unit of NCS, to a $90 million operating division of Pearson PLC, to a  $700+ million stand-alone company owned by Veritas Capital that was  ultimately acquired by General Dynamics for $960 million on Sept. 30,  2011.

My paramount focus for Vangent’s brand over the past four and a half  years was to grow awareness and recognition as a powerful, effective and reliable partner for federal government agencies seeking a services  provider to support and answer questions about broad-reaching government programs. These programs included Medicare, military health care,  disease control and prevention, student loans and Cash for Clunkers, to  name a few.

In today’s government services market, where lowest price and  technically acceptable often trumps best value and best solution, and  where companies big and small, old and new, are jockeying for a slice of dwindling federal dollars amid an austere budget environment, an  effective branding strategy is critical to a company’s success.

Vangent’s growth and market strength were the result of great  customer service but also a strong focus on brand value, both internally and externally. Without a strong brand, many government services  providers look exactly alike. With a solid and recognizable brand, a  government services provider can come to stand for something valuable  and important for its employees, customers, investors and the citizenry  it serves.

Here are five rules of branding I practiced at Vangent which are  essential for any company looking to enter the government services  market, expand their market share or to re-position for new growth  opportunities:

1) Focus on outcomes, not offerings. You can put a  marketing brochure or a website of Company A next to Company B and cover up the names and you wouldn’t be able to tell the difference. Many  companies feel compelled to list every capability or skill they offer in a ‘laundry list’ fashion without any context as to what problem or  challenge they help their customers overcome. A much more compelling way to communicate what a company does differently is to promote the  outcomes or results it accomplishes for its customers – in plain  English. Vangent built a successful branding campaign on the fact that “four out of ten Americans connect with Vangent, but never know it.” We  combined this powerful and memorable factoid with a unique result it  helped its customers accomplish. One example was how Vangent helped a  customer enable better information sharing among multiple agencies which saved time and money – reducing processing time from eight months to  just one day and shaving 30 percent in operating costs. Using that kind  of differentiator will make your company stick out from the rest of the  pack and allow you to stake claim to a result which you can build your  brand around.

2) Equip your employees with the tools they need to be effective brand communicators. In the government contracting world, employees are your most valuable  brand ambassadors. But the reality is that most employees who work for  government services providers can barely recite their company’s mission  or vision statements, let alone their menu of service offerings. The  reason is simple: Mission statements too often are too long and full of  over-used industry jargon. Make it easy for your employees by giving  them the tools they need to not only memorize the meaning or essence of  your company’s brand, but to internalize the brand so that they can  effectively explain what your company’s brand represents. When Pearson  Government Solutions was rebranded as Vangent in 2007, it created a  “brand playbook” given to every employee and helped them understand the  importance of branding, the words to describe Vangent’s brand and  examples or “proof points” that helped them explain what Vangent’s brand represents. The brand playbook was an essential part of Vangent’s  on-boarding program for new employees and was reinforced with a short  and impactful video shown to all employees.

3) Create an emotional feeling about your brand. It’s OK, really! Companies marketing products we buy and use every day  are masters at creating an emotional connection with consumers. They  want you to feel good about buying and using their product. That’s why  today’s consumer marketing focuses on how you feel versus how much the  product costs or whether you need it. Why can’t we apply that same rule  to the government services market? Vangent showcased its experts and  thought leaders on video in a series of conversations about some of the  most pressing challenges facing its customers. What’s the point in  keeping their faces and thoughts hiding behind nondescript bios or  ho-hum descriptions of your company’s services? Bring your company to  life and create an emotional connection with your target audiences by  storytelling. Showcase your company’s talent in rich content, quality  photos and compelling videos. You’ll offer your customers, teaming  partners and new recruits a glimpse into your company before they‘ve had the chance to meet you in person.

4) Your brand is your culture and culture trumps strategy any day. The first question asked by any new employee is about the company’s  culture, not about the company’s strategy. They’ll want to know what  it’s like to work at your company, what the environment is like and the  opportunities to advance their careers. Many companies in the government services industry struggle in communicating their company culture and  instead give employees lists of customers, names of contract vehicles  and a list of company locations. Does that really answer an employee’s  need to understand the company culture? Hardly. Vangent focused on its  six core values and one in particular: We do meaningful work. Employees  understood the impact they had on the lives of millions of people every  day. This powerful value permeated throughout the company in employee  communications, external communications in the forms of media relations, investor relations and marketing and recruiting campaigns.

5) Invest in your company’s brand no matter how much and don’t be ashamed about it. The old saying “don’t be penny wise and pound foolish” certainly rings  true today in the government services industry where pressure on top and bottom line growth has squeezed out marketing, communications,  advertising and branding budgets. During an era of dwindling resources  in the federal government where blatant promotion is frowned upon, how  do you distinguish your company and justify precious resources? In a  down economy like the one we’re experiencing today, it’s more important  than ever to up your game and take advantage of new and inexpensive ways to showcase your company. At Vangent, I implemented an integrated  marketing program which focused on valuable content and compelling  videos. I also used social media tools including Twitter, YouTube and  LinkedIn to drive Vangent’s brand directly to the audiences it aimed to  reach. Vangent’s powerful messaging platform was on display at industry  events, conferences and trade shows.

Yes, employees, customers and investors do notice which companies  have got it going on and which companies are stuck in the past.

About the Author: Eileen Cassidy Rivera is former vice president of communications and investor relations at Vangent, a General Dynamics company. In December, she joined KeeganSilver as senior health marketing strategist supporting Booz Allen Hamilton. This article was published by Washington Technology on Dec. 1, 2011 at

10 tips for better contracting: Relationship advice for contract managers

It all starts with better communication.

Companies wait in suspense for months to hear who wins a contract that’s vital to their portfolios. They’ve invested a lot of money and time into getting each piece of the bid correct. In the end, for one company, it’s good news. The press releases go out and work gets started.

But the work, in fact, can begin too soon, former program managers and experts say. Any miscommunication between the contractor and the program manager from the start of a contract can cause problems to brew.

The world of procurement hinges on how the two interact. It’s so important because too often, the two sides don’t know what each other wants or expects. They may not even know what success really is, particularly on cutting-edge projects.

“There’s got to be a meeting of the minds,” said Jaime Gracia, president and CEO of Seville Government Consulting, who works frequently with companies in the early stages of contracts.

The contract may have just started, but the manager and the contractor might have already taken different paths to get to the goal. And it’s happening more often.

“I’m seeing an ugly trend,” despite the administration’s efforts to stop it through contract management, Garcia said. Busy managers hand things off to companies to take care of. There are too many contractors and managers who don’t sit down with each other in the beginning.

Starting at the award, the contractor and the program manager have close ties. Audits are soon to follow from the inspector general’s office, and possibly the Government Accountability Office or even congressional staff. Even more, transparency is a factor as more data is going online for the public to see. The contractor and managers need to be on the same page.

“Like it or not, once the contract is awarded, they are partners with industry,” said Elaine Duke, former undersecretary for management at the Homeland Security Department and now president of Elaine Duke and Associates LLC.

Contractors in charge of the program and the government managers need a kick-off meeting, experts said. In that meeting, the future of success is laid out.

“Just because you won the contract you still may not understand the performance goals,” said Fred Schobert, former Networx program manager at the General Services Administration and now owner of Acquisition Advantage LLC.

Employees these days complain of too much work and so little time to work. They don’t have time for another meeting. It’s not an excuse though.

“It’s a valid reason, but sorry, I don’t buy it,” Gracia said. He believes a successful contract is worth more than the time for an extra meeting.

The meetings don’t have to be formal, and they don’t have to be long. It depends on the contract. Oftentimes, a firm-fixed price contract won’t have a long, drawn-out meeting. The project is generally clear. More in-depth discussions are needed for a cost-reimbursement contract, which holds a lot of risk for both sides.

The meeting also allows both sides to talk about and prepare for what’s ahead.

“You’re thinking out all of the many scenarios that may arise during the life of the contract,” said Ray Bjorklund, senior vice president and chief knowledge office at Deltek’s FedSources business unit. He managed several Air Force development and production programs for command, control, and communications systems at the USAF Electronic Systems Center.

These experts had more suggestions for a good running start on a contract and ways to avoid litigation for bad work.

1. Learn about the program manager’s expectations and goals. Contractor and customer need to figure out milestones that point out progress. Schobert said contractors should be thorough and careful in doing so.

“Your clients may not really understand them themselves,” he said.

2. Establish goals for the program that deal with cost, schedule, and performance with top management based on the contract’s requirements.

3. Get agreements in writing to be clear on issues.

4. Build a solid team in order to meet all parts of a contract. Schobert said look for disciplined coworkers who can deliver their tasks on schedule. More specifically, have a strong financial manager and strong contract specialist. He said that’s often overlooked.

5. Arrange a schedule for meeting regularly, whether in person or otherwise, whichever fits the circumstance.

6. Meet the points of contact in the program manager’s office. Contractors need to develop more than arm’s length relationships. It’s also important to know the chain of command in the program office. Duke recommended getting to know the lower-level employees, who often work on day-to-day operations. They may be able to take care of smaller concerns. The boss doesn’t need to bothered.

7. Realize that bad news doesn’t get any better with age, Bjorklund said. Delaying bad news doesn’t help relationships. A program manager—or anyone, for that matter—doesn’t want to be blindsided with problems.

“Small problems, if you wait too long, become big problems,” Duke said.

8. Grow tough skin. Contractors need to learn patience, and when people get upset, they should take the high road, Duke said. In other words, act like an adult in tense situations and don’t retaliate for what is said.

9. Don’t take comments personally.

“Zone out for a few minutes and let them vent,” Duke said. Once they’re done, “then begin to engage to accomplish things.”

10. Finally, learn from the mistake that were made. Deconstruct the steps that led to the collapse in the contract after it’s happened.

“We don’t need a crystal ball,” Gracia said. “We know it’s happened; now we need to know how to fix it.”

— About the Author: Matthew Weigelt is a senior writer at Washington Technology covering acquisition and procurement. Published 7/6/2011 at