When it comes to task order contracting, patience and strategy are needed

September 26, 2014 by

Years ago, federal agencies jumped on the indefinite delivery/indefinite quantity (IDIQ) contract bandwagon and never got off. The preference for agency-specific IDIQ contracts and government-wide acquisition contracts continues as agencies seek ways to centralize and reduce contract spending. This is especially true for IT, where more than half of spending flows through such contracting programs.

However, this is not just an IT story. The prevalence, size and complexity of task order contracts make them market-shaping now and in the future. Here are the factors involved in navigating this market:

Jockey for strategic positioning.

Don’t rely on incumbency.

Be ready for the long haul.

Perform well – then measure and share.

Engage with your agency program managers.

Find more details and read the rest of this article at: http://www.washingtonpost.com/business/capitalbusiness/deltek-when-it-comes-to-task-order-contracting-patience-and-strategy-are-needed/2014/09/19/e76d5668-3de1-11e4-9587-5dafd96295f0_story.html

GSA and Air Force partner to look at savings in GSA contracts

August 21, 2014 by

The General Services Administration and the Air Force established a working group to help identify ways to save money on enterprise-wide contracts, an Aug. 18 GSA blog post says.

The working group will look into which GSA contracts the Air Force can use to cut costs, but still complete its mission, the blog post says.

Those GSA contracting vehicles include strategic sourcing initiatives, reverse auctions, the Global Supply Special Order Program and its One Acquisition Solution for Integrated Services contracts.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-and-air-force-partner-look-savings-gsa-contracts/2014-08-20

GSA awards 95 percent of OS3 contracts

August 18, 2014 by

The General Services Administration (GSA) has awarded 95 percent of its contracts for the third iteration of the Federal Strategic Sourcing Initiative for Office Supplies, an Aug. 12 GSA statement says.

GSA issued 21 FSSI OS3 contracts, with 20 of them going to small businesses and there’s potential for more small business contracts pending further review, the emailed statement says.

FSSI OS3 is meant to save the federal government money on everyday office supplies like pens, paper and printing items by providing agencies with a list of vendors with already negotiated prices.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-awards-95-percent-os3-contracts/2014-08-12

Navy drops $2.5 billion in contracts to update shipboard networks

August 2, 2014 by

The Navy has awarded five companies eight-year contracts valued at $2.5 billion to install standardized shipboard networks.

The Space and Naval Warfare Systems Command tapped BAE Systems Technology Solutions & Services, General Dynamics C4 Systems, Global Technical Systems, Northrop Grumman Systems Corp. and Serco, Inc. for the indefinite-delivery, indefinite-quantity, firm-fixed-price, cost-plus-fixed-fee contracts for the Navy’s Consolidated Afloat Networks and Enterprise Services.

The CANES program is intended to equip every ship in the fleet with a standards-based network.

Keep reading this article at: http://www.nextgov.com/defense/2014/08/navy-drops-25-billion-contracts-update-shipboard-networks/92006

GSA awards 125 small businesses OASIS contracts

February 26, 2014 by

On Monday (Feb. 24, 2014), the U.S. General Services Administration (GSA) announced it has awarded 125 contracts to small businesses for its One Acquisition Solution for Integrated Services (OASIS) Small Business (SB) contract to companies that will provide customers with best value services for complex professional service requirements.

OASIS SB, a 100-percent small business set-aside contract, was developed in response to the Government’s need for a hybrid, government-wide acquisition vehicle.  OASIS SB will provide a streamlined solution for both commercial and non-commercial needs. OASIS SB is designed to reduce duplication of contracting efforts across the government and provide federal agencies with comprehensive, integrated professional services contract options.  The list of the 125 companies awarded contracts is available by clicking here.  

“We created OASIS SB to meet the growing demand for a hybrid, government-wide acquisition vehicle that maximizes opportunities for small businesses, stated Federal Acquisition Service (FAS) Commissioner Tom Sharpe.  “We believe that the large pool of awardees will provide government with access to highly skilled small businesses through a contract that is not only cost effective, but also efficient and streamlined for easier use by federal agencies looking to purchase complex professional services.”

OASIS SB will compliment GSA’s Multiple Award Schedules (MAS) program and provide agencies with more flexible full-service options. Notable features and benefits of OASIS and OASIS Small Business include:

  • Government-wide use
  • Access to best in class solution providers
  • On-ramp/off-ramp procedures to ensure a flexible, vibrant vendor pool
  • Integrated support for key government initiatives

GSA predicts OASIS SB will drive down costs for federal agencies, and increase efficiency by reducing the time spent on developing complex contractual instruments. OASIS SB will include a vast array of professional services contractors for agencies to choose from. In fact it  has already become the solution of choice for some government agencies. In December,  the United States Air Force committed to use OASIS SB in lieu of creating several of its own multiple-award, Indefinite Delivery/Indefinite Quantity (IDIQ) acquisition vehicles. These efforts are estimated to be worth approximately $1.4 billion per year and use of OASIS SB is projected to save the Air Force and taxpayers significant dollars and resources.

For more information visit www.gsa.gov/oasis and OASIS Industry Group on GSA Interact.

Nondisclosure of higher profit on fixed price contract does not violate False Claims Act

September 11, 2013 by

Last week, a U.S. District Court judge in Florida held that a government contractor working under a fixed-price contract is not liable under the federal False Claims Act (“FCA”) for higher than expected profits and “failing to notify the Government that the work could be performed less expensively and charged at a lower price” than the contract price.   U.S. ex rel. Prime v. Post, Buckley, Schuh & Jernigan, Inc., and Parsons Corporation, No. 10-cv-1950 (M.D. Fl. Aug. 23, 2013).

The nature of the contract was critical to the outcome of the case. In U.S. ex rel. Prime, two contractors, Post, Buckley, Schuh & Jernigan, Inc. (“PBS&J”) and Parsons, formed a joint venture for the project (the “JV”). The JV entered into a fixed price indefinite delivery/indefinite quantity contract with the Government, under which fixed price task orders would be placed. Prices on the individual task orders were lump-sum, determined in accordance with the agreed-upon labor rates multiplied by the number of days required to complete the work, and included a profit component. The labor rates and lump-sum task order prices were a product of lengthy negotiations between the JV and Government representatives. During those negotiations, which were transcribed, the Government noted the potential for the JV to increase its profit margin by injecting greater efficiency into its performance.

Keep reading this post at http://www.mckennalong.com/publications-advisories-3378.html.

Schedule contract cancellation no big deal, experts say

April 30, 2012 by

The General Services Administration’s cancellation of Oracle Inc.’s Schedule 70 IT services contract was simply because the two could not reach an agreement on terms, deciding in the end to go their separate ways, experts say.

A senior GSA official said April 20 that it was not in the government’s best interest to continue to offer Oracle’s IT services though its Schedule. GSA officials would not provide further details.

However, one day earlier a spokeswoman said the cancellation was the result of the company not meeting the terms of the contract.

Experts said they were were not surprised by of GSA’s decision, nor did they say they believed Oracle had done something terrible.

“Since GSA isn’t suggesting suspension or debarment, and because GSA is openly referring to Oracle’s other reseller and partner channels to sell its offerings, actions leading to the cancellation are probably not egregious,” said Ray Bjorklund, vice president and chief knowledge officer at Deltek’s GovWin.

Mary Davie, assistant commissioner of the Federal Acquisition Service Office’s of Integrated Technology Services, noted April 20 that agencies could still buy software and software maintenance from Oracle’s resellers that have IT Schedule 70 contracts.

As for directly working with Oracle, Davie said, “It was determined that it was not in the best interest of the government to continue the contract.”

In the meantime, Oracle has yet to comment on GSA’s action.

The cancellation takes effect May 17.

Oracle’s Schedule contract was to run from Oct. 1, 2006, to March 28, 2012. The Schedule was last updated September 30, 2011, Bjorklund said.

“One could infer that GSA and Oracle couldn’t reach agreement on the terms and conditions needed to renew or extend the contract,” he said.

A lot of procurement changes have happened since 2006 that may have arisen between the two. There may have been differences in opinion about Oracle’s interest in its proprietary data rights, payment terms or rules that affect overseas work, Bjorklund said.

In addition, experts said the decision could stem from Oracle’s inability to comply with existing contractual stipulations because the company has changed the way it conducts business since the contract was last modified.

Mark Amtower, partner of Amtower and Company, said major corporations often struggle with GSA’s demands on sales records. Companies the size of Oracle may not be able to provide all of their sales information.

“When a worldwide company like Oracle is required to provide pricing data for every product sold, it is akin to Sisyphus pushing the rock up the hill,” he said.

GSA Schedule contracts are under the Price Reduction Clause, which requires the government to get at least the same sale price as any other client.

GSA’s move came several months after Oracle agreed to pay a $200 million fine for its failure to comply with the terms and conditions of its Schedule contract.

“Now, in addition to the fine, Oracle will have to find other ways to sell to federal customers,” Larry Allen, president of Allen Federal Business Partners, wrote in his weekly ‘The Week Ahead’ newsletter.

Overall, the reaction from experts is that the cancellation won’t be a huge blow to Oracle or its sales.

Schedule 70 is not a preferred vehicle for IT, Amtower said. It has become more or less a default vehicle.

According to Amtower, Oracle’s Schedule contract accounts for less than 7 percent of total government purchases.

Oracle’s sales are coming through other contracts, such as NASA’s Solutions for Enterprise-Wide Procurements and other Defense Department indefinite-delivery, indefinite-quantity contracts.

Bjorklund said this latest action is unlikely to dampen any interest in what Oracle offers the government; nor is it any grand-scale initiative on the part of GSA.

“When parties can’t agree, it’s just time to cancel the contract and try to start over again,” he said.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.  This article was published on Apr. 23, 2012 at http://washingtontechnology.com/Articles/2012/04/23/reaction-GSA-oracle-cancellation.aspx?s=wtdaily_240412&Page=2.

Contractor survey reflects tougher times for industry

March 7, 2012 by

Over the past year, roughly 70 percent of government contractors in a new survey saw some growth or at least no significant change in revenue from their government contracts, but government contracting still is not a booming business.

Half of more than 100 prime government contractors surveyed had revenue growth and 21 percent had relatively little change. However, 29 percent brought in less revenue, according to Grant Thornton’s 17th Annual Government Contractor Survey, released Feb. 20.

“The fact that the highest percentage of companies experienced revenue growth continues a long-term trend reported in previous surveys, indicating that government contractors are far less vulnerable than commercial companies to recessions or slow growth in the overall economy,” Grant Thornton wrote.

Thirty-one percent said they had profits of between 1 percent and 5 percent of profits. And 37 percent of companies had 6 percent and 10 percent growth compared to last year. Eight percent of companies reported profits of 15 percent or more. Only 6 percent reported breaking even or experiencing a loss.

Grant Thornton wrote that the profit rates likely result from a greater reliance on multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts.

“There is little doubt that the amount of true competition for task orders in many IDIQ contracts is far less than was the case before IDIQ contracts became so prevalent,” according to Grant Thornton’s analysis of the survey results. “This lessening of competition in the pursuit of [government] efficiency is likely a contributor to higher profit rates.”

Meanwhile, the 29 percent of companies getting less revenue than last year is the highest percentage reported in several surveys.

The high numbers indicate “that government efforts to reduce deficits are adversely impacting government contractor revenue,” the survey said.

Surveyors distributed questionnaires during the first half of 2011 and received responses from participating companies over the next several months. Financial and business statistics in the survey typically relate to fiscal years ended in 2010 or early 2011. They are treated as belonging to the current year in the survey.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.  This article appeared on Feb. 24, 2012 at http://washingtontechnology.com/articles/2012/02/24/grant-thornton-survey-contractor-revenue.aspx?s=wtdaily_280212.

Should contractors fear sequestration?

January 24, 2012 by

If sequestration of federal funds kicks in, agencies will face making deep cuts to programs and that pain will flow down to contractors, experts say.

A sequestration causes automatic, indiscriminate, across-the-board budget cuts. The failure of the so-called supercommittee to find $1.2 trillion dollars in savings over a decade triggered the cuts. They’re set to take effect Jan. 2, 2013.

As a result, contractors too “are hostages in a showdown between the president and Congress over fundamental decisions on taxing and spending,” said John Cooney, former general counsel at the Office of Management and Budget and now a partner at the Venable law firm.

He spoke Jan. 17 at a panel discussion hosted by the Professional Services Council that looked at sequestration in detail. Cooney broke down the possible routes federal officials may take to deal with the cuts.

Cooney expects agencies to:

  • Try to avoid terminating contracts. Instead, officials will reduce the amount of money obligated under their contracts.
  • Become less willing to extend contracts into their option years.
  • Obligate money for one fiscal year at a time on task order and services contracts.
  • Possibly use the prospect of the sequester’s cuts to renegotiate contracts.

He also said agency officials will more often decide to not award new contracts.

“This will be a common agency practice in year one of a sequester. Procurements that can be put off will be put off,” he said during the discussion.

With available money, agency officials will maximize contracts that meet their agency’s core duties, said Alan Chvotkin, executive vice president and counsel for the Professional Services Council, who spoke on the panel as well.

Meanwhile he expects agencies to look for more flexibility to avoid hard-and-fast commitments, such as fixed-price contracts and minimum revenue guarantees. And on the other hand, officials may use more time-and-materials contracts, which are based on labor hours and materials.

However, Chvotkin said there are some policy constraints as the Obama administration has railed against this type of contract, which places a lot of risk on the government.

IDIQs and the General Services Administration’s Multiple Award Schedules program may become more attractive to agencies. They allow for more negotiations at the task order level, he said.

Cooney had several suggestions for companies in light of what may happen. Advocate for the importance of a program and stay in close contact with a contracting officer. Realize though that the officer may not know the fate of a program until very late in the process.

Businesses should also emphasize what they can do for the agency, including the options the company is willing to agree to that may even decrease its revenue, Chvotkin said.

He recommended checking the Past Performance Information Retrieval System (PPIRS) and the Federal Awardee Performance and Integrity Information System (FAPIIS). The information needs to be correct, and it should reflect as favorably as possible on the company’s performance.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Jan. 19, 2012 at http://washingtontechnology.com/articles/2012/01/18/sequestration-effects-contracts.aspx?s=wtdaily_200112.

6 keys — and a caveat — to winning bigger contracts

July 22, 2011 by

In sports parlance, it’s known as going for the gold. The term also applies in government contracting, as more and more companies are seeking the gold to be found in the large federal indefinite-delivery, indefinite-quantity contract vehicles.

“Come July and August, the IDIQs light up like Christmas trees,” said Paul Strasser, senior vice president and general manager of Dynamics Research Corp.’s federal group. “There are task orders going out like crazy because, with the continuing  resolutions, agencies are trying to spend the money they have allocated. The IDIQ has become by far the vehicle of choice. So you have to prepare.”

“The smarter smaller companies are looking at the vehicles earlier and seeing what resources it’s going to take to win,” said Mark Amtower, co-founder of the Government Market Master certificate program at the George Mason University School of Management and a Washington Technology contributor. “The large companies have two avenues. They can buy a company that owns the IDIQ or wait until the recompete and try to win it. However, there are no guarantees for the recompete.”

1. Consider M&A to open doors

Paul Bell, president of Dell Inc.’s Global Public and Large Enterprise sector, makes no bones that Dell is taking the mergers and acquisitions route.

He said Dell is still in the early stages of its M&A activity even though the giant hardware and services company has acquired nine companies in just 18 months.

“We think this has been a really good approach for Dell,” Bell said. “Our integration of our very biggest platform, Perot Systems, is going incredibly well compared to a lot of people’s experience in that [government provider] space.”

Dell’s marketing strategy is to serve its federal clients with the unified face of one company, Bell said. “That won’t change even if we add 25 more companies, which is likely in the coming years,” he said but declined to go into specifics about future M&A targets.

DRC’s capture strategy always includes IDIQ contracts. “If you’re not playing on certain IDIQ contracts, you’re really left out in the cold,” Strasser said.

Next: Focus on key markets

2. Focus on key markets

Strasser said DRC has been successful because it concentrates on its five core market segments: homeland security, health, cybersecurity, intelligence and Defense Department strategic programs, and financial and regulatory agencies.

Its IDIQ wins include the Internal Revenue Service’s Total Information Processing Support Services contract, General Services Administration’s Alliant contract, the Army’s Program Management Support Services and Homeland Security Department’s Enterprise Acquisition Gateway for Leading Edge Solutions (EAGLE) contracts.

Strasser said DRC identifies new targets at twice-yearly strategic planning sessions during which the company determines the government’s needs and its funding levels.

Company executives also attend independent analysis sessions and participate in a number of industry associations.

“We have people in key positions to not only be aware of changes in the industry, the legislation and how the money is being budgeted but also to sort of influence those [groups],” Strasser said.

DRC’s fastest-growing market is health care, an area in which the company had virtually no business just five years ago.

Next: Invest wisely in targeted sectors

3. Invest wisely in targeted sectors

Strategic investment discussions, off-site company assessments and peer reviews that began about five years ago led to action plans for DRC to target federal health care contracts.

“Today in the federal group that I manage, we’re going to do over $30 million this year in health-related services and solutions,” Strasser said.

As an example, he cited the $19 million Tricare Evaluation, Analysis, Management and Support, a Military Health System Category 2 acquisition contract that DRC won last year thanks to its management consulting expertise. DRC is helping the Walter Reed Army Medical Center manage its Base Realignment and Closure movement.

“We identified that [opportunity] three or four years ago,” Strasser said. “We said we’re committed to that market. We identified a vehicle we thought we had an opportunity to win. We put resources and investments against that to identify the capture of that vehicle. Once we won that vehicle we invested additional resources to pursue task order opportunities there.”

Although DRC does not have a chief medical officer, its staffing does include clinicians and doctors.

Next: Plan ahead

4. Plan ahead

About a year ago, American Systems Corp., which historically sought smaller contracting vehicles, introduced a plan to create a business development system and pursue some of the larger prime contacts, including IDIQs, President and CEO Bill Hoover said. “And the good news is we’ve actually followed through on that plan.”

Hoover said that after he joined the company in 2006, ASC instituted an infrastructure investment plan to strengthen its five key market targets: command, control, communications, computers, intelligence, surveillance and reconnaissance; acquisition and logistics; readiness; homeland security; and national intelligence.

“We also expanded our recruiting function significantly as well because we knew that was going to be important, too,” Hoover said.

“I would say that probably our back office, which really is the infrastructure side of the business, was probably about 60 or 70 people. And we’ve probably increased that by about 50 percent or so,” he said.

Another goal was to strengthen ASC’s capture management program and establish a project management office to oversee the company’s IDIQ contracts and meet the needed quick turnaround on task orders.

“Although the bulk of the investment was probably back in the 2006-2007 time frame, we continue to invest in our infrastructure to make sure that we can be as responsive as we can possibly be on these opportunities,” Hoover said.

Next: Hire the right people

5. Hire the right people

In addition, ASC is aggressively expanding its pipeline of individuals “so that we have a living and breathing database of candidates for a variety of opportunities in the focused business opportunity areas that we’re interested in pursuing,” he said.

ASC uses that database to strengthen its proposals whether it is pursuing an IDIQ or a large single-award prime contract. To keep the database current and growing, executives attend job fairs and conduct informational seminars.

“We have that database of [potential contract and current] employees that we can very quickly pull together because, on the IDIQ side, you have a very rapid turnaround of proposals, and we can then provide the résumés to go after those faster-turnaround opportunities,” Hoover said.

“We’re constantly looking for individuals with the requisite experience, the requisite customer focus, the requisite capabilities,” he said, adding that this is particularly true when going after an IDIQ or task order from the intelligence community in which background checks and security clearances are critical.

“The name of the game has changed with the government predominantly using some of the larger vehicles,” said Shiv Krishnan, chairman and CEO of Indus Corp., who recently hired Terry Fitzpatrick as vice president to oversee business development and growth.

Next: Build your infrastructure

6. Build your infrastructure

Indus emerged from the small-business program about 10 years ago and positioned itself to go after large contracts, including governmentwide acquisition contracts, known as GWACs, he said.

“If you do not bid on these GWACs, then you’re shut out of opportunities coming through those [awards] and those [represent] billions of dollars of opportunities for the next seven or 10 years,” Krishnan said.

Indus set up the infrastructure to compete for GWACs by meeting government requirements, such as having an earned value management system, a government-approved purchasing system, Capability Maturity Model Integration certification, and positive past-performance evaluations.

“You need to be positioned; you need to be close to the customer,” he said. That’s what Fitzpatrick’s business development team does two to three years in advance, Krishnan added.

Indus was successful in 2009 when it bid for a spot on the 10-year, $50 billion Alliant contract. “That was a feather in our cap and the beginning of our [capture] strategy,” Krishnan said.

For several years Indus tracked the planned EAGLE II, Network Centric Solutions II and National Institutes of Health’s 10-year, $20 billion Chief Information Officer — Solutions and Partners 3 awards. When they finally were announced in 2010, the company was ready to bid on all three, Krishnan said. The company also is adding health IT capabilities.

GWACs and agency-specific enterprisewide acquisition contracts have been popular, he said, because the government does the upfront work of selecting qualified contractors, and the competition to perform the task orders is limited only to those companies.

Next: A word of caution

A word of caution

However, Kevin Plexico, vice president of research and analysis services at Deltek Input., a market research and intelligence firm, cautions against relying too heavily on GWACs, including Alliant and NASA’s Solutions for Enterprise-Wide Procurement.

“We haven’t seen them trend up in five years,” he told a gathering of contracting executives last month. “They’ve been relatively flat while those agency-specific task order-based contracts have been taking off.”

“What we’re seeing is larger agencies are establishing their own task-order based contracts,” he said. “We see that all the military branches have moved this way.”

That trend is expected to continue, effectively reducing the number of prime contract opportunities, Plexico said.

For example, he said, about half of DHS’ IT services go through the EAGLE contract.

“If you don’t have a position on EAGLE, you can effectively think about your opportunity inside DHS as being limited to the other 50 percent that’s outside the EAGLE contract,” Plexico said.

In addition, the growth of task orders has greatly reduced the time frame in which to pursue them compared to the traditional 30-, 60- or 90-day response time for traditional requests for proposals.

Plexico said a Deltek Input study of about 11,000 task orders from 18 contract vehicles found that more than half of them required contractors to respond in less than two weeks.

“So this will challenge even the most agile of contracting and bid proposal organizations to respond,” he said. “This is fundamentally changing how companies are organizing their proposal organizations.”

– About the Author: David Hubler is the associate editor of Washington Technology.  Published July 1, 2011 at http://washingtontechnology.com/articles/2011/07/05/cover-steps-to-big-contract-wins.aspx?s=wtdaily_050711