Joanne Woytek, program manager for the NASA Solutions for Enterprisewide Procurement (SEWP) IV governmentwide acquisition contract (GWAC), says that increasing its revenue is not her goal. “We’re not trying to grow or be the biggest contract vehicle, but to offer something that people find useful,” Woytek said.
But as Woytek and her staff are discovering, being useful – that is, providing top-of-the-line information technology service to agencies that use SEWP IV to buy IT products and software – leads inevitably to growth. SEWP IV has grown consistently since it began in May 2007, and the revenue generated through the program jumped from $1.358 billion in fiscal 2008 to $1.875 billion in 2009, an increase of nearly 40 percent. The program is on pace to exceed $2 billion in 2010, according to Woytek.
|“The key to our success is that we are not a contract. Rather, we are a program that supports a contract. We try to make sure that every piece of the program – products, tools, outreach and service delivery – fits together.”
Joanne Woytek, SEWP IV program manager
“SEWP is absolutely a valuable asset to federal agencies,” said Kevin Plexico, senior vice president of research and analysis at Input. “Why would purchasing officials from across government – who have a choice where they go – go to this vehicle if they didn’t view it as a valuable vehicle?”
SEWP IV is an indefinite-delivery, indefinite-quantity GWAC consisting of 38 competed prime contract holders, including 21 small businesses. All federal agencies can purchase a wide variety of advanced IT products and product-related services, including hardware and software, maintenance, warranty, installation, and product training, at fixed prices through SEWP IV. Although the contract is not a services contract, agencies can purchase the services they need to install products and software, as long the services do not exceed 10 percent of the overall contract price. About 70 agencies and 10,000 people are using SEWP IV, according to Woytek.
SEWP IV also has a contract ceiling of $5.6 billion for each of the 38 contract holders, so there is no danger that the ceiling will be breached. The contract is expected to generate $10 billion to $14 billion in sales over seven years, according to SEWP IV officials.
“The key to our success is that we are not a contract. Rather, we are a program that supports a contract,” Woytek said. “We try to make sure that every piece of the program – products, tools, outreach and service delivery – fits together.”
The SEWP Advantage
Several key factors explain SEWP’s popularity among agency procurement officials, according to government and industry officials. A major attraction is SEWP IV’s low fee of 0.5 percent, which is calculated against the order price. In addition, all fees are capped at $10,000 per order. The self-funding program uses these fees to pay for the 38 program managers and staff and other overhead expenses necessary to run the SEWP IV program.
When SEWP I was launched 17 years ago, the program charged customers 2.6 percent to use the vehicle. But SEWP’s growth has enabled the program to reduce its fee steadily over the years while also expanding customer services. Because of the cap, the actual fee percentage charged to customers in 2009 was 0.42 percent, according to the SEWP IV website.
“NASA doesn’t give us any money and we don’t give any money back to NASA. So we’re not trying to make a profit,” Woytek says.
Another appeal is SEWP IV’s broad scope and ability to add new products quickly. Customers do not search for what they need from the SEWP catalog. They search for products and solutions from SEWP contract holders. If a contractor has what the customer wants, the products and solutions are then added to the catalog after SEWP officials review them to ensure they are within the contract’s scope and are being offered at a fair and reasonable price. Typically, it takes just a day to add a new product.
Small businesses thrive under SEWP IV
Many federal agencies use the Solutions for Enterprisewide Procurement (SEWP) IV governmentwide acquisition contract to help meet their small-business goals, say program officials, who point to two important statistics to make their case:
*35 percent of SEWP IV spending goes through SEWP’s small businesses.
*6 percent of SEWP IV spending goes through SEWP’s Service Disabled Veteran-Owned Small Businesses (SDVOSB).
“These statistics show that our small businesses are widely used by government,” said Marcus Fedeli, a support contractor who serves as SEWP IV business manager.
Joanne Woytek, SEWP IV program manager, also regards the spending on veterans’ businesses to be significant. “Most SDVOSBs provide [information technology] services, so we are quite pleased with how our SDVOSB resellers are doing,” she said.
Of the 38 SEWP IV contract holders 21 are small businesses: six 8(a) small, disadvantaged businesses and 10 veteran-owned small businesses, including seven owned by service-disabled veterans. SEWP IV has set-aside authority for small businesses and SDVOSBs.
But SEWP IV’s pool of small businesses also includes those owned by women or Alaska Natives and those that are situated in historically underutilized business zones. Agencies can hold competitions but then give preference to these other subcategories in addition to 8(a) companies.
Automated Processes, One-Day Service
The watchword at SEWP is “one business day.” Program officials strive to add products, process orders, respond to inquiries and complete other tasks within one business day. “That’s our metric for everything we do,” Woytek said.
And the program typically meets this goal, contract holders said. “If you we send in an e-mail inquiry, you can expect an answer within an hour or so,” said Andy Lausch, vice president of federal sales at CDW Government LLC, a SEWP IV contractor. “Challenges are resolved quickly.”
Officials are able to quickly review and approve orders because their processes are highly automated, said Steve Charles, co-founder of and executive vice president at immixGroup, another contract holder. Charles said SEWP IV officials have been able to automate processes such as “fair opportunity,” which requires that all contract holders be given a fair opportunity to respond to requests for quotes, because the procedures are crystal clear. “You can’t automate ambiguity,” he said. As a result, “hiccups in the system get resolved within 24 hours.”
The fast turnaround got even faster in April, when SEWP IV added a chat feature that enables contractors and customers to communicate live with the SEWP program office via instant messaging. Three to four customers already use the chat tool each day. The program office is also using a commercial tool to track questions so that it builds a knowledge base to provide comprehensive answers to frequently asked questions.
Interestingly, Woytek implemented a chat function for SEWP nearly 10 years ago but withdrew it because chat tools at that time lacked the sophistication the program required. But she watched the developing technology and implemented the current tool after her own experience and some additional research showed that a chat tool could provide the level of service she demanded. Woytek said she is watching the new application closely. “It appears to be working even better than we hoped with regard to customer interaction and service,” she said.
SEWP IV’s automated services also include a Request for Quote tool that allows procurement officials to send their requirements online. SEWP officials review the returned quotes from contractors and, after approving them, send them to agency customers with documentation verifying that the order is within the contract’s scope and properly priced and that contractors received a fair opportunity to bid. The SEWP program recently added credit card ordering to the tool.
After orders have been placed, the automated tools assist with reporting, tracking and communication to ensure that customers obtain the products and solutions in a timely manner and that problems are resolved within one business day. Contractors’ performance is also monitored by an online Program Performance system with ratings in performance categories such as customer satisfaction and adherence to the contract. In addition, the SEWP IV program office publishes the average delivery time for each contract holder. All of this information is available on the SEWP IV website.
With contractor performance publicly displayed, companies are working to keep their ratings at “excellent” or “very good.” This is not surprising to Woytek. “One of the reasons we selected these companies for SEWP IV was because they rated highly on past performance. We expected them to be good,” she said.
SEWP IV Recognized for Customer Focus
How committed are SEWP IV officials to processing purchase orders within one day? When federal agencies flood the SEWP IV office with end-of-the-fiscal-year purchases each September, SEWP officials extend their hours to meet their self-imposed 24-hour goal.
“On September 30, we’re here until midnight or until the last delivery order gets processed that day,” said Joanne Woytek, SEWP IV program manager, adding that her staff once processed 800 orders in one day. “Everyone in the office pitches in and helps out.”
This commitment to customers has not gone unnoticed. Washington Technology last year called the SEWP program “the gold standard for customer service,” and named SEWP IV as one of nine contracts that have changed how federal agencies buy technology. “The managers running the contract see both agencies and their contractors as customers,” Washington Technology said. “The focus on service has helped SEWP survive and thrive into its fourth generation.”
Similarly, in a survey of 160 federal IT and procurement professionals by MeriTalk, SEWP IV was named as the “Federal IT King of the Contracts.” SEWP IV was the top rated federal contracting vehicle with a 93 percent approval rating from survey participants. SEWP IV’s approval rating was 7 percentage points higher than the second-ranked contracting vehicle, the General Service Administration’s 8(a) Stars program.
Among their top recommendations, survey respondents said that contracting vehicles should provide more transparency into the past performance of their contract holders. SEWP IV does precisely that with its online performance rating system.