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6 keys — and a caveat — to winning bigger contracts

July 7, 2011 By ei2admin

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

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

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

1. Consider M&A to open doors

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

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

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

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

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

Next: Focus on key markets

2. Focus on key markets

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

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

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

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

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

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

Next: Invest wisely in targeted sectors

3. Invest wisely in targeted sectors

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

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

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

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

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

Next: Plan ahead

4. Plan ahead

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

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

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

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

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

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

Next: Hire the right people

5. Hire the right people

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

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

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

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

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

Next: Build your infrastructure

6. Build your infrastructure

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

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

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

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

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

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

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

Next: A word of caution

A word of caution

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

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

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

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

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

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

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

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

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

— About the Author: David Hubler is the associate editor of Washington Technology.   Published 7/1/2011 at http://washingtontechnology.com/articles/2011/07/05/cover-steps-to-big-contract-wins.aspx?s=wtdaily_060711

Filed Under: Contracting Tips Tagged With: Alliant, DHS, EAGLE, GWAC, IDIQ, market research, NASA, proposal preparation, SEWP, task orders

SEWP IV’s customer service spurs rapid growth; sales to top $2 billion in fiscal 2010

July 15, 2010 By ei2admin

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.

Joanne 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.

SEWP IV Numbers

“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.”

SEWP IV Sales

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.

SEWP IV Snapshot

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. 

______________________________________________________________________

Steve LeSueur is a freelance writer for 1105 Government Information Group’s Custom Media unit. This report was commissioned by the Custom Media Group, an independent editorial arm of 1105 Government Information Group. Specific topics are chosen in response to interest from the vendor community; however, sponsors are not guaranteed content contribution or review of content before publication. For more information about 1105 Government Information Group Custom Media, please email us at GIGCustomMedia@1105govinfo.com

Filed Under: Contracting News Tagged With: 8(a), federal contracting, IT, NASA, SDVOSB, service disabled, SEWP, small business, small disadvantaged, technology

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