How government contractors can grow in today’s market
Tuesday, July 25, 2017
For the past several years, government spending on contracts has been stagnant or decreased.
The Government Accountability Office (GAO) Contracting Data Analysis Assessment of Government-wide Trends Report (March 2017) found "that while defense obligations to buy products and services decreased by almost 31 percent from fiscal year 2011 through 2015, from $399 billion to $274 billion, civilian obligations remained fairly steady" at an average $128.3 billion.
The Trump administration's 2018 budget is likely to change spending dynamics with a proposed $54 billion increase in defense spending and decreases in civilian agencies ranging from a high of 33 percent at the Department of State to a low of 1 percent for the National Aeronautics and Space Administration (NASA).
The case for acquiring GWACs/IDIQs
So, how can government contractors grow in an increasingly competitive and stagnant market?
One answer might be by leveraging Government-Wide Acquisition Contracts (GWACs) or Indefinite Delivery/Indefinite Quantity (IDIQ) contracts to grow business. GWACs and IDIQs are multiple award contracts (MACs) that enable one or more government agencies to purchase an unlimited number of products or services for a specified time.
Here are four reasons why the use of GWACs/IDIQs will increase and the importance of acquiring them:
- Government has used GWACs, IDIQs, blank purchase agreements (BPAs) and schedules to procure half of all services and products since 2011.
- GWACs/IDIQs are likely to become more attractive to government acquisition offices that were affected by the hiring freeze in early 2017 and that are likely to be affected by budget cuts in 2018, baby boomer retirements and staff members leaving to accept higher paying jobs in private industry.
- GWAC/IDIQ offices provide agencies with many benefits for a small fee, including the ability to meet quick acquisition time frames, access to experienced acquisition staff, precompeted pools of contractors likely to raise the competitive bid pool, ability to meet socioeconomic goals, and freedom from protests for bids above a certain dollar value.
- Many mature GWACs/IDIQs have rapidly increased their market share since 2013, as depicted in the table below, while the overall number of MACs has decreased from 2,892 in 2012 to 2,653 in 2016, according to Bloomberg Government.
Plan your strategy to identify the right GWACs/IDIQs
With more than 2,000 GWACS/IDIQs to choose from, which are right for your company?
We recommend creating a three- to five-year plan to position your company to acquire the right GWACs/IDIQs for long-term growth. Selecting the right GWAC/IDIQ can help your company limit the competition, give your customer speedy acquisition alternatives, help reduce bid and proposal (B&P) costs and provide many other benefits.
When creating your strategy, we urge you to conduct due diligence. In addition to selecting IDIQs that match your NAICS, size standard or socioeconomic group, use these questions to help select the right GWAC/IDIQ for your company:
- Is there a strategic alignment of objectives between my company and the agency?
- Do my experience and skills support the accomplishment of agency mission objectives?
- How well can I contribute to agency objectives in comparison to my competitors?
- Can I influence the GWAC/IDIQ technical or management requirements?
- How well can I cover all the requirements listed in the request for proposal (RFP)?
- What teaming partners do I need to cover requirements gaps?
- Is my program management office (PMO) sufficiently mature to manage the contract?
- Do I have the expertise and bandwidth to staff task order positions quickly?
- Will success cause me to grow out of the size standard and lose my place on the GWAC/IDIQ before the end of the period of performance?
- Do I have the B&P budget and bandwidth to support the continual stream of task order RFPs emanating from the GWAC/IDIQ?
Implement your strategy plan to acquire the right IDIQ
After you have selected a target, implement your pre-RFP strategy using these seven tips to win the GWAC/IDIQ:
- Start early (one-plus years) before the acquisition solution is established.
- Learn as much as possible about the existing contracts, customers the new GWAC/IDIQ might support and competitors. Read agency publications and websites.
- Attend professional groups, agency conferences and industry days where you have the opportunity learn more about the customers' objectives.
- Implement a Call Plan to meet the contracting officer (CO) and customers to learn about programmatic objectives, constraints, risks and the acquisition solution.
- Create white papers or respond to requests for information (RFI) using the knowledge you collected for this procurement, lessons learned on similar GWACS/IDIQs and sample RFPs that might help the agency formulate their acquisition solution.
- Use information from your research and customer interviews to improve your chances of winning by sharpening your past performance, identifying key personnel or improving your management and technical solutions.
- If you have requirements gaps, use the time to establish relationships with potential teaming partners.
2017-2019 will provide a bumper crop of GWACs/IDIQs to bid on, including, but limited to those listed in the table below.
1 near-term and 1 far-term option to consider
Near-term IDIQ: SBEAS – estimated RFP date: August 2017
The purpose of Small Business Enterprise Applications Solutions IDIQ (SBEAS) is to provide a wide range of IT solutions to the Air Force ranging from software development to cybersecurity to technology refresh services. SBEAS has garnered high interest in the contractor community — more than 150 firms attended the industry day, and the Air Force received nearly 100 questions on its second draft RFP.
The Air Force has been specific about the type of firms to whom it will make roughly 40 SBEAS awards. For example, the Air Force is looking for:
- Level 2 (at a minimum) for either Capability Maturity Model Integration (CMMI) for Development or CMMI for Services. For approved Joint Ventures, at least 50 percent of the venturers must hold the appraisal level;
- A self-score of at least 4,200 points on the self-scoring worksheet (however, winners will probably score 90 percent or more of the points); and
- Six past performance references that demonstrate the offeror's ability to cover the technical requirements.
In addition, SBEAS does not weight past performance equally. Sub-factor 1: Life-cycle Software Services is significantly more important than all other subfactors combined. Sub-factor 2: Cybersecurity is more important than sub-factor 3. Sub-factor 3: Information Technology Business Analysis is least important.
To ensure you accumulate the highest number of points, we recommend conducting one or more reviews for compliance and consistency, and conducting independent evaluations of your score to verify the accuracy of your score and to ensure you get the highest number of points possible.
Far-term IDIQ: GSA Connections – estimated RFP date: November 2019
The purpose of GSA Connections is to provide telecom infrastructure support services to government agencies. The popularity of Connections II has dramatically increased since its inception in October 2011. In 2012, Connections II did $85.5 million in business, and in 2016 it did $219.9 million in business.
Connections II has 21 contractors ranging from large telecom providers like AT&T and Verizon to integrators such as General Dynamics and SAIC. Their contracts are set to expire in January 2021, and the current Connections II NAICS is 517110 Wired Telecommunications Carriers.
The telecom landscape changes as more agencies are move from wired to Cloud solutions and new telecom technologies emerge. Now is the time to plan your long-term strategy for acquiring Connections III by learning more about what GSA customers want, emerging technology, and communicating with GSA through the numerous events they sponsor and industry days and conferences that they attend.
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