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Maybe not shocking, but not a total surprise either, when the General Services Administration canceled its troubled Alliant 2 small business program. The planned governmentwide acquisition contract was hobbled by protests and never really got off the ground. Yet the need for such a GWAC apparently still exists. With what might come instead, Federal Drive with Tom Temin turned to Bloomberg Government IT analyst Chris Cornillie.

Interview transcript:

Tom Temin: Chris, good to have you on.

Chris Cornillie: Great to be with you, Tom.

Tom Temin: First of all, why do you think fundamentally that GSA decided to give up on this? I mean, they’ve been at it for almost five years.

Chris Cornillie: I think that they’re giving up on it now for a number of reasons. First of all, because I don’t think that they see their way out of the bid protests that they’ve faced ever since the awards were made in February of 2018. There were more than a dozen bid protests about cost accounting standards and other issues with the the initial proposal, and the way that they ended up deciding that they would re compete or reevaluate the proposal, open them up for additional protests, and you have things like the Cybersecurity Maturity Model Certification for DoD. You have a lot of these Alliant 1 expiring task orders and the need to do something with them in the next generation. So I think there are a lot of different factors, but overall, that’s why they decided to pull the plug now.

Tom Temin: Might a better approach have been something like Navy Seaport-e, which is now moving to Seaport Next Generation, where they’ve got 1800 or 1900 different contractors — basically, it’s a you want to be on, be on.

Chris Cornillie: Right. I think that’s a fair point. And there have been a number of experts in the industry that are talking about pushing the competition to the task order level instead of just to get on the contract. And I think there’s a lot of evidence to dictate that would be a successful approach. The Seaport is really just another federal supply schedule. What GSA is doing right now with its multiple award schedule for IT, formerly the schedule 70. It’s trying to work out new special item numbers and try to make that contract more attractive to specific pools. But fundamentally there are just a lot of other it contracts out there. There’s CIO-SP3, there’s NASA SEWP, I think it just wasn’t worth the headache to proceed with an A2SB in this state.

Tom Temin: There’s one little subtlety in there that was pointed out to me by Larry Allen, one of the analysts watch this kind of thing and used to be head of the Federal Procurement Coalition, and that is that under MAS, under the multiple award schedule program, you cannot do cost plus deals, you can only do a fixed price, commercial type of transactions. And the government has been on a push to get fixed prices into services contracts for a long time, but they’re not all there yet. So you have to have a vehicle then that allows cost plus correct?

Chris Cornillie: Correct — and I think that that is why they’re pushing to get this done. But there are still other vehicles that that allow for cost plus, and my assessment is that you will probably see agencies that have been working with Alliance Small Business try to move over some of these expiring task orders to like a CIO-SP3. It’s going to be very difficult to do that, but it’s really their their best option.

Tom Temin: And of course, the idea of cost plus is what led to the cost accounting snafu in the first place. So it’s easier said than done, I guess they’re finding out.

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Chris Cornillie: Sure.

Tom Temin: Now, the GSA in the release talking about this, they were pretty forthright, we’ve cancelled it. But then they were kind of vague in my view of what they were going to do next. They said, well things have changed, as you pointed out, the CMMC is one big change that’s coming to the market, but they also said that they would create pools of qualified contractors in the different subcategories of small business — 8(a), women owned, service disabled veteran owned, HUBZone. Is your interpretation of that that there would be a separate GWAC for all of those categories or what?

Chris Cornillie: I think that they’re really exploring the option of doing separate GWAC for women owned, for HUBZone. There is already a GWAC for service disabled veteran owned small businesses, that’s two. The thing is that that is really not very heavily utilized contract as of yet. And maybe what the GSA can try to do is to push agencies to use that more. As you may know, GSA recently extended 8(a) Stars II, raised the ceiling by $7 billion. The recompete 8(a) Stars III is going to have a $50 billion ceiling. So there’s a lot that GSA can do in this space without Alliant 2.

Tom Temin: Just if you would elaborate for people that may not know all the details what Stars III is all about

Chris Cornillie: 8(a) STars III is an IT services vehicle for Small Business Administration designated 8(a) businesses. It’s one of GSA’s most successful vehicles to date. Earlier this spring 8(a) Stars II hit its ceiling value well ahead of schedule, meaning that agencies are rushing to use it, it’s been successful. Contractors like using it, they’ve actually had to extend it, and then they planned a much larger ceiling for the recompete. That will be a lot of interest for small businesses in this space. The request for proposal was released on Monday, and we at Bloomberg Government are going to be tracking that closely.

Tom Temin: And if you have 1000, 2000, 2500 contractors on a vehicle, and as you mentioned earlier, the competition then is at the task order level. How does that really differ in reality from just full and open competition for every task order, and simply the agency says this is only open to small businesses?

Chris Cornillie: That’s a great question. Ideally, when you’re setting up a contract where you have potentially thousands of vendors on it, you are you’re doing some due diligence, right. You’re ensuring that that only those contractors who want to be on that contract are able to perform that work. But at the same time, it’s more difficult to bring these sort of large scale protests when you’re competing at the task order level, not every vendor on the market is able to see those and has preference or has standing to challenge. So I think it does narrow the field a little bit, but it does so in a way that allows the government to get on with its business.

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Tom Temin: And would you say to that, fundamentally, there is a demand for this type of vehicle, just in light of the fact that the government doesn’t ever quite meet its statutory small business contracting goals. Certain agencies do, but I think when you add up government wide every year, it’s always a percentage point or so short of what what the law demands of small business contracting?

Chris Cornillie: I think by and large the federal government is trying to attract small businesses as fast as it can and so that the success of contracts like 8(a) Stars II 8(a) Stars III CIO-SP3. These are vital contracts. A lot of the innovation that’s taking place in the government sector is coming from these small businesses. Although the federal government isn’t necessarily hitting its statutory goals at this point, it’s really a goal of federal acquisition policy to get better at that and to keep the market open for these businesses.

Tom Temin: And final question on that idea of the market changing and we mentioned CMMC, the certification for cybersecurity maturity, but also different technologies are coming in. I mean, the government still has a long way to go on you name it, artificial intelligence and data analytics and drone swarms and blockchain and all of these things, and so maybe there’s a whole new class of vendors that could be included as they think about this more broadly.

Chris Cornillie: I think that you may be onto something here. The fact that agencies like the Department of Defense are looking to expand the non traditional small business space with groups like the DIU, with the commercial solutions opening as as an acquisition mechanism– yeah absolutely. But when you when you talk about certifications, like CMMC, you almost have two good goals competing against one another, right. You’re trying to expand the supplier base, but at the same time, certifications like CMMC are going to put a lot of pressure on those small businesses that are right on the cusp of deciding whether or not that they want to stay in the market. So you you have to find a way to get that kind of innovation in emerging technology, but at the same time, make sure that those companies can do it securely. So a lot for federal procurement officers to think about and

Tom Temin: Finally, would you say the GSA needs to hurry because I think it Bloomberg reported among others recently that DHS was looking to launch its own department wide acquisition vehicle for small business. And if that happens across the board, then a government wide one could be less relevant.

Chris Cornillie: I think you’re actually starting to see federal agencies push back, maybe not push back but look at some of these category management directives and say, well we are going to we’re going to try something on our own. I think the State Department for example, is looking to to consolidate a lot of its it hardware spending, and they’re not sure whether they’re going to use a GWAC or they’re going to develop their own vehicle. I think cybersecurity and the need to prevent industrial espionage is really pushing agencies to think about cybersecurity in a new way and that’s driving a lot of these requirements.

Tom Temin: Chris Cornillie is an IT analyst with Bloomberg government. Thanks so much.

Chris Cornillie: Great to be with you Tom.

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