While Congress debates the virtues of the Biden administration’s blow-out budget proposal for 2022, contractors should be adjusting their approaches to their federal customers. With some of the dynamics now at work, federal sales and marketing consultant Larry Allen joined Federal Drive with Tom Temin.
Insight by Galvanize: During this webinar Marianne Roth, the chief risk officer of the Consumer Financial Protection Bureau, will provide a deep dive into enterprise risk management at CFPB. Additionally, Dan Zitting, the CEO of Galvanize, will discuss how making better use of data and technology can help federal agencies more rapidly allow decision makers address and mitigate risks.
Tom Temin: Larry, you’re writing this week that besides the big GWACs, which come and go, and certain vehicles do come and go, that contractors need to look at the alternatives and always be dynamic here. So what’s your best advice for the year ahead?
Larry Allen: Tom, my best advice for service contractors, especially, is to consider some new ways of reaching out to your federal customer that you don’t use now. Over the last 15 to 25 years, industry and government have placed and increased importance on government wide acquisition contracts, GWACs. They’re fast, at least to do task orders through streamlined competition. But GWACs are starting to have some issues. On one hand, it takes a really long time to put a GWAC in place, on another you can get some protests all along the way that further delays the process. So what I’m recommending that companies do is to consider other ways of doing business in case you find that the favorite GWAC that you want to use, or a new GWAC you want to use doesn’t really meet your customers need.
Tom Temin: Yes. And that’s a good point. Because take a look at CIO-SP4 for, how long was that in gestation just to get the solicitation out, and then lord knows how long until they get to the protests and there’s actually an open marketplace there.
Larry Allen: That’s right. So it’ll take a little while. And I think we probably still won’t see any CIO-SP4 business. We certainly won’t see any during this fiscal year Tom. So sometime, FY 22 will be when we start to see business maybe. But in the meantime, business has to be transacted. So what are you looking at as a contractor? Well, I’ve got three ideas for companies. One is to remember streamlined acquisition methods like basic ordering agreements. Now, not every agency uses these, but a lot of offices in the Department of Defense do use basic ordering agreements, or BOAs. They’re agreements that talk about technical specifications and overall capabilities in contracting without talking about pricing until you get to the task order level. So that’s a pretty streamlined way to put a contract in place. In fact, if the scope of your BOA matches or comes close to matching the scope of an existing contract, you could just take the terms and conditions and proof of capabilities and transferred over and then negotiate pricing on your BOA when you need to. So I think that’s something that industry ought to look into further, promote that with not just agencies that use it now, but with other agencies that might be able to use that streamlined acquisition.
Tom Temin: And then there’s the single agency contract.
Larry Allen: Single agency contract, Tom, both you and I, for good or for ill, remember federal landscape and the time before GWACs, when Jurassic Park contract dinosaurs roamed the tundra. And what agencies used to buy services then were single agency service contracts. And while those can certainly increase overhead for government customer and government contractor, they are a way to make sure you get specifically defined solutions that your agency or office needs. You don’t have to try to fit something that may not be flexible enough to meet your need into your requirement. You set the contract up with the purpose of meeting that requirement. And history has shown that some agencies actually prefer to buy services that way. It’s not like single agency contracts have stopped in the era of GWACs, it’s just that they’re not as prevalent as they used to be. I think they might come back a little bit more as agencies feel like doing their own thing. And just because they might be a little bit more costly, that hasn’t been a showstopper in the past, Tom, and I’m not sure that it would be now.
Tom Temin: We’re speaking with Larry Allen, federal sales and marketing consultant and president of Allen Federal Business Partners. And then there is the durable, seemingly unconquerable GSA multiple award schedule.
Larry Allen: Right. We keep coming back to the schedule for a couple of reasons, Tom. One is that over time, the GSA Schedule has proven to be a more popular venue than many GWAC contracts, even ones that were highly touted and advertised as kind of scheduled killers, if you will. Only to find that the flexibility of the schedule, the known quantity that scheduled contracts represent, really carried the day for many transactions in the services realm. While customers can’t do cost plus task orders via the schedules program, they can do for a fixed price and time material labor hour. And, Tom, I think people need to remember that firm fixed price is the government’s preferred way to acquire services, and the schedule definitely has that one covered. You don’t have to wait for the contract to be negotiated, it’s already in place. GSA has gone through streamlining to make the program even more flexible than it has been before. There are proven contractors on that program that can meet your need, and to low contract access fee. So there’s a lot there, I think to say, if the GWAC that you thought was going to be your promise land doesn’t end up being so, or maybe your favorite contract mines down and there doesn’t seem to be a good alternative follow on for it. The schedule, basic ordering agreements or single agency agreements may be some things that contractors want to explore with their customers a little bit more.
Tom Temin: And I also wanted to ask you about the possible fallout from this sudden increase in small business emphasis that the Biden administration is talking about, 50% more of federal contracting then goes to small business now, should, they’re saying – and that could change the landscape somewhat also.
Larry Allen: Tom, I think it’s going to change the landscape in ways that are obvious and not obvious. I mean, the obvious way is if the administration is successful, and it does end up awarding significantly more contracts to small disadvantaged businesses, that certainly is going to reallocate who wins contract awards at the prime contractor level. But we’re already seeing, Tom, some, I’m not sure if there are unintended consequences, but there are inevitable consequences of this policy. And that is, I’m hearing a lot from companies who are talking to their government contacts saying, “hey you don’t need to come see us. You’re not a small disadvantaged business. All we’re going to be talking to now moving forward are small, disadvantaged businesses, large businesses aren’t going to get any time to talk.” Well, that’s a potential issue. When you reduce opportunities for government industry communication,. There’s a track record, Tom, a track record that acquisitions begin to be less well defined, that the government increases the scope of a project simply because it doesn’t know enough to create a tightly focused project. It lengthens the procurement lead time, it can lead to more protests, because people are are unsure about what the government’s really going after. And we’ve seen this happen. That’s one of the reasons why we have policies and practices in place now that promote industry-government conversations, and that works well for everybody. You can’t expect the government contracting officer to be an expert in countless areas of things that they have to acquire, they buy professional services in the morning, they may buy munitions in the afternoon, and then may do a logistics contract in the afternoon. That is a lot of different areas that they have to deal with, and they can’t be experts in every one, they kind of need that industry input. And if they’re starting to talk only to a certain segment of contractors, I think they’re going to lose out on expertise. I think they’re going to lose out on good ideas and a sense of really what the state of the market is for best solutions and how to acquire them. There probably will be some other fallouts, Tom, but one of the things that we’re already seeing is this hit to industry-government communications. And I’ve been in this business long enough to know that anytime that takes a hit, you can expect the acquisition system to not work as efficiently as it could.
Tom Temin: Larry Allen is president of Allen Federal Business Partners. Thanks so much.
Larry Allen: Tom, thank you very much, and I wish your listeners happy selling.