Monday, June 29, 2009

Comments on GWAC Programs Cause Unnecessary Controversy

Comments made by Ed O'Hare, assistant commissioner of the Office of Integrated Technology Services in GSA's Federal Acquisition Service, seemed to have created a bit of controversy in regards to the future of Government Wide Acquisition Contracts. Federal Computer Week reported on the story, and according to experts:

…They say the federal IT market’s sales have been driving GSA to end and merge GWACs for several years now. There are too many GWACs, causing too much overlap of services. The result is scattered sales while the cost of running the contracts still dips deeply into GSA’s pockets….

Immediately following the report by FCW, Mr. O’Hare clarified his comments by stating that GSA is fully committed to GWAC programs and their future. Although I understand his need to clarify his comments, I believe the statement from experts above to be accurate. I am not stating, nor did I believe the comments of the story indicated that GWACs were being phased-out. In fact, I was a bit surprised at the response by GSA officials at what seemed to be positive signs of streamlining business operations to improve customer service, and the encouragement by industry. Mr. O'Hare predicted GSA will more than likely merge the GWAC program with its schedules program, and I think this makes sense. However, no one is assuming this to be policy, only a prediction based on market needs and trends.

…O'Hare said during the panel discussion he believes eventually combining the contracting vehicles would be beneficial to taxpayers.

"The reasons are efficiency and effectiveness," O'Hare said. "When vendors have to bid on multiple contracts that [creates] costs and those come back to the taxpayer. It's about lowering the costs of products and services."…

Current GWACs such as Answer, Millennia and Millennia Lite, will not be renewed because they have been replaced by the Alliant and Alliant Small Business contracts. Further streamlining efforts should be reviewed to see where overlaps and redundancy exist to phase-out other GWACs in favor of the Alliant programs.

Overall, I believe industry reacted positively to Mr. O’Hare’s comments, by noting that GSA will need to phase-out underperforming GWACs, such as Commerce Information Technology Solutions-NexGen, and take over several GWACs, such as COMMITS from the Commerce Department, in an effort to streamline operations in the future.

The issue with the GWAC programs is the seemingly difficult efforts by both industry and GSA based in part on overlapping requirements and the cost to manage multiple programs.

…GWACs are expensive for government and industry and should be pared down, said Bill Perlowitz, vice president of advanced technology at Apptis. No one should be surprised that the agency is saying it won’t renew many GWACs, particularly given the Obama administration’s desire for a more efficient government…

…“GSA would be streamlining things” to close down or merge GWACs into its schedules program, said Hope Lane, officer of government contracts consulting at Aronson and Co…

The fact is that GSA has invested considerable resources to award the Alliant and Alliant Small Business GWACs, which have a large variety of services to choose from. Therefore, industry is questioning GWAC operations and seemingly applauding efforts to reconsider the use of other GWACs in favor of Alliant. I know I was when I read these comments and articles.

To further streamline efforts and help increase efficiency in GSA operations, the GWAC and schedule programs should be merged to centralize buying. Granted many issues have to be addressed, including the use of cost-type arrangements and socioeconomic goals, but I believe industry sentiment was best stated by Courtney Fairchild, President of Global Services, in regards to merging GWACs and the schedule program:

...To merge the GWAC and schedules programs would be “consistent with the spirit and message of the creation of the recent Federal Acquisition Service,”…

When the Federal Technology Service and the Federal Supply Service merged into FAS at GSA, primary objectives included eliminating redundant contracts and streamline operations. It is this focus on lowering costs, increasing efficiency, and realizing better returns to the taxpayer that I believe Mr. O’Hare was signaling, and was the main focus area of the GWAC programs comments and opinion by industry.

1 comment:

  1. The use of Alliant to replace Millenia and Answer and Millenia Lite was a decision made in 2004 by Stephen Perry after he convened a Contract Vehicle Review Board. The reduction in the number of GSA managed IT GWACs is not new news.

    However, all these articles about the GWACs over the past week seem to feed the spin machine rather than help all interested parties better understand the facts.

    They fail to mention that GWAC contracts are fully competed acquisitions that respond to stated government requirements. If anyone believes that the award of a GSA Schedule contract involves real industry competition to meet a set of requirements, they are seriously ignorant of the FAR. With the Schedules, commercial entities propose offerings they want to sell to government. To award a Schedule contract, Government only needs to determine that the prices are reasonable. No bona fide need or requirement, and no true competition comes into play until a customer agency comes forth with a statement of work and multiple quotes are obtained from Schedule holders or E-Buy is used to find the best value solution. The average size of Schedule buy is small compared to the average buy on Millenia.

    IT GWACs are designed to provide solutions to more complex sets of requirements than one would generally acquire from Schedule 70. Other contracting features can be brought into play with GWACs that cannot be done with Schedules (e.g., cost reimbursible features). The reason that different kinds of contracts are offered by the FAS Office of Integrated Technology Services is to enable government agencies to take advantage of the full range of contracting types and options in order to achieve the best match with their particular set of requirements.

    Many private sector IT companies don't like GWACs because they have to sharpen their pencils more in order to get a GWAC contract to use in doing business with the government. And then they have to sharpen it again when they compete for specific task orders. Under GWACs, industry profit margins are more likely to be slimmer, but when it comes time to bid on task order business, their field of industry competitors is narrowed to only those who hold that GWAC contract. Of course, the lobbying by industry, and the political environment presented so many hoops and potholes along the way to awarding Alliant that many more companies were awarded Alliant contracts than GSA had in place for Answer, Millennia, and Millennia Lite, combined. This end result does dilute the value that an IT GWAC can bring to the government buyer, and to the industry partner.

    Reporters have done a lousy job of reporting about GSA's IT GWACs. Lack of competition in the Govt IT new media market seems to have its own negative effects, too.