Improving Transparency in Federal Government May Improve Innovation

A while back, Nick Wakeman, of Washington Technology, went on a self-described “rant” about the lack of transparency in awarding task orders on certain contract vehicles. 

Allow me to continue the rant.

One only needs to do a cursory review of the Interagency Contract Directory (contractdirectory.gov) to see the enormous amount of contract vehicles across government. By applying a layer of data analysis on top of it, a frustrating pattern emerges at the lack of information available on awards off of these vehicles, or information on the vehicles to begin with.

According to the website:

…The main purpose of ICD is to help agencies take advantage of interagency contracts by supporting market research and the identification of suitable contracts that can facilitate the efficient and effective placement of orders, including with small and disadvantaged businesses. The new ICD will strengthen both of these goals by making the tool more intuitive and easier to use… 

As Nick mentioned is his blog:

…This task order is worth $224.4 million. That’s nearly a quarter of a billion dollars. This is a big deal. Why keep it hidden?...

Why indeed. 

I agree wholeheartedly with Nick that transparency into larger awards should be mandatory, as there simply is too much secrecy with the amount of money flowing through all the contract vehicles across government. Perhaps the $10 million threshold Nick mentions might be a good start. I know many small businesses spend countless hours trying to find out information about these activities, with little success unless you have some insider knowledge. 

As Nick mentions, disclosure would not only bring more transparency to the process, but valuable data can be another component to offer small businesses an important pathway to opportunities which are currently closed. 

However, I also want to take transparency a step further in the pre-solicitation phase, by finally allowing some transparency to shine on responses to sources sought notices across government. 

One of the main issues here is that procurement personnel often complain about the poor responses, or lack of responses, by small businesses. Granted there is very little review of why this might be occurring, but perhaps another data point on Fedbizopps.gov might be something to explore.

Currently, firms can list themselves as an “interested party”, and appear under the tab labeled Interested Vendors List. What if we took this a step further, eliminated the Interested Vendors List, and actually created a way to show firms that have actually responded, and create a tab with this data called “Respondents”?

This would eliminate many of the firms that are simply fishing or unqualified, unscrupulous legal firms who are “experts in protests” advertising on these notices, scammers and spammers, and provide real data on who is responding and their capabilities. 

I know I always wonder: 

• Whatever happened to my response?
• Was it received?
• Is there any opportunity for follow up?
• Who I might team with?
• What were the results?

Perhaps with this data, small businesses can find more opportunities to find teaming partners, and for firms to find complementary solutions to improve service delivery and performance. 

Of course this would all need to be automated, as the last thing we want, or need to do, is put further burdens on the acquisition workforce. 

Transparency is always a good thing to improve competition, opportunities for small businesses, and procurement outcomes. Let’s open the curtains and see what is possible.

Want to Win Government Contracts? Do Your Homework

http://www.nxtasia.com

One of the most common complaints that I hear from Contracting Officers in the federal government is the frustration with small businesses.

These frustrations often revolve around responses from small business, or lack thereof, to market research, especially responding to Requests for Information (RFI). These issues are also often exacerbated by small businesses that seemingly waste the time of government officials by not being focused in their business development strategies and outreach to government.

Why? The common denominator is often the lack of education about how federal government contracting works.

Here are some tips to ensure you are educated and ready to help build productive relationships with federal prospects:

Know Thyself

It sounds rather self-explanatory, but there is noting worse that witnessing this train wreck, which regretfully I have seen all to often:

Federal prospect: “So what does your company do?”

Small business: ”Well, we do some cyber security. Combined with some project management. We are also a SVDOSB….”

After about 5 minutes of this, the federal prospect is looking at her watch, says thank you, and is thrilled to be heading out the door or going on to the next person.

You need to be able to describe your products and services very succinctly, and be able to demonstrate the value proposition of your offerings in a typical “Elevator Speech” of no more than 30 seconds.

Articulate what you do, discuss your differentiation, and stay focused.

Don’t get intimated

Going to events around Washington, D.C. can be a challenge. Not only is it hard enough to get access to procurement officials, but also you normally have to wait in line behind large business representatives that have easier access and the resources to get it.

Understand that outside of events, you have to focus your messaging to your target market. The government has a 23% goal of awarding government contracts to small businesses. Granted it is not reality, nonetheless it is an opportunity to use any socioeconomic designation to your advantage. Further, looking at opportunities where the government is doing simplified acquisition procedures, normally set aside for small businesses, is another avenue to help increase your chances without having to go against the large firms in open market bids.

Be good at paperwork and administrative hoops to jump through

Government contracting is not for the faint of heart, as the restrictions, regulations, and laws can be a minefield, and can potentially destroy companies who do not understand them.

The Small Business Administration has many resources available to set you on the right path to compliance and ensuring your company is setup for success.

Procurement Technical Assistance Centers are also available to help small businesses compete successfully in the government marketplace.

Gain past performance through subcontracting

Prime contracts are the ultimate goal, but another path to success is to work as a subcontractor for larger companies. Although large firms not only have small business databases and small business liaisons to find potential teaming partners, don't count on firms beating down your doors.

These big contractors have dozens of companies coming to them with hat in hand all the time, expecting to get business from them simply because they have some socioeconomic designation. This alone will not get you any interest.

Large businesses will be most receptive when you have identified opportunities for which the large business can see immediate potential for an award. With this potential, now the large business can bring to bear their influence, past performance, and market influence.

Research government databases and build your pipeline

Most small business advocates at agencies will tell small businesses to go to Federal Business Opportunities, commonly referred to as FedBizOpps, to look for contract opportunities at their agency. Although this is not particularly bad advice, firms that think they can simply use FedBizOpps to find opportunities will typically not be successful.

Small businesses mistakenly think that they can simply bid on opportunities posted on FedBizOpps, and they stand a chance. The reality is that firms spend months, if not years, in the capture management process marketing their goods,building good will, and the relationships and the brand awareness necessary to lower the risk to the government of selecting your firm for award.

One of the best tools available for pipeline and opportunity development is the Federal Procurement Data System (FPDS-NG). The FPDS-NG system is a key open source for data related to the initial award and subsequent modification of agency contracts and contract vehicles. While it is the Government's primary repository for historical contracting data, FPDS-NG can be a key tool to analyze opportunities and develop your strategy to put you ahead of your competition, find teaming opportunities, build a pipeline, and expand your horizon to win contracts before they are posted on FedBizOpps.

It’s ultimately about the relationships

Although it is very difficult to get access to government officials, relationships are the ultimate successful factor for a winning small business government contractor. You can't just rely on cold calling and mailing brochures, since the government official probably will not get them anyway.

So while getting your firm compliant and doing paperwork is important, pounding the pavement and networking to meet the government decision makers, and those at large contractors, is what will ultimately lead to success. You should also be doing that in person, so pick the events you want to go to wisely. You could spend a fortune going to events literally every day in Washington, D.C. alone.

Lastly, focus your marketing on the two or three agencies where you have the best chance of success by aligning your goods and services with those of your target agency where you have the best chance of winning business.

Government contracting is extremely difficult, and has only become more challenging with budget cuts and sequestration. However, it can be extremely lucrative, and also very rewarding to work on some of the most important missions and challenges government faces.

Focus yourself and your marketing, do you homework, and the world of government contracting will be an exciting and rewarding opportunity to expand your business prospects and your company’s future.

Time versus Money: Taxpayers Take a Bath Again

A recent disturbing story about facilities management by the General Services Administration (GSA) in Chattanooga is a perfect template for how poor (or little) acquisition planning, combined with inadequate market research, creates an environment where questionable acquisition strategy decisions are created. The result is a typical one, where sole-source contracts are created at prices that almost invariable go in only one direction, and quickly surpass any budgets or estimates.

…Taxpayers will foot a $5.75 million rental bill over the 10-year term. The new offices will cost the federal government $1.35 million more than the U.S. General Services Administration's initial estimate over the next decade and triple the amount now spent to house federal prosecutors in Chattanooga…

Here we go, time to buckle up:

…But real estate experts question why the government didn't solicit bids for needed space, which will cost $23,366 per employee for the first five years in the new fifth-floor office at Warehouse Row.

For that much, the U.S. attorney's office could double its number of attorneys and staff to 56 and pay each new worker $11.23 per hour. For the same amount, the feds could buy a median-priced home for each of its employees within the next seven years…

According to the Department of Justice (DoJ), who was the federal customer that GSA was serving, security and proximity where important factors, combined with accessibility standards.

Translation – Our requirements are so unique that our “market research” shows only one source able to meet these requirements. 

…"They would be paying the highest rate in the city," said David DeVaney, president of NAI Charter Real Estate. "You can find space in Chattanooga all day long at $22 per square foot, for full-service, including a generous build-out."

The rent is more than double the previous rate in the same building -- $14 per square foot -- and well above Warehouse Row's advertised lease rate of $16 per square foot.

By not using competitive bidding, federal officials ignored more than 1 million available square feet of office space downtown…

Sole source justifications are of course a vital tool in any procurement toolbox. However, adequate justification is required to circumvent regulations and guidance for ensuring taxpayers will not take a bath.

Regarding the requirements for justification to lease the space that met all the DoJ requirements, which was the impetus for the lack of competition, not to mention the fuzzy math estimates:

…But those justifications weren't mentioned in the original no-bid request…

So the reasons for the sole-source contract were not explained in the justification? Really?

"With the current lease set to expire and facing the need for additional space, the U.S. attorney's office in Chattanooga worked in conjunction with GSA to find an office in proximity to the federal courthouse that met all suitability and security requirements in accordance with applicable regulations," Killian wrote in an email. "GSA conducted a market analysis and determined that the Warehouse Row location was the only location that met all requirements that would serve the office and the community."

However, neither Killian nor the GSA would say what, exactly, drove the rent to the top of the charts.

Translation: We needed the space and we need it yesterday. We checked the boxes, so let’s move forward.

Competition drive price reductions, and in the case of real estate, allows for the government to aggressively negotiate better prices, as real estate managers need tenants to make money. Unused real estate just sits there unproductive.

According to these real estate experts, presumably aware of the DoJ’s requirements, they all unanimously agreed that this was a bad deal.

Translation - Taxpayers lose again.

Are One-on-Ones Necessary for Market Research?

As the government looks for way to save money and improve performance, the topic of adopting best practices for IT acquisitions continues to be at the forefront of the conversation. However, implementing those best practices continue to be challenging, especially in the thought process when comes to one-on-one sessions.

When it comes to market research, the government continues to struggle to open the door to industry, thus robbing itself of improvements on the overall acquisition process. Specifically, requirements continue to be developed in a vacuum, exacerbated by poorly defined stakeholders analysis and moving forward without understanding needs.

In the commercial sector, the closer firms get to signing a contract, the more collaboration occurs. However, the opposite is true in the federal sector. Incoming contractors should be given all the information that is not proprietary to the incumbent to be successful, including budgets and prices currently paid for incumbent services.

However, some government procurement officials disagree. According to these officials, it is up to industry to respond fully and openly with responses to an RFI and during an Industry Day. Further, it is simply a matter of time versus value, as industry will simply use the opportunity in a one-on-one to strengthen their position during capture management by trying to slant government requirements in their direction.

The more government communicates with industry, the more likely the government will get quality services at realistic prices. Although it has almost become standard practice for government buyers to hold an Industry Day, it is assumed that no further communications with industry are necessary. Further, many buying offices simply will not conduct one-on-one meetings with vendors because of incorrectly assuming that favoritism and ethical issues are land mines that should be avoided at all costs.

Questions for industry and government:

1. How do we work together to change these perceptions? 
2. Are one-on-ones worth the time and effort, from both perspectives? 
3. What other tools are available to increase collaboration?