In this 4 part post we are going to explore a trend in how the U.S. Government is acquiring Information Technology (IT) services. More and more agencies are developing Performance Work Statements (PWS) with every possible type of IT service (including associated item acquisition) into comprehensive, umbrella arrangements. There are several variations on this approach but the most current one seems to be the “all inclusive package”. In Part 1 of this post we are going to look at how vendors perceive what I am calling “Tera-Scope” opportunities.
Old Way: The Government needs a specific set of IT services over a multi-year period of time that will accomplish one large overall objective (such as the full life cycle of a computer business system). Companies 1, 2 and 3 compete. Company 2 wins the contract. Company 2 hires subcontractors to fill capacity or skill gaps and begins working with the Government to achieve the Government’s objectives. Next month the Government needs another specific set of IT Services over a multi-year period of time (let’s say it’s Help Desk/Customer Care). Companies 1, 4 and 5 compete. Company 4 wins the contract. Company 4 hires subcontractors to fill capacity or skill gaps and begins working with the Government to achieve the Government’s objectives. And so on…., resulting in a lot of contracts to manage.
New Way: The Government writes a “Tera-Scope” Performance Work Statement (PWS). It covers every aspect of IT services and products including property acquisition and installation, facilities management, operations, software development and sustainment, systems engineering, technology assessment, information assurance, help desk/customer care, training, administrative support and the kitchen sink. Only winners of a contract will get work within the Tera-Scope from that Agency. Any of the work can be at the project or Enterprise level. It has extended periods of performance for the base year and the options. Companies 1, 2, 3, 4 and 5 look at this Tera-Scope and realize their core competencies are in there so if they don’t participate they will be cut off from future Government work with this customer. In some cases the Government doesn’t want proposals that cherry pick among the task areas of the Tera-Scope: offers must cover all the task areas. Technical approach is more important than price so you have to be good at all the task areas. You have to have demonstrated experience in all of the task areas. You have to be prepared to deliver products and services world-wide. Various combinations of businesses are required to ensure socio-economic considerations are met. The only way to get there is for Companies 1, 2, 3, 4 and 5 to find complementary companies with which to join forces and, if necessary, pick up an SDVOSB or 8(a) Company along the way.
But wait, there’s more: the Government intends to award many contracts to many Teams. So even after a Team gets a contract it still has to compete for the actual work. There may be a guaranteed minimum, but after that you’re still competing; albeit within a smaller group.
So, several Non-Disclosure Agreements later negotiations take place to establish Teaming Agreements between the designated Lead Company and the other partners. The proposal to the Government has to include all of the Teaming Agreements and a description of how the teams will collaborate, all the labor categories and rates applicable to each Team Member and how the Team Lead will ensure no Operational Conflicts of Interest impede contract performance ….BECAUSE…. all the members of a team are permitted by the Government’s Tera-Scope requirements to participate in more than one proposal!
From this point the Government can take one of two approaches: either treat the Team Lead as a prime contractor so that all task orders are written to that company which then delegates the work within the Team, or set up each company on the Team as a prime contractor so that the Government can issue task orders directly to each company. (But note that in both cases the Team Lead is responsible for all Team Members’ performance).
While Price may not be as important as the Technical Approach, Management Approach and Past Performance the Tera-Scope RFP will make sure that pricing is as complex as the rest of this bigger-than-life opportunity. It may require that labor categories and rates must be offered to cover Firm Fixed Price rates, Cost Reimbursable rates and Time & Materials rates. That way the Government can choose the pricing arrangement best suited to the Tera-Scope’s vast array of possible task orders. Remember: rates for all Team Members must be included in the proposal as applicable.
Remember also that bid and proposal preparation costs are not allowable. Remember that especially if you don’t win one of the Tera-Scope awards! If you don’t win you won’t have a chance of recouping some of your investment related to setting up your team. That includes negotiating all of the agreements, compiling 4-5 companies’ relevant past performance information, gathering Key Personnel resumes from participating companies, formatting all your inputs for a consistent look and then going over your checklist to be sure you’ve met all the government’s instructions for submission of an acceptable proposal. This is a disincentive for Team Leadership: many companies will be looking for opportunities to join someone else’s team.
The amount of information that must be brought together into one proposal from all participating Team members is staggering. The details of how each Team member will function, what skills it brings that provide Excellence to the overall team, rates, percentages, task area “territories” and agreements that cover how a Member’s participation in another Team will work all must be hammered out before the RFP is issued so that the proposal can be completed and submitted on time.
From a contractor’s perspective, especially a small business, Tera-Scope looks pretty terrifying. In our next post we will take a look at what is going on from the Government’s perspective.