Get ready to listen

What your customers want ? experience and communication

"It's a matter of communicating expectations. Then both sides have to live up to it." ? Lisa Pellegrin, Robbins-Gioia
Lisa Pellegrin (left) and Darci Allen of Robbins-Gioia

Rick Steele

"Lessons learned can demonstrate that the contractor has a continual process improvement process [in place] and can actually provide a distinctive advantage over a contractor that is silent on management controls." ? Lisa Akers, General Services Administration

Rick Steele

Government agencies expect a lot from their contractors, and as the administration tightens budgets and Congress increases its oversight, some of those expectations are inevitably rising.

So what do agencies want from you? Clear communications, a track record of success and a willingness to share risk are, and will continue to be, critically important, according to a new survey Washington Technology conducted of agency officials who read Government Computer News, Washington Technology's sister publication.

The survey, conducted in March, is not scientific but indicates that government officials expect contractors to act as partners on complex information technology projects, sharing responsibility and risk. They want companies to prove that they can succeed, and they want to head off trouble before it starts by maintaining good communications.

Past as prologue

A company's record of past performance is often the key element that determines whether the company is hired for new work. We asked respondents how highly they value private-sector past performance, which is especially important for companies who have far more experience in the commercial market than in government. We also asked how forgiving they are of mistakes from the past.

Not surprisingly, 90 percent said that good performance on similar work for the government is the most important experience. When the work isn't particularly similar, past performance is much less impressive, but even then, government experience rates highly.

Past performance in the private sector matters most when the work is similar, with 30 percent of respondents saying it is most important and 48 percent saying somewhat important.

"The contracting community has begun to take past performance more and more seriously," said Al Pines, vice president at Vienna, Va.-based consulting firm Century Planning Associates Inc. "It used to be treated more or less as an administrative item. It had to get done, but it wasn't looked at as a real opportunity to promote yourself with your customer. That's begun to change."

Agencies may take it even more seriously than they let on. "It is a big part of the government's security blanket," Pines said. "They want to see some legitimate past-performance items that are well documented, that they can feel secure about."
The typical government contracting officer wants to see your government record first, said Chip Mather, senior vice president at Acquisition Solutions Inc., of Arlington, Va., and a former procurement official for the Air Force.

Although commercial success may be less relevant, it shows government officials that you know what you're doing, said Larry Allen, executive vice president of the Coalition for Government Procurement. For companies that don't have extensive government experience, private-sector experience provides something to show.

"It's a competitive market in the private sector, and it's a check in your column saying you have a solution somebody's taken advantage of," he said.

Most of the respondents said they consider both prime contractor and subcontractor experience when evaluating bidders, but 22 percent said they're more interested in how companies performed in the prime role. In some cases, it depends on just what the contract calls for, but Mather said that for many acquisition officials, prime contracting experience is the most important.

But sometimes it depends on whether the government is looking for a technical solution or a contractor with the ability to lead a team, said Lisa Akers,
director of the General Services Administration's Federal Systems Integration and Management Center.

Warts and all

Some companies, however, are nervous about their past-performance evaluations because their records have blemishes in the form of failed projects. Projects fail for any number of reasons, and in most cases, both the agency and the contractor bear some responsibility. But when contracting officers look at a bid, companies wonder whether they should admit to a bad experience and, if they do, how agency officials will evaluate it. In our survey, 70 percent of the respondents said they would consider hiring a company with a serious blemish if the company can demonstrate that it has taken significant steps to prevent such a thing from happening again, and the problem occurred long ago. But 30 percent said a serious failure on a company's record could be enough to shut the door on them.

"It's every company's fear of having one of those on your record," said Stacy Mendler, chief operating officer at Alion Science and Technology Corp., based in McLean, Va. "You never know when it's going to impact your future business or not. I have seen customers take it very seriously, but what they look for [are] the steps you've taken to correct it, and is it corrected. Everyone runs into issues. The question is how you address that."

A company that has had a project with serious problems or one that failed should describe the steps the company has taken to correct the problems and prevent a recurrence, Akers said. "Lessons learned can demonstrate that the contractor has a continual process improvement process [in place] and can actually provide a distinctive advantage over a contractor that is silent on management controls," she said.

Companies can emphasize their quality assurance methods, project reviews and risk management programs to show their commitment to success, she added.

In most cases, agencies ask for past performance within the past three years, so a bad experience in the more distant past may not even come up, said Darci Allen, director of proposals for the civil division at Robbins-Gioia LLC, based in Alexandria, Va. But if the failure happened more recently, "I don't think you're helping yourself by hiding that fact," she said.

Companies can't gloss over failures, said Greg Baroni, president of the global public sector division at Unisys Corp. Federal agencies have access to a Web-enabled database called the Past Performance Information Retrieval System, which contracting officers use to report on companies' performance and to check into bidders. "You can't make it up," Baroni said.

In some cases, companies should be glad to have problems, said Don Scott, senior vice president of EDS Corp.'s U.S. Government Solutions Division, based in Herndon, Va. "Sometimes it is better to have had a problem and recovered than to have never had the problem at all," he said. "Recovering is very important. If you can do it in a timely way, turn around and make [the agency] look good, you have a friend forever."

Some companies make the mistake of trying to minimize a failure by saying that the people responsible are no longer with the company, Pines said. That has twin drawbacks: It suggests that the company left unexamined the structural or procedural factors that may have contributed to the problem and also means that any past successes those people were responsible for are negated just as much as the failure might be.

"It really is about the remedial actions that you take," Pines said. "What have you changed? To the extent that you have taken some remedial actions that are believable, I think you're going to get some receptivity."

Past-performance failures are more likely to hurt smaller companies, said Phil Kiviat, a partner at Guerra Kiviat. Some large companies have had large contract failures and terminations but don't seem to have been hurt by them, he said.
A company with a single bad experience juxtaposed against a series of successes probably just had unfortunate circumstances in the one exception, Mather said.
"The question is, what is bad past performance? What caused the bad past performance? You have to dig deep to find that out," he said. "If there's a series of them you can be more suspicious."

Strong communications

Many performance failures, and indeed, many less severe problems, can be prevented with good communications. Asked to rank nine factors that could contribute to problems or failures of contracts, 27 percent of the survey respondents listed poor communication as the primary reason. Another 19 percent said inexperienced contractor employees were the leading reason, and 18 percent said problems were caused when the agency changed requirements.

Analysts said many of the other possible reasons, such as unrealistic customer expectations or political pressures, are things that can be headed off with good communication upfront and throughout the life of the contract or task order.
"Too often, communication decreases as problems surface and trust fades," Akers said. "Troubled times are when communication is most vital."

Performance-based acquisitions are ideally suited to encourage communication because the government must specify its expectations for the contractor and how it will measure performance, she said.

"It always a two-way street," said Lisa Pellegrin, a communications consultant at Robbins-Gioia. "One of the key things that happens when you start a contracting relationship is that both sides need to communicate what's needed in setting up the contract. It's a matter of communicating expectations. Then both sides have to live up to it."

It's the responsibility of agencies to create an environment where contractors feel safe pointing out emerging problems, Allen said. Some agencies criticize or even penalize contractors when problems develop, making it tempting for companies to try to hide problems. Allen suggested that the opposite should hold: The penalty should be for contractors that see a problem and try to keep the agency from learning of it.

To succeed, the agency and prime contractor need to have shared goals and expectations, and that comes only through communication, Mather said.
"I often find a situation that could easily be fixed if they could sit down" and talk to each other, he said. "But it's more finger-pointing. I equate it to two people strangling each other as they go off the cliff."

Shared goals and expectations lead to a leveling of priorities, he said. "If you're wide awake at 2 o'clock in the morning worried about something, you should know the contractor is wide awake worried about the same thing," he said. "In the best case, you should be sleeping soundly because you know the contractor is worried."

Mendler said open communication early on helps companies allocate their resources.
"We recognize that a project manager on the industry side...can make or break a project," she said. In many cases, she said, a company assigns project managers to many different projects, making it impossible to devote much attention to any one of them.

Information in the request for proposals helps companies calculate how hands-on the project manager is going to have to be and how much time will be needed for effective management, she said. "Many times the RFP is not specific, so you have to gauge based on experience the level of the project manager or the amount of time committed. ... It leaves it open for contractors to define for themselves what's required."

Good communications and strong project management are a recipe for success, she said. "When you have it, you just are amazed at how much more effective the program is," she said. "It stays on schedule and the deliverables are exactly as everyone anticipated."

Pines said companies should put specific communications plans into their proposals.

"People do a nice job of writing up project planning, project controls, but you really need to think a little bit about human interaction," he said. "How do you structure that, and how do you put up a plan as part of your proposal, and how do you execute it? People don't really put a lot of weight to that, but it carries a lot of value."

The presence of a communication plan gives agencies more confidence in the company, he said. "The government has a good sense that this is a coherent, closed-loop communications plan that is going to make sure the right people get the information at the right time. ... You want the plan to reflect that you have tailored your thought process to the particular performance. Nothing will warm an evaluator's heart more."

Associate Editor Michael Hardy can be reached at mhardy@1105govinfo.com.

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