I don’t usually pay too much attention to when companies move locations and open new offices, but Raytheon’s recent move to consolidate the headquarters of its new Intelligence, Information and Services business in Northern Virginia is worth commenting on.
It’s emblematic of what executives are telling me is a top priority – staying close to customers.
Raytheon’s IIS business is a recent creation. In March the company realigned and combined its Intelligence and Information Systems business with its Technical Services business.
Lynn Dugle, who was running the Intelligence and Information Systems out of Garland, Texas, was named the president of the new business, which has about $5.5 billion in revenue. The Technical Services business was based in Dulles, Va.
Some rank-and-file Raytheon people told me as recently as a week ago that they were wondering which location would win out as the headquarters, and this week, the company picked Dulles.
It makes sense, because look at Raytheon’s competitors: Lockheed, Northrop Grumman, General Dynamics, Boeing and others. All either have their corporate headquarters in the Washington D.C. area, or their major IT and information systems business is located here.
As I’m told repeatedly, this business is about relationships and if your leadership isn’t located near the leadership of your biggest customers, then you have to be at some sort of a disadvantage.
When the market was flush with growth, it probably worked to have your leadership fly in several times a month, but as the competition intensifies in the market, you can’t take that risk.
So I’d lay odds that Raytheon picked Dulles as much for competitive reasons as for the usual tax and other enticements localities to attract businesses.
Posted on May 03, 2013 at 10:43 AM0 comments
Another five companies have filed protests against the Air Force’s NetCents 2 Products contract awards. That brings the total to 10 and the window for more protests is still open.
Sources tell me tat there were 24 bidders considered technically acceptable for the contract. Eight companies were picked as winners by the Air Force in the second round of the troubled $6.9 billion IT contract. Ten have filed protests, so there are potentially six more unhappy contractors that could file protests with the Government Accountability Office.
As one executive told me, nothing really changed between round one and round two of the contract, in terms of the information that the Air Force was collecting, or the reasoning behind their award decisions.
Well, one thing did change – five companies who won in round one were losers in round two, and nearly all of those have filed protests.
The new batch of protesters are:
- Red River Computer Co. – a winner in round one
- immixTechnology Inc.
- Blue Tech Inc. – a winner in round one
- Global Technology Resources Inc. – a winner in round one
- Integration Technologies Group
They join the other protestors:
- Dell Federal Systems,
- M2 Technology – a winner in round one.
- Sterling Computerschnology
The only winner from round one who hasn’t filed a protest is GTSI, but as I said, the window is still open. Companies have 10 calendar days to file a protest after receiving their debrief.
I’m hearing that a couple different things have raised the ire of the losing bidders. One is involving how unbalanced pricing was evaluated. Unbalanced pricing is where companies bid one price for a product in year one, a lower price in year two, and lower again in subsequent years. Often after year two, the product usually is near obsolete, so the price bid on years three and beyond is often minimal.
How prices slide can be gamed by companies to improve their pricing evaluation, but the Air Force had told companies they were going to be strict on this aspect. Some losing bidders were conservative in how they priced products, but feel the Air Force didn’t live up to the expectation they set.
Probably more problematic for the Air Force is the view that the Air Force did little to no verification of pricing and other aspects of the bid, and instead relied on self-certification.
As an executive told me, “What did they do for a year? They could have gone on CNET and looked things up.”
A third area revolves around compliance with FAR regulations, particularly trade regulations that restrict the countries where components in products are sourced. This source told me that there are non-compliant products – which can be cheaper – on several bids.
If the Air Force is headed down the same path as it did a year ago, where they had to pull back their awards, it is hard to imagine there being much patience for a third round.
They’ll either take some sort of corrective action, which could include adding more companies -- perhaps all of them -- to the contract.
Or, the Air Force could cancel the contract and turn to another vehicle to deliver IT products.
A cancellation would be embarrassing, and likely a career ender for someone, but it also might be the best way to move forward.
GAO’s decision due dates on the individual protests have a deadline to file ranging from Aug. 5 for Force3, the first protester, to Aug. 8 for the latest batch.
So, it looks like it might be a hot summer for the Air Force.
Posted on May 02, 2013 at 8:38 AM0 comments
Is HR your untapped strategic strength?
Over the last couple years I’ve noticed a change in how senior executives talk about people. For years, I felt like a lot of lip service was paid to this topic but not much else.
But that might be changing. More executives are talking to me about people and culture as a business imperative because the market is so tight and competitive.
They see keeping and retaining people as an important way to control costs and to maintain relationships with customers. It’s also critical to how institutional knowledge is captured and shared.
This was in my mind when I accepted the opportunity to moderate a panel at an event sponsored by the human resources group, WTPF, a business forum for HR professionals. WTPF used to stand for Washington Technical Personnel Form when it was founded in 1960. The co-sponsor was the Washington chapter of the National Association of African Americans in Human Resources.
The theme was the Future of HR – a c-suite view. The panelists were Rodney Whitmore, senior VP and chief human resources officer for the Economist Group, David Fink, chief human resources officer of EADS North America, and Carrolyn Bostick, assistant administrator for HR management at the FAA.
It was probably the easiest moderating gig I’ve ever had because these three knocked it out of the park. The audience, of course, was primarily HR professionals, but the themes that these three talked about were core to the strategies and success of their various organizations, and would resonate with any business leader.
Some key takeaways about the value of HR:
HR as coach
Each talked about their role in helping their CEOs or agency leaders and peers be successful by being a resource for improving their performance. One even said that he had a CEO who asked for help with his temper.
Get to know the business
HR needs to work closely with other departments including business development, so they know when major opportunities are coming, and so they can have the structure in place to rapidly hire people. They also need to know what the company does. How else can they be effective recruiters?
Get out of the swim lanes
HR can be more than just benefits and compensation administrators. They should be involved in succession planning, corporate structure and new initiatives.
HR as mediator
In the c-suite and across business units, there are lots of competitive, driven people. There are going to be conflicts. There are going to be disagreements. HR can play a critical role in mediating these disagreements, and in finding positive resolutions. Listening is a critical skill.
HR has an important role in looking at competitors and learning how they do business, how they recruit, where they recruit from, and what kind of advantages they have and how those advantages can be countered.
It was an enlightening session. Unfortunately, I broke with tradition and I didn’t have a notebook, so I couldn’t jot down a lot of the details, but I came away impressed by the role HR can play, particularly now that the role is becoming more prominent in the executive suite.
All three commented several times on having a seat at the table, and how that is an opportunity to help their company or organization succeed, particular in times when company succeed. That role means being an agenda setter as well as a facilitator.
In my work experience, HR was often seen as the catch-all for work no one else wanted to do, but perhaps they might become an example of how everyone in an organization should take a strategic view, and look for ways to help their company succeed.
Posted on May 01, 2013 at 11:27 AM0 comments