Stan Soloway

OPINION

Government sends mixed signals with LPTA, small biz initiatives

In a market that lacks clarity and consistency, it is interesting to watch specific procurements or trends to see what path they take and what broader meaning might be gleaned from them. Sometimes one is pleasantly surprised, other times, much less so.

This month two items come to mind.

The DLA Subsistence Total Order and Receipt Electronic System (STORES) contract is critical to DLA’s mission. The program plays a vital role in providing crucial software maintenance, support and occasional upgrades for the agency’s worldwide goods delivery system.

With STORES set for a recompete, the request for proposals is out, and reactions from the community have been unenthusiastic.

Several potential bidders have expressed concern that a contract of this size and complexity is being procured on a “lowest price, technically acceptable” basis. In their view, the fact that the work involves software development for something as large and complex as STORES makes the contract a poor choice for an LPTA award, particularly in light of the spate of recent LPTA awards in which the technical acceptability bar was set at minimal levels.

As I’ve written before, and as others including Defense Undersecretary Frank Kendall have said, LPTA just isn’t an appropriate evaluation methodology when buying other than truly commoditized goods or services.

To make matters worse, in the RFP, DLA makes clear that it reserves the right to conduct a reverse auction on top of the LPTA award. That sounds both illogical and dangerous to say the least.

To their credit, DLA leadership has been very responsive to the questions we have raised. And their perspective is, not surprisingly, somewhat different.

They believe that their emphasis on confirming the qualifications of key personnel and requiring a detailed work breakdown structure and relevant past performance suggests that the “minimum” bar is reasonably stringent.

They also highlight that the developmental requirements of the contract are minimal because the system is fully functional and stable with core code that is well established. In other words, while not exactly a commodity service, in their view, the stable, well known and generally routine requirements associated with STORES make it a sound candidate for a smartly executed procurement. 

Both might be right. With the right technical requirements, an LPTA procurement need not be a bottom-feeding exercise. Thus, DLA’s argument might have merit.

On the other hand, recent history across government raises equally fair concern and skepticism; however, we won’t know for certain until the procurement is completed and we can see more clearly how the process worked.

Meanwhile, talk has been circulating for some time that the General Services Administration has decided to emphasize small business contracting more than ever before.

Some insiders say they have been told that virtually all requirements must be set aside for small business or that they must get permission from top agency leadership to do otherwise. 

If GSA were an agency with a poor record in small business contracting, the policy would make some sense. It has worked in some agencies and failed in others. But that is not the case at GSA. In 2012, almost 40 percent of GSA’s prime contracting dollars went to small business. An admirable achievement to be sure. But why then, would there be such pressure to do even more now? 

For example, when looking at specific GSA contract vehicles, such as the Technical Acquisition Support Services contract (TASS), fair questions are being raised as to why so little work is being procured through that already-competed multiple award vehicle and instead is being put on new small business contracts or other existing small business vehicles which were never created to support the kind of work awarded under TASS. 

The three contract holders are all mid-tier firms, not giant companies. Indeed, two of them are, by any definition, small mid-tier firms who have a hard enough time competing in that dreaded no-man’s land. Is GSA on a new path? Has the “policy” been miscommunicated or misunderstood? What are the current contract holders, or other bidders on other potential contracts, to think about a marketplace in which they spend hundreds of thousands of dollars to compete only to have the customer decide mid-stream to not use the contract vehicle as planned?

The answer as to who is right with regard to DLA STORES will come in due time, when the procurement is completed.

As for GSA, needed insight and information could some sooner, if the agency more clearly communicates with the vendor community. And depending on the answer, that in itself might drive an important, broader conversation.

About the Author

Stan Soloway is president and chief executive officer of the Professional Services Council.

Reader Comments

Sat, Jul 26, 2014 Gavin Mischbuccha

It is a sad day when bright people say well known things over and over as if they are new and expect some breakthrough. Let us pray: good is by obviously a big commodity category. So is transportation and warehousing. Ordering tools and systems abound, and many of them are good and require little tailoring to mil necessity. The integration is not the greatest challenge imaginable. Accordingly, low price is overwhelmingly the path to take. Sure, one can stumble, but only if DLA tries to wire this for someone or a gang of industry miscreants takes the misguided step of trying to blunderbuss this procurement because it did not fit their dream way of fulfilling requirements. All of the factors for massive f allure have been gathered around a nugget of need and requirements that actually make good sense. We look forward to agile and honest reporting of what unfolds next

Fri, Jul 25, 2014 Sasha Romanova

Stan, great article! Thank you for discussion this topic. I agree that multiple-award contract vehicles (MACs/GWACs/IDIQs) are not used to their full potential by government buyers. These programs are underestimated despite numerous time-saving & cost-saving benefits of using them. There are many options beyond TASS program, including solutions specifically for awarding work to small businesses. A more powerful program for IT acquisition is the GSA 8(a) STARS II GWAC. Any federal agency can award work to this elite 600-company group of highly technically qualified IT contractors. All of the STARS II holders are trusted government contractors with excellent past performance records. When procuring IT services with STARS II, work may be awarded on sole-source basis to any of the contract holders, up to $4 million per order, up to $10B program ceiling. At the same time the buying agency qualifies for "Competed Award" and "8(a) Small Business" credits. This is possible because the STARS II contract itself is pre-competed among experienced 8(a) small business IT contractors. Regards, Sasha Romanova

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