New dawn for GWACs

These contracts ? with an aggregate ceiling of nearly $290 billion ? will dominate the government market for the next five years, perhaps longer. Contractors ranging from huge players, such as EDS Corp., to promising small businesses, such as ITS Corp. of Oxnard, Calif., are forming teams and developing marketing plans.

Getting shut out of these contracts potentially can handicap a company's ability to compete as a prime contractor in the government market, industry officials said.

Buyers have flocked to the vehicles because they offer wider choices and are faster and more flexible than developing a contract from scratch.

"The expedited procurement process is not a new trend, per se, but we're starting to see it come to fruition," said Megan Gamse, manager of defense opportunities at federal market research firm Input Inc. With GWACs, the government wants to have a whittled-down, predetermined list of available vendors, "so that goods and services can be provided quickly," she said.

Input developed the accompanying chart, which matches the new contract (the sunrise contract) with the contract or contracts it replaces (the sunset contracts).

"The government has been moving away from buying commodity-type products and services and moving into totally integrated solutions or managed services," said James Fraser, EDS' program manager for the Alliant IT program. "GWAC vehicles are the way to go to acquire those types of services."

Smarter Move

For the government, GWACs reduce administrative burdens and costs and let agencies gain efficiencies through consolidation, said Rosanne Satterfield, senior vice president of communications and marketing at ITS.

"We're seeing a migration away from direct-award contracts to the use of the governmentwide acquisition vehicle," she said. "That trend [is] happening because there are smaller vehicles that are being recompeted or have been recompeted under a General Services Administration business portfolio vehicle."

GWACs also are being developed for small businesses to help agencies reach its small-business percentage goals for contract awards. Two GWACs geared to small businesses are:

• GSA's $5 billion Veteran Technology Services (VETS) contract for businesses owned by service-disabled veterans
  
• The $15 billion Alliant Small Business set-aside contract, which is separate from the $50 billion Alliant Full and Open contract.

It's vital for big and small companies alike to land positions on GWACs to maintain visibility and keep competitive, members of industry said.

GWACs, other task order contracts and GSA schedules, such as Schedule 70 for IT, compose the bulk of many vendors' government business. ITS, for example, gets about 85 percent of its federal business from just such a combination, Satterfield said. ITS plans to bid on Alliant as a prime, she said. The company is a prime contractor on GSA's Answer contract.

Task order contracts, either agency-specific or GWACs, account for 65 percent of SRA International Inc.'s business, said Jeffrey Westerhoff, senior vice president of GWACs. Fairfax, Va.-based SRA will submit a proposal for the Alliant contract, he said.

At Unisys Corp., GWACs and task orders pull in about two-thirds of the company's $1 billion in annual government revenue, said Greg Baroni, president of the Blue Bell, Pa., company's global public sector. The company is pursuing Alliant, Encore II, NASA's upcoming Scientific and Engineering Workstation Procurement (SEWP) IV contract, and the Homeland Security Department's $45 billion Enterprise Acquisition Gateway for Leading Edge solutions (Eagle) IT support services contract as a prime contractor, he said.

It's important for companies to get on one of the GWACs "partly because with GSA's consolidation into more substantive vehicles, there are fewer of them," Baroni said.

Other Avenues

Some companies that don't have a significant GWAC presence are creating dedicated positions to pursue and manage these large contracts. Harris Corp., Melbourne, Fla., about six months ago hired Karen Smith for its newly created director of GWAC programs position.

Harris will bid on Alliant as a prime contractor, Smith said, but she declined to mention other GWACs the company plans to pursue.

GWACs also help ensure a steady flow of government dollars for companies that win task orders under them.

In the sometimes dynamic, even volatile federal IT market, GWACs give companies a "balanced portfolio that allows for maximum flexibility to be able to respond to our customers' needs," ITS' Satterfield said.

EDS bids on six to eight GWACS and other big task orders and schedule contracts a year, said Kim Luke, vice president of GWAC contracts. EDS will bid on Networx as a subcontractor on AT&T Corp.'s team. As a prime, EDS is pursuing Alliant, Encore II, GSA's $175 million Satcom II satellite contract and DHS' Eagle contract, he said.

IBM Corp. plans to chase ITES II and Alliant as a prime contractor and is supporting small businesses on Alliant Small Business and GSA's VETS contracts, said Susan Horton, IBM's acquisition service center manager.

"This is a high stakes environment, and if you don't have a position on [a GWAC], then you may not have such an easy market position," Horton said.

2006 Sunrise/Sunset Contract List

Staff Writer Roseanne Gerin can be reached at rgerin@postnewsweektech.com.