GSA offers more details on huge Connections II contract

Earlier this week, the General Services Administration invited industry leaders to hear the agency’s ideas for a draft request for proposals for its $10 billion, 10-year Connections II acquisition, and industry had plenty to say.

The agency’s presentation lasted less than half an hour, but the attendees’s questions and comments took more than twice as long and delved more deeply into nitty-gritty details.

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Price tag lures bidders to Connections II

Questions have arisen about the need for a follow-on to GSA’s Connections I in view of what has become the agency’s all-inclusive, go-to information technology vehicle Alliant.

“There’s a lot of conversation about overlap,” said Karl Krumbholz, GSA's deputy assistant commissioner of network services. “But we’ve really thought a lot about it, and we feel this is a clear requirement.”

“Obviously, the Alliant contract is much broader,” said Warren Suss, president of Suss Consulting LLC. Some of the same companies are likely to win spots on both Alliant and Connections II, but Connections II likely will simplify acquisition for agencies. “So agencies would know that, if they have this kind of opportunity, going to this vehicle, they’re going to get companies that are prequalified for the type of work they need.”

“With a much broader umbrella contract like Alliant, they would risk having [to review bids from] a bunch of companies that would be prequalified but not necessarily in the focused area,” he added.

The complementary relationship between Connections II and Networx is unique, Krumbholz said. “And I’ll tell you, the agencies that use Connections I love it. I say, if it works, don’t give it up.”

The $10B questions

GSA had earlier solicited responses to the proposed Connections II acquisition and received more than 600 comments and questions from more than 30 companies, Krumbholz said.

Many of the questions, such as those about service-level agreements or whether an operations support system would be required, were unanswerable at the RFP level because they would be addressed at the task-order level by the ordering agency, said Fred Haines, GSA's program manager for Connections II.

Pricing was also a major concern and difficult to pin down. For proposal purposes, pricing will be normalized for an apples-to-apples comparison, Haines said, but specific prices at the task-order level will vary.

The process for evaluating prices also generated a lot of comment. “We’re developing a thorough, comprehensive, independent government cost estimate, especially for labor rates,” said Anna Brown, supervisory contracting officer in GSA’s Network Services Acquisition Division.

“We surveyed 400 contracts and industry sources to establish a broad but reasonable range on both sides of a midpoint for each labor category,” she added. Prices will be tested against those estimates to determine what is “fair and reasonable.”

However, unlike in the draft RFP, price will be significantly less important than other combined factors.

Questions also arose about:

• Supply chain risk management. Because relevant standards do not yet exist, several companies suggested making the requirement optional. GSA will look into it, Haines said, but “contractors should propose plans consistent with C.3.3 with the intent of guarding against counterfeit and illegally modified products.”
• Period of performance. For Connections II, that is 10 years: a four-year base and six one-year options. However, Haines said, task orders can exceed that by as much as 60 months under some conditions.

Small-business goals

In a change from its small-business strategy in the first Connections acquisition, GSA will include subcontractors's past performance and related experience, Brown said.

Another proposed change would alter the definition of small businesses using NAICS Code 517110, which limits the number of employees to 1,500. Connections I used NAICS Code 517919, which caps annual gross income at $25 million. The problem with that designation, Brown said, is that “one good contract can put a company over that limit.”

Some company representatives urged GSA to instead consider NAICS Code 541519, which limits companies to 150 employees. Although Haines said the agency would look into the possibility, it seems unlikely. That designation also limits gross receipts to $25 million.

Brown also issued a heads-up that the agency would be “revisiting and verifying subcontracting plan goals consistent with GSA agreements with the Small Business Administration. We might be revising that,” she said.

GSA officials would not be pinned down on the size of the slice of pie reserved for small businesses. There is no set-aside for small business under Connections II. However, officials said, of the 14 prime contractors on Connections I, five are small businesses, and there was a 42 percent goal for using such companies.

Doing what’s right

Although some companies were clearly uneasy about the potential for organizational conflicts of interest, GSA officials downplayed the likelihood that they would be a problem. “We haven’t had any trouble in the past,” Krumbholz said. If an agency suspects a conflict with a contract holder might exist, it simply won’t get a proposal from them.

Contract holders have also been sensitive even to the appearance of a conflict, Krumbholz said.

“We’ve already recused ourselves several times,” a Verizon representative said. The company hold contracts on both Networx and Connections I.

It’s a potential source of trouble that GSA is always aware of, Krumbholz said, but “we just haven’t had any experience with it [happening].”

A classic conflict of interest would involve providing support for a Fair Opportunity bid on a Networx task order when the company holds contracts on both vehicles, Brown said. For example, Networx contract holder Qwest has expressed interest in bidding on Connections II.

Should a company disagree, it can protest to the Government Accountability Office, Brown said.

Next step

“I think it’s clear that we’re still mulling over a lot of things,” Krumbholz said. GSA is “still very receptive to [industry] comments.”

Officials plan to release the final RFP in June and make awards in November, Haines said. If the agency receives many more proposals than expected, evaluations could take longer and push awards to February 2011.