Procurement pain, frustration and constipation ahead

On the heels of the Air Force’s decision to back away from its second attempt to make NetCents 2 Product awards came news that the Navy had again delayed the awarding of the Next Generation Enterprise Network, the $4.5 billion replacement of the Navy-Marine Corps Intranet.

The Air Force is asking for more information on compliance with the Trade Agreements Act, and the Navy says it needs to have more discussions with the two teams bidding on the contract. One team is led by incumbent Hewlett-Packard Co., and the second is led by Computer Sciences Corp. and Harris Corp.

While the reasons may be different – the Air Force is dysfunctional, and the Navy is conservative – the results are the same; more delays for large, important contracts that companies are spending millions of dollars on to bid and win.

Of course, delays are commonplace in today’s market. I hear the term “moved to the right” pretty much on a daily basis as I talk to executives around the market.

There is a great sense of frustration. Everyone understands about cuts and reductions, but for a long time there also seems to have been an inability to make a decision.

One person described it to me as “procurement constipation.”

I’m not sure what is going to loosen things up either because, not only are the decisions delayed, but then there are also the inevitable protests.

While I hear some executives complain that competitors are planning to protest from the start of the procurement process, I also see debacles such as NetCents, where 14 companies filed protests during the Air Force’s second attempt to make awards.

That’s not a couple companies trying to game the system; that’s a problem on the government side of the system, and the companies are right to protest.

I’m not sure where all this leaves us. Will the market settle into a routine of delays that becomes the new normal? Will things break lose and we’ll have a sudden rush of awards?

My guess is that the current state will remain for at least another year. The budget troubles and sequestration will last well into 2014, and perhaps beyond. It just doesn’t look like there are enough members of Congress willing to compromise.

Following 2013 is the midterm election year of 2014, which makes any long term solution even less likely. Perhaps the results of 2014 will break the gridlock.

In the meantime, I’m not sure how you calculate the delays into your pipeline and backlog formulas.

We are four months from the close of fiscal 2013, and the only thing I can think is that it is going to be a long, hot, frustrating summer.