Top failure factors for government contracts
By
Nick Wakeman
Our latest WT Insider Report explores the top reasons government contracts fail, and while we find some good news for contractors, there are plenty of areas that need improvement.
The federal landscape is littered with failed projects. Some are huge, complex projects that grab lots of headlines; others never see the light of day.
In our latest Insider Report -- Government IT Contractor Partnering: The Customer Perspective -- we decided to take on the question of why. The Insider Reports are available exclusively to WT Insider members. Click here for information on how to join.
The good news in our findings is that the technical competency of contractors was the least frequently-cited reason, with a score of 22 percent in the "Often" and "All the time" categories.
The bad news is that contractors over promising capabilities and execution was the most frequently-cited reason, with a score of 44 percent in the "Often" and "All the time" categories.
Only 16 percent said that overpromising was never or rarely a problem.
Other factors scoring high in the "Often" and "All the time" categories include:
- Agency changes requirements/scope after award: 39 percent
- Poor communication between the agency and contractor: 36 percent
- Lack of agency oversight: 36 percent
- Contractor slow to staff or understaffs the project: 36 percent
- Changes in agency leadership/commitment: 35 percent
- Contractor uses inexperienced personnel: 34 percent
- Contractor mismanagement: 32 percent
What I find interesting about these findings is how often the government executives we surveyed are pointing to themselves as the problem.
It’s heartening to see that they realize they carry some blame for failures. You might have been able to argue that they carry the majority of the blame if it weren’t for how high contractor overpromises scored.
Another bit of good news in the results is that friction between agency program management and contractors only scored 22 percent in the "Often" and "All the time" categories.
Interestingly, a lack of collaboration between primes and subs pulled 26 percent in the "Often" and "All the time" categories. That indicates to me that prime-sub relationship isn’t a huge issue for the government.
But at the same time, it is an issue because 46 percent of respondents said that a lack of collaboration was sometimes to blame for failed or struggling projects.
In fact, all of the factors that were explored scored 40 percent or higher in the "Sometimes" category, which tells me that contractors need to pay attention to all of the factors as they manage projects. Any of them can cause a derailment.
The failure factors, as I’ll call them, get more support from a later question in the study when we asked “What is the single most important thing a contractor can do to partner more effectively with your agency?”
The top thing government customers want is better communications and transparency, which was cited 29 percent of the time. Honesty and integrity was second at 17 percent.
Improvements in those areas would go a long way as far as addressing concerns about overpromising and poor communication as cited in the failure factors.
Government customers also are looking for contractors to deliver what they say they will (15 percent), as well as better collaboration (11 percent) and flexibility (8 percent).
Interestingly, cost and cost consciousness was only cited by 3 percent of respondents as the single most important thing a contractor should do to be a better partner.
To be honest, I’m not sure what to do with that particularly because the budget is cited so often as one of the biggest challenges in the market today.
Perhaps it means that the best way to meet the budget challenge is to focus more on value than on price.
Maybe that’s the key to differentiating yourself from competitors.
Up next, I’ll explore more of what government customers think of the effectiveness of the prime-subcontractor relationship, and perhaps some areas where they’d like to see improvement.
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