Small HR firm takes $110M Commerce managed services pact

Any win of a six-year, $110 million contract is a good victory for anyone.

But the win is extra special for any company just starting to emerge from the small business category and if that award is against an incumbent with the size and scale of Accenture Federal Services.

For Golden Key Group, the win also marks a successful foray into managed services to the Commerce Department's human resources functions under the Personnel Action Request, Payroll and Benefits Services contract. It was awarded by Commerce’s Enterprise Services Program.

Reston, Virginia-based GKG is no stranger to HR work, but until this point has been providing in-house support to government HR departments.

But the firm saw the growing need for a managed services offering as Commerce and other agencies struggle to fill open positions in their HR departments.

As part of the win, GKG is building out a 20,700-square-foot call center in Maryland to provide the manage services. The company also has assembled a team that includes IBM, Northrop Grumman, Lindholm & Associates and OBAN Corp.

Building that team and getting the win is the culmination of a several-year pursuit by GKG and its CEO Gretchen McCracken.

“Gretchen has built many strong relationships with people at Commerce to understand what they needed,” said Janet Clement, GKG's executive vice president for strategy and execution.

Developing those relationships allowed GKG to gain critical knowledge around the payroll and benefits processes and needs at Commerce.

“It is really about understanding the uniqueness and the kinds of problems they were having,” Clement said.

Building that trust with Commerce also meant weathering some defeats. GKG pursued other opportunities that they didn’t win in part because of their size and risk aversion on the part of Commerce, Clement said.

But that all led up to this win because the agency was getting to know GKG and trust its leadership. There also was the strong team that they had put together. Because of the trust, Clement said size didn’t really matter anymore.

GKG’s background also has been focused on HR operations, which McCracken said is something larger companies can’t really claim.

“In this case, we have been saying for four or five years to Commerce, ‘You focus on the people first and let the technology enable that,’” she said.

Federal HR is complex and codified in laws and regulations. “You have to follow the rules and technology cannot replace the human touch,” McCracken said.

GKG has been providing HR operations support to federal agencies since 2005, two years after McCracken founded the company in her basement.

During that time, they’ve witnessed the aging workforce that agency HR departments face and how that impacts agency operations.

“When you get down to the most basic principles of federal government work, everything goes through HR,” McCracken said. That includes salary increases, marriages, transfers, new benefits, training and retirements. All events that impact operations.

“Someone has to touch the paperwork,” she said.

Now that there aren't enough people inside agencies, McCracken said the government is turning to a contractor workforce to come in and stabilize things and then find ways to improve the processes.

The company knew it had to start capturing the knowledge of the retiring workforce and figure out how to pass that knowledge along.

GKG is developing its own proprietary technology and processes that, for example, can quickly sort through applicants and find the right pool of candidates. The sifting and sorting of applications is faster and more accurate, which leads to better hiring decisions, she said.

With this new contract, GKG will be offering the support as a managed service through its new Maryland facility. The company sees this as a start and is talking to other agencies that have similar needs.

“We see [the Commerce] contract as a really good launching pad for us to grow significantly and to get more of this type of work,” McCracken said.

GKG believes it will finish out 2020 near $50 million in annual revenue. The company is projecting hitting $100 million in the next three years. That doesn’t count growth from a merger-and-acquisition strategy the company is developing, she said.

“We have a strategy coming into play where we’re going to make an acquisition over the next 18 to 24 months that will help us accelerate,” McCracken said.