Why stopgap bills only make the year-end spending rush worse

Fiscal year 2021 is now in the rear view mirror and putting the brinkmanship of our elected officials aside for a moment, it ended on quite a bang.

The annual fiscal year-end spending spree didn’t disappoint, especially when you look at the last three days of contract actions announced by the Defense Department.

  • Sept. 28: 57 actions
  • Sept. 29: 66 actions
  • Sept. 30: 77 actions

Not all are new contract awards. A majority are modifications, extensions or options being exercised. We are seeing more sole source awards as well.

It’s understandable to see such activity. After all, agencies don’t want to have fiscal 2021 money left over and risk losing it. So they use it or lose it.

Everyone accepts this as a fact of life and just how business is done in the government market.

But is it a smart way doing business? No. Everyone knows the answer is "no."

That spending rush is exacerbated by the continuing resolution.

If Congress enacts a fiscal 2022 budget in December -- a huge “if" -- then a full quarter will already be done. That’s nearly three months of no new starts, no new initiatives, no new programs.

If continuing resolutions slip into January, the pressure only mounts. Instead of 12 months to carry out their budgets, agencies will have nine or less.

Some variation of this happens nearly every year, or it seems too.

Again, this is no way to run a government.

Other democratic nations don’t do it this way. There is no threat of a government shutdown. The government keeps working while the politicians go through their tantrums.

But this headlong rush is also no surprise as the fiscal year comes to close. In many ways, agencies have no choice. The system, and that’s my euphemism for Congress, is rigged against them. That’s a shame.

Posted on Oct 01, 2021 at 2:00 PM0 comments


Key considerations as you face the government shutdown

As we rush headlong into a government shutdown, I’m feeling a mixture of déjà vu and an impending sense of doom.

We’ve been here before and we’ve watch the brinkmanship of elected leaders play out again and again. But something does feel a little different this time as well. Maybe it is the debt ceiling and the risk of economic collapse. The long term risk there is significant.

But experts like David Berteau, president of the Professional Services Council, say that the White House and congressional leaders are focused on the short term and we are unlikely to see a big fix come out anytime soon.

The bottom line is that almost all of this is out of your control, so what should government contractors be doing? Plenty.

We ran a column yesterday by attorney James Fontana that explores many of these actions. Berteau and PSC held a briefing yesterday as well reviewing proactive steps contractors should take as well as offering a historical perspective on government shutdowns.

COMMUNICATIONS

That is a key element of many of the actions being recommended.

Top of the list is talking to your contracting officers. As Berteau explained, the contracting officer is the ultimate gatekeeper on stopping and restarting contracts as well as determining what work can and can’t happen during a shutdown.

You need to be talking to your contracting officers now and throughout the shutdown, Berteau said.

“In addition to the contracting officers you have to talk to your customers, your program people who set the requirements, approve the invoices, etc.,” he said.

A close second is communicating with employees. Companies face a real dilemma, do you continue to pay employees and consume any cash on hand you have, or do you furlough employees and risk losing them?

The economy is different today that the last government shutdown in the winter of 2018-19. That was a partial shutdown so work continued at the Defense Department, Veterans Affairs and the Department of Health and Human Services. That’s a large part of the federal market, so companies had some wiggle room.

This time it will be a full-shutdown and because of the tight job market, furloughed employees should have plenty of opportunities to find employment elsewhere.

Some employees may be deemed essential at the start of a shutdown and will continue to work. Others may be deemed non-essential but will get called back in if the shutdown lingers on. Workers who were essential in the beginning can be deemed non-essential later.

ANALYZE, ANALYZE, ANALYZE

The data and insights you gain from talking to contracting officers, customers and employees all feed into your analysis of the current situation. But it is important to realize that your analysis and conclusions will change because the situation will change with the length of the shutdown.

What you do in the first few days will likely not be the same things you do in the second or third week, and beyond.

There are key questions you need to be asking your customer, according to Bertau:

  • Has your contracting officer reviewed and implemented the agency’s shutdown guidance?
  • Who provides access to government facilities, personnel, or information?
  • Who can accept deliveries of goods and services? This is a critical because if no one accepts your work, you can’t move onto the next task.
  • How do you contact the contracting officer during the shutdown?
  • What is your remaining period of performance? If your period of performance runs out during a shutdown, will there be a contracting officer or other government official who can grant an extension?

PREPARE FOR THE UNKNOWN

First on the list of unknowns is how long the shutdown will last. You have no control over that, of course.

A major thing to consider is that a shutdown isn’t one-size fits all. There is no real consistency from agency to agency and often within agencies on how they will handle the shutdown.

So just because Agency X says one thing, Agency Y is just as likely to do it differently.

And inside an agency and office, you’ll likely face inconsistencies. Berteau shared the story of one set of contractor employees being sent home, while the employees from another company were deemed essential. This happened despite the fact they worked side-by-side on the same project.

Another unknown to prepare for is the recovery. As Berteau said, it’s simple to shut down and stop work, but it is more complex to reopen.

A lot depends on the contracting officers and how quickly they sign return to work orders, but there also are ripple effects, for example, on solicitations being issued and new awards being made.

Berteau said that for every day of a shutdown there are 3 to 5 days in subsequent delays. The last shutdown was 35 days so we are talking months and months before the government caught up.

There is still time of course for Congress to act but the best we can hope for is short-term continuing resolution that pushes the deadline out a few weeks.

A shutdown almost feels inevitable, so it’s best to prepare and expect the worst.

Posted on Sep 29, 2021 at 9:45 AM0 comments


Incumbency no help for Booz Allen in fight for DTRA contract

The competition between Booz Allen Hamilton and Noblis for a $263 million Defense Threat Reduction Agency contract was neck and neck with both companies getting strong technical and past performance scores.

Their prices also were only $3 million apart, with Booz Allen bidding $266.5 million compared to Noblis’ $263.3 million bid.

You would think that as the incumbent that Booz Allen would have a bit of an edge to continue providing DTRA with support for planning, programming, budgeting and execution related to DTRA’s cooperative threat reduction program. The company also provided experts in areas such as weapons of mass destruction, international agreements, acquisitions, training and administrative support.

So it isn’t surprising that Booz Allen filed a protest when DTRA awarded the contract to Noblis.

One of the major points that Booz Allen argued is that it should have been given higher scores for past performance because of the expertise and experience it has gained as the incumbent. Both companies were give scores of Substantial Confidence.

But DTRA’s selection decision authority believed that while Booz Allen’s experience was a strength and would have an immediate impact, it would diminish over time.

GAO ruled that there was no basis for Booz Allen to argue that the selection decision authority was required to give them a high score.

Booz Allen also argued that DTRA didn’t follow the criteria described in the solicitation and didn’t enter into discussions with the bidders.

GAO rejected this as well.

One area where Noblis outscored Booz Allen was its staff approach. Noblis got the nod over Booz Allen because of the details it provided about how it would hire and retain people. Booz Allen’s proposal apparently lacked the details DTRA was looking for. Booz Allen also didn’t provide details on how over time it would shift more work to subcontractors.

Noblis scored an Outstanding in this area, while Booz Allen received a Good score.

Booz Allen leaned hard on its experience with the customer but in the end that didn’t persuade DTRA nor did it persuade GAO.

Posted on Sep 29, 2021 at 1:00 PM0 comments


IBM wins $138.4M contract with Army shared services center

IBM beat out seven other competitors to win a $138.4 million contract to support an Army shared services center.

The Army’s Acquisition, Logistics and Technology Enterprise Systems and Services or ALTESS is a shared services center provides data security and other services to Army enterprise customers. It has delivers most of its support services through a series of data centers.

Users of ALTESS include the Army, Joint Forces, and the Defense Department. The organization claims millions of users around the world.

IBM will be providing IT services to ALTESS customers. The organization is based in Radford, Virginia.

Eight companies, including IBM, bid on the contract, which runs through September 2026.

Posted on Sep 28, 2021 at 7:15 PM0 comments


Lumen asked to deliver network services to postal service

Lumen has been picked by the U.S. Postal Service to modernize the network that services more than 32,000 post offices and mail processing facilities.

The work is being contracted as a task order under the Telecommunications Integrated Postal Network – Enhancement vehicle. TIPN-E has an $800 million ceiling shared across multiple vendors.

Lumen officials estimated the value of this task order at under$100 million.

The company will provide the postal service with secure broadband, wireless access, software-defined networking, and managed network services. The services will help the postal service improve how locations connect, collaborate and interact with 900-some IT applications, the company said.

“The U.S. Postal Service has an essential mission to provide the nation with reliable, affordable and universal mail service, and they chose Lumen to deliver secure, best-in-class network services to thousands of locations,” said Zain Ahmed, senior vice president of Lumen public sector.

Lumen will provide solutions that will optimize its network availability, performance and cost efficiency as well as provide real-time network monitoring and analytics.

Posted on Sep 28, 2021 at 2:33 PM0 comments


Nine tapped for Navy range work

Nine companies have won spots on a $93 million Navy contract for research and related services to improve tactical training on Navy ranges.

The companies will compete for task orders to provide research and development, engineering, integration, test, cybersecurity, upgrade, and sustainment services at Navy facilities at China Lake, California.

The goal is improve lethality and survivability of Navy aircrews.

The winners are:

  • Alion Science and Technology Corp. (now owned by Huntington Ingalls)
  • Amentum Services Inc.
  • Booz Allen Hamilton
  • Dynetics Inc.
  • Jacobs Technology Inc.
  • Saalex Solutions
  • Science Applications International Corp.
  • Scientific Research Corp.
  • Zenetex

The contract runs through September 2026.

Among the tasks will be work around range-related software products and simulation software.

The Navy received nine bids for the contract and made nine awards.

Posted on Sep 28, 2021 at 6:52 PM0 comments


Sierra Nevada takes contract to integrate SOCOM systems

Sierra Nevada Corp. has won a $183 million, sole-source contract to provide engineering and integration support for a U.S. Special Operations Command effort to integrate systems aboard their aircraft.

The goal is a systems of systems where the different systems can communicate and provide more synchronized feedback to users.

In 2018, SOCOM and its Sofwerx organization began working together on the concept of unified Integrated Tactical Mission Systems. One goal was looking at the systems installed on the MC/AC-130 aircraft.

SOCOM was challenged by increasing and more complex mission requirements. They also knew they had to keep air crews at current levels or even reduce the size of the crews. With Sofwerx, the command began looking at capability gaps, interfaces and end-state requirements.

They set a goal that the Integrated Tactical Mission System would in bring together at least five systems tied to mission planning and survivability of the aircraft.

The sole-source contract with Sierra Nevada was awarded following Federal Acquisition Regulation 6.302.1.

Posted on Sep 27, 2021 at 9:57 AM0 comments


Solo bidder wins $500M anti-drone contract

Building technologies and systems to counter the prevalence of drones that threaten troops on the battlefield or just fly into areas were they aren’t wanted is a growing business opportunity for many companies.

That’s why it surprised me that only one company bid on a nearly $500 million contract to research and prototype systems to counter small unmanned aircraft.

PAR Government System Corp. of Rome, New York, was the sole bidder and winner of a $490.4 million Air Force contract. The company will conduct research, design and prototype a system. The contract also will cover operational evaluation, integration, transition and support.

While PAR was the only bidder, an Air Force industry day for the project drew attendees from multiple large business including BAE Systems, CACI International, Dynetics, KBRwyle, Leidos and Northrop Grumman, according to solicitation documents posted by Deltek.

The contract was let by the Air Force Research Lab.

In reviewing the solicitation, the Air Force made it clear that it was looking for a single prime to award the contract to. And there doesn’t appear to be anything in the solicitation that seems designed to scare off other bidders.

There could be a 100 reasons not to bid for the companies that stayed on the sideline. But either way, it’s a great win for PAR.

Posted on Sep 27, 2021 at 11:15 AM0 comments


Navy re-awards $151M small biz IT contract

The Navy has made new awards for a $151 million IT support contract that was derailed earlier this year by protests.

The small-business contract is for IT lifecycle support for the Naval Facilities Engineering Systems Command. Winning this time around are:

  • Chitra Productions LLC
  • SV Synergies LLC
  • OSCTech LLC
  • AttainX Inc.
  • Stellar Innovations and Solutions Inc.

The Navy originally made awards in December 2020 to AttainX, Golden IT-JV, OM Group, Stellar Innovations and Yakshna Solutions.

But three companies – OSCTech, Soliel LLC and DT Professional Services – lodged protests with the Government Accountability Office. Those protests led the Navy to pull back the original awards in March and take corrective action.

The corrective action was either to take a second look at the evaluations or to amend the solicitation and get revised proposals.

Whichever path they took the results are very different this time around with only two of the original winners, AttainX and Stellar, getting awards a second time. Golden IT-JV, OM Group, and Yakshna Solutions were left out.

And only one of the protestors, OSTech, won a seat.

It’s unusual to see companies on a multiple award contract lose a spot they won because of a protest. Generally, you see an agency add companies but leave the original winners in place.

This makes me speculate that we’ll see some more protests of this contract.

The contract is for a range of services that will support core facilities management, construction management and installation management systems. Work includes systems development, cybersecurity support, business systems operation and IT operations management. Other tasks will cover cloud operations including migration, systems development, secure infrastructure and analysis, and management services.

The contract runs through March 2027. The Navy said it received 28 bids.

Posted on Sep 24, 2021 at 11:53 AM0 comments


DARPA unmanned ship work moves forward

DARPA is making progress on a program it calls No Manning Required Ship, making a second award to Serco Inc. to continue developing a design for the ship.

While the Federal Procurement Data System pegs the value of the contract at $7.7 million for Phase 1A and the recently awarded Phase 1B portion of the contract, this is precisely the kind of design work Serco wanted to pursue when it acquired Alion’s naval architecture business in 2019.

NOMARS concept vessel

A rendering of the NOMARS unmanned surface vessel concept; courtesy Serco.

Other companies also are in the mix include Autonomous Surface Vehicles LLC, a division of L3Harris; Gibbs & Cox, a naval architecture firm acquired by Leidos; Barnstorm Research Corp.; and TDI Technologies.

It’s unclear which of the companies has made it to the second phase besides Serco.

Known as NOMARS X-Ship, the DARPA program is exploring novel surface vessel designs using what Serco called a “clean sheet refresh.” The NOMARS vessel will have no onboard sailors and will need to operate for long periods of time.

The vessel will eventually replace larger and more expensive ships, Serco said.

One goal is to lower the Navy’s cost per mission hour with a reduced platform size and the ability to extend the reach of larger, manned vessels.

“Able to observe and contest large swaths of the mission space, USVs could enable virtually embarked warfare commanders to be everywhere at once,” Serco wrote. “A fleet comprising these smaller, yet capable autonomous platforms are anticipated to yield an increase in deployed capabilities with a reduction in mission cost, operational constraints, and risk to human life.”

To pursue this work, Serco is drawing on the Alion acquisition as well as Alion’s 2005 acquisition of John J. McMullen and Associates.

Posted on Sep 24, 2021 at 12:02 PM0 comments


CACI's tech transformation driven by customer focus

CACI International will mark its 60th year in business in 2022 and while the company is much different today than when it was founded by Herb Karr and Harry Markowitz in 1962, current CEO John Mengucci can draw a direct line from today to the past and also into the future.

It all starts with customer focus and understanding the emerging needs of the customer, Mengucci said.

“You have to make sure you are in the middle of where the next threat is coming from and that you’ve invested enough years ahead of time so you are right in the sweet spot,” he said. “That’s what all of my predecessors have done since Herb Karr founded the business almost 60 years ago.”

John Mengucci

John Mengucci, CEO, CACI International

CACI has gone through a transformation over the last decade with positive results. The company hit $6 billion in its fiscal 2021 revenue and expects to reach $6.2 billion to $6.4 billion in 2022.

Whether it has been through its mergers and acquisition activities or through a revamped business development process, the company’s strategic moves reinforce where it sees the customer headed.

 “We always strive to understand where the market’s going and make the necessary changes,” Mengucci said.

He joined CACI as chief operating officer in 2012 and became CEO in 2019. Under his watch as both COO and then CEO, CACI business has shifted from predominantly professional services to a closer to a 50-50 mix of services and technology.

A decade ago, CACI’s business was about 80 percent services (or expertise, as Mengucci describes it) and 20 percent technology. Then along came sequestration and the rise of lowest price, technically acceptable contracts and other policies that put tremendous pressure on pricing and margins.

“It really moved a portion of the services business to a commodity buy landscape,” he said. That was not where CACI saw its future.

“We embarked on a purposeful strategy to add technology to our offerings,” Mengucci said.

This was reflected in CACI’s acquisitions such as the $820 million deal it made in 2013 for Six3 Systems and a $750 million deal in 2019 for LGS Innovations. The company added capabilities around software development, artificial intelligence, photonics, signal intelligence, unmanned aerial systems, and enterprise IT.

The capabilities from its acquisitions also fueled a shift in CACI’s business development approach. Instead of bidding on a large number of contracts, CACI became more selective. “We want to bid less and win more,” he said.

This means getting in front of the customer, learning their pain points and then matching that with new technologies and solutions.

“We want to show them the art of the possible and shape a more favorable RFP for us and so the government gets something that they actually need,” Mengucci said.

Two of the company’s bigger wins reflect the success of this approach. One was the Army’s $880 million IT Enterprise Management Systems Solution contract and the $1.8 billion BEAGLE contract to modernize back office systems for Customs and Border Protection.

Mengucci cited both as examples of how CACI engaged with the customer years ahead of the solicitations. The predecessor contracts relied hundreds of people paid for through hourly rates and CACI’s early work helped shift the customer to try a different approach.

Two years ahead of time CACI began talking to the customers and showing what was possible with a new approach.

“What if you provide us the apps, we do it in an agile manner and we provide half the people and you pay less. I may make more but you shouldn’t worry about that because the productivity is going to go through the roof,” Mengucci said in describing the pitch.

Both of those contracts rely on CACI’s Agile Solutions Factory, where the company can use agile software development practices on a large scale. It is a strong selling point for customers.

“We can bring them to a physical place where you’re developing software so they can see how quickly you can create code,” he said. “It is nearly defect-free and it’s done with very few people.”

Visitors to the software factory and CACI’s Center for Research, Application Development, Learning and Engagement, or CRADLE, aren’t coming for product demos. CACI pulls together customers, technical experts, commercial providers and other stakeholders.

“The customer actually gets to touch, look at, feel [the solution] and talk to the experts,” he said. “It’s a space where we can do conceptual designs, we can look at potential requirements. We can listen a little and build a little.”

The hoped for result is an RFP that incorporates requirements that play to CACI’s strengths. CACI also gains more insights into customer’s pain points and challenges.

“I talk about investing ahead of the customer’s need, but it is tough to invest if you don’t have a good understanding of the customer’s needs,” Mengucci said.

One thing Mengucci wants to avoid is something he has seen throughout his 40-year career and that’s what he calls “Museums of IRAD,” where companies have spent billions of dollars on research and development of technologies that work great but the customer doesn’t want.

That is why he puts a focus on talking to the customer and having people as close to the boots on the ground as possible. Those employees see the needs and can bring that knowledge back to CACI.

CACI’s push toward more technology capabilities also has had an impact on the people it hires and increased the professional development opportunities once inside the company.

The competition for talent is intense and “we’ve had to come up with creative ways to attract talent and retain them,” he said. “We want people who want to come here and create a lifetime career here.”

CACI has made it easier for people to move around the company to the point where one in four open positions are filled by people internally. The company has also enhanced its referral program with one in three new hires coming through a current employee.

The company’s internship program has grown significantly as well with 300 people participating this year.

While CACI shift toward technology and solutions is significant and represents half its business and is the faster growing portion of its business, Mengucci is quick to point out that that the professional services or expertise portion of the business is still critical. In fact, the two work hand-in-hand.

“I love selling talent to the government as much as I enjoy delivering technology,” Mengucci said. “The folks on the expertise side are with the customer every day and they are performing the customer’s mission.”

The ability to get their feedback on new solutions and insights on the customer is invaluable and better than waiting for the solicitation to come out, especially when you are the incumbent.

“While I have that customer right now in my hands, I should be introducing them to technological solutions,” he said. “They’re not going to fire me because my rate is a little bit higher because I’ve taken a lot of risks out and added capabilities. That’s the beauty of adding that tech piece to the company.”

Posted on Sep 23, 2021 at 1:46 PM0 comments