The McLean, Va.-based company's answer was to create a virtual corporation to monitor the performance of its ITOP subcontractors, said Mike Swain, Unisys' ITOP program manager.
And it is quite a handful to monitor.
After winning a spot on ITOP with a 10-member team, Unisys added another 74 subcontractors, and it might add more as the seven-year, $1.1 billion contract progresses, Swain said.
The structure of the virtual corporation is a melding of tried and true management techniques, he said.
The original,10-member team, which includes Seattle-based Boeing and Oracle Corp., Redwood Shores, Calif., act as the board of directors and receive monthly evaluations of performance. The evaluations are conducted by both the customer and the company performing the work, Swain said.
A further check is that company's self-evaluation, which is shared with the customer who then can offer more feedback, he said.
Despite the monitoring, Unisys does not try to change the way a company conducts its business as long as the level of performance is high, Swain said.
"The companies have evolved a culture for doing work. We don't interfere with that culture," he said. "If everything is going well, we stay in the background."
But if performance is below expectations, Unisys will meet with the subcontractor to work out a plan to address the problem. In extreme cases, Unisys will take over management of a task order or even cut off funding to the subcontractor, he said. With ITOP, Unisys has structured the payment plan so that subcontractors receive monies every month. "We have them give us their time cards every month, and we will pay them for the labor," he said. "They don't have to go through the invoicing process, which can take more than 60 days. Instead they get a check almost immediately."
The primary rule Unisys set for winning task orders is fairly simple - first come, first served, Swain said.
Like most of the other ITOP prime contractors, Unisys has a World Wide Web page where requests for proposals are posted. The first subcontractor to register for the project will take the lead on trying to win the task, he said.
"They become like a prime contractor," Swain said. The subcontractor can keep the entire task for itself or pull in others on the ITOP team to help.
More companies are adopting similar structures to manage large contracts such as ITOP, which places a heavy emphasis on performance and not just price, for winning task orders, he said.
"I think this is going to be the only [way] to do business in the future," Swain said.
- Nick Wakeman