All Signs Point to Contract Traffic Jams

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From the Editor's Desk Trish Williams

All Signs Point to Contract Traffic Jams

With year 2000 work aplenty, the promise of beaucoup bucks flowing from the feds and state and local governments into outsourcing in the coming years, and big-ticket desktop awards about to be uncorked by key agencies, it might seem like time for systems integrators to break out the champagne.

But many contractors don't appear to be dizzy with joy. That's because the array of contract vehicles now available to government agencies has companies scrambling for the right to win a piece of government work, only to compete for future task orders where all the winning contractors have a license to sell nearly all the same products and services.

The good news is that task orders are generally turned around far more quickly. For example, the General Service Administration's Federal Systems Integration and Management (FedSIM) contract is averaging a turnaround of six to eight weeks, company officials say.

Cost is another plus for that contract. The GSA is charging an hourly rate rather than a percentage of the task order value.

The bad news is that many, many more contractors are vying for work under the contracts, and they typically must field a huge team of subcontractors. The National Institutes of Health's Chief Information Officer Solutions and Partners contract went to 20 primes, and the Department of Transportation's Information Technology Omnibus Procurement contract was awarded to 17 primes.

What's more, the landscape is dotted by indefinite delivery-indefinite quality contract vehicles with potential values that would choke the U.S. federal budget. In many cases, the price tags for these contract vehicles don't pass the proverbial laugh test.

So what's a savvy contractor to do? Many executives say they are angling to get as much of the government work they win shifted to the GSA schedule as quickly as possible. Why? So that they don't have to recompete and spend a pile of money for the added feet on the street that are routinely needed to win a recompete.

Meanwhile, government contractors' strategic planners continue their frantic search for more and better partners, try to guess the outcome of political budget deliberations, pick the right vehicles and pursue the right technologies.

One thing is clear: people now leaving the government in droves for the private sector and others due to retire in the next five to 10 years means that the government will outsource everything from the desktop to operations ... and that is no small chunk of change.


Copyright 1998 Post-Newsweek Business Information, Inc. All rights reserved

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