But there's a billion-dollar question looming in the wake of sweeping procurement reforms: What's the new model for government integration projects, and how much will it resemble the commercial one the government wants to emulate?
For Thomas Hewitt, chairman and chief executive of market research firm Federal Sources Inc. of McLean, Va., the old model based on charging according to time and materials just doesn't cut it.
"The old model is dead; it is time for a new model," Hewitt said.
He noted the best example of a new model that is working in the commercial sector can be found by looking at the rapidly growing systems integrator, Cambridge Technology Partners of Cambridge, Mass.
The company uses a fixed price-fixed time approach that relies on hammering out clear-cut requirements with the customer before work begins and sticks to those requirements as the project continues, said Masood Chaudhry, group business manager for Cambridge's Washington office.
That approach has proven successful. Revenues have soared from $179.7 million in 1995 to $406.7 million in 1997. Net income rose from $16.5 million in 1995 to $37.7 million in 1997.
"If you look at why projects fail, it is because of a lack of [customer] input, changing requirements and unclear requirements," Chaudhry said.
That Ol' Scope Creep
Requirements changing in midstream - called "scope creep" - has long been a problem in the federal government, said William Loomis, an analyst with Legg Mason Inc. of Baltimore.
The government's traditional way of procuring information technology was a major factor to changing requirements after a project started, said Renato "Renny" DiPentima, president of the federal sector for SRA International Inc., Fairfax, Va.
"Under the old model, the government put up a lot of money and worked four, five, six, seven years with some expected outcome," he said. "That just didn't work."
Federal IT managers wanted long contracts because the procurement process was so cumbersome, said DiPentima, who knows of what he speaks. Before joining SRA in 1995, he spent 30 years at the Social Security Administration. His last position was deputy commissioner of systems.
"Senior [government] managers didn't want to go through that long process, so you would try to do a single procurement that was comprehensive enough to do the whole project rather than break it into pieces," he said.
The result was projects with no clear end point, Loomis said. "You just had continuous work going on."
With typical procurements taking two years or more, the technology sought by the government would be out of date by the time a contract started, said Carl Salzano, director of contracts for Booz-Allen & Hamilton Inc., McLean, Va. "That is why you saw a lot of changes in the past," he said.
Recent reforms not only have shortened the time it takes to award a contract but they also encourage the government and contractors to work together earlier in the process, Salzano said.
"There is a real emphasis on improving and increasing the sharing of information between the government and the contractors," he said.
The new procurement rules, many of which just took effect in October 1997, also have sparked greater interest from the government in using performance-based contracts, Salzano said.
Better-defined requirements mean clearer statements of work and a greater willingness from the contractor to bid on a fixed-price contract, he said.
"The fixed-price contract shifts the risk to the contractor, but the contractor gets more opportunity to define the solution," he said.