Finding Success at FTS
Finding Success at FTS
"Multiple award, IDIQ contracts are the greatest mode of competition I have seen."
Even with successful megacontracts such as the $25 billion Millennia and the FTS 2001 long-distance services deals in place, the General Services Administration's Federal Technology Service is exploring new ways to offer products and services to government agencies.
Revenue has shot from $2.6 billion in 1997 to $3.4 billion in 1998 at the GSA branch under Commissioner Dennis Fischer, who predicts $4.2 billion for 1999. Expanded services made possible by FTS 2001 and the local phone service contracts, known as Metropolitan Area Acquisitions, offer fertile growth areas. Fischer also foresees growth opportunities stemming from offerings in information security, enterprise resource planning and call centers.
He discussed what is driving the federal market for IT products and services in a recent interview in Dallas with Washington Technology Staff Writer Nick Wakeman.
WT: What is the idea behind the Millennia Light contract, and why is it an important contract for GSA?
Fischer: There is a group of midtier companies that have not won the large procurements like Millennia and ANSWER, but have a lot of unique capabilities in targeted areas. One of the things we are trying to do with Millennia Light is create another vehicle that will be more of a forum for them.
We should have a draft request for proposals out on the street by the end of the month. Initially, it will have four areas of concentration. [Information technology assessment, high-end technology services, mission support and legacy system migration, and system development. The contract is expected to have a value of $1 billion over 5 years and will have multiple winners.]
WT:: The proliferation of large, multiple award, indefinite delivery, indefinite quantity contracts has sparked concerns about the use of directed task orders and diminished competition. What has FTS done to foster competition?
Fischer: Some congressional critics say multiple award contracts are bad from a competitive standpoint, but I say they are better. The multiple award, IDIQ contracts are the greatest mode of competition I have seen. You get two levels of competition: You compete to get on the contract, and then you compete to win a specific piece of work.
We encourage a strong competition at the outset, and we try not to award to everybody. Not everyone does that. Also, we preach competition. Our managers look at it and monitor it. We are constantly mindful of the need to do that.
I tell our folks: Look, we have to thrill the customer, but if we don't have a competitive situation, then just walk away from it.
WT: What will be the impact of the $5 billion FTS 2001 contracts won by Sprint and MCI WorldCom for long-distance services, and the first set of the Metropolitan Area Acquisition contracts worth $680 million and won by AT&T for local phone service?
Fischer: Cost structures are going to be radically different. By October, we will be paying 4 cents a minute [for long-distance service] instead of 30 cents a minute. In New York, we were paying $30 a month [for local phone service]; the new price is $4 month.
The big payoff is that you will be able to do electronic government, which is more efficient for the citizen. These contracts are going to be the great enablers.
We have nine more cities to award MAA contracts in, so we [will] keep going. I think we are going to see much more robust competition.
WT: Although the year 2000 computer problem is still on everybody's mind, what is the next big thing, and how are you preparing FTS for it?
Fischer: The next big area we are going to focus on is information assurance and security. Our ACES effort will use private-sector companies to provide digital certificates and signatures. [The Access Certificates for Electronic Services contract, potentially worth $100 million over four years, is expected to be awarded by October.]
We also need to build better firewalls, keep hackers out and assure that once a transmission is sent, it gets there and it is solid. Our Program Safeguard will cover a lot of that. We are going to use the GSA schedule, because we felt we needed to get these solutions out very quickly to help people with critical infrastructure protection and information assurance. If we had gone through the whole development and multiple award procurement, it would have taken us several months.
Any company with security services on the schedule can compete for task orders. We think it is going to be very successful. We have a couple task orders in final competition right now.
WT: The share-in-savings concept, where a contractor is paid out of the money an agency saves by putting in new systems, is gaining attention. What role do you see for it?
Fischer: Share-in-savings is not for every circumstance. But it is one of those concepts where if you get two or three of them done, and people see that it can work, then it will be a bandwagon that will start rolling along.
But you must have a project where you can clearly define an operation and the amount of resources going into the operation. You have to have a before and after to measure. If you exceed my expectations, then you make more money. If you don't, then you don't make as much. And if you fail, I pay nothing. The traditional contract, of course, goes quite different. I always pay.
WT: How do you address concerns that small businesses will be shut out of share-in-savings projects?
Fischer: My sense is that it is not something small businesses will get into directly. But I would hope that there would be a lot of teaming and partnering.
We want to try to get small business in. And when we can't get them in directly, we push the subcontracting and teaming very hard, and we'll do that in shared savings.
WT: What other initiatives are coming out of FTS?
Fischer: We have identified three areas of new business: distance learning, call centers and enterprise resource planning. One of the ways we can add value as well as grow our business is to do a better job at what we do now, but also to say to people that we have new products.
We have been doing some business planning and, initially, we probably won't award a new set of contract vehicles. We'll use existing contracts and the schedule.
For example, for ERP we will go to the schedule. All those firms are there already, so we will just bring them all together and compete them. We'll have people that know what these packages can do, and they'll be able to help agencies assess what they can expect, that is, helping them in the technical and contractual selection of the best package, and help them administer the contract.