Growth in federal contracts called unsustainable

By Tom Shoop

July 18, 2012

Federal and industry officials questioned Wednesday whether changes are needed to rein in the growth of multiple award contracts, especially those run by individual agencies.

In the years since a series of acquisition reforms were enacted starting in the mid-1990s, multiple award contracts have proliferated. Under such arrangements, vendors are chosen to provide a set of goods or services and then compete among themselves for individual orders from federal agencies.

According to a Bloomberg Government analysis, the amount of contract dollars obligated under multiple award contracts has doubled since fiscal 2006 to more than $83 billion in 2011. In 2006, 427 such contracts existed across government. As of last year, the number had risen to 1,182. The biggest growth area is in agency-specific contracts.

With virtually all agencies under tight budget pressure and the threat of a sequester of funds looming at the beginning of 2013, panelists at an event sponsored by the Coalition for Government Procurement said continuing that trend may not be in the taxpayers’ best interest.

“We can’t afford to have a lot of duplication of [contract] vehicles out there,” said Jon Etherton, president of Etherton and Associates, who served for 14 years on the staff of the Senate Armed Services Committee.

The current situation is “almost like whack-a-mole,” said Tom Sisti, chief legal counsel at SAP. “Which vehicle are you going to use? It must be a program manager’s nightmare.”

Joanne Woytek, program manager for NASA’s Solutions for Enterprisewide Procurement contract, a massive governmentwide acquisition contract, made the case that it could meet almost any agency’s information technology needs. But the contract’s sheer scale -- about $2.5 billion in orders flow through it annually -- sometimes leads agencies to think they’re better off creating their own more targeted vehicles.

“People see what we do and because we do it all, they say, ‘If I could do it specifically, I could solve my problem,’ ” Woytek said. “They think, ‘I need to buy exactly this.’ We need to get the message out that they can do that through GWACs.”

Other agencies, she said, “are spending a lot of time and money to duplicate what we do -- and not as well.”

Individual agency officials at the event said they assess a range of options to meet their contracting needs. But in some cases, they defended the use of agency-specific vehicles.

For example, Elliot Branch, deputy assistant secretary of the Navy for acquisition and procurement, said the service is on a “journey of discovery” about what to buy and how to buy it. That includes using both GWACs and the Navy’s own vehicles, such as SeaPort-e, a platform for acquiring support services in such areas as engineering and financial management. “For the time being,” Branch said, “for most professional services, SeaPort is going to be the vehicle of choice.”

Government Executive’s Federal Contract Profiles series provides in-depth information on individual contract vehicles. See the report on the Justice Department’s Information Technology Support Services-4 contract.


By Tom Shoop

July 18, 2012

http://www.govexec.com/contracting/2012/07/growth-federal-contracts-called-unsustainable/56857/