The One Change That’s Upending the Federal Contracting World
GSA pioneers an objective method of picking winners.
The General Services Administration is launching a new era in federal information technology acquisition this spring when it releases requests for proposals for Alliant 2 Unrestricted and Alliant 2 Small Business, the next generation of the agency’s governmentwide acquisition contracts (GWACs).
The Alliant 2 contracts will likely be the largest federal IT services contracts of the next decade as measured by volume of orders. Unrestricted has a $50 billion ceiling over 10 years, while Small Business has a $15 billion ceiling.
The Alliant 2 contracts are also the first federal IT deals that use an objective method of selecting winners. Most IT companies have never seen anything like it.
GSA pioneered the approach in 2013 on its One Acquisition Solution for Integrated Services (OASIS) contracts for professional services. All protests against OASIS failed, a validation of the objective method that GSA is now using for Alliant 2. GSA also used the method for recent human capital and building maintenance contracts.
A key innovation in the objective method is a self-scoring system. Companies can claim points for relevant experience and certifications. Does your company have ISO 9001 certification? You get 1,500 points. Did you complete a $1 million cybersecurity project recently? That’s 100 points. Have you managed a federal IT facility overseas in the last five years under a $100 million cost-plus-fixed-fee multiple-award task order? That’s a brass ring: Give yourself 10,000 points.
It’s a bit tricky, but with some elbow grease, companies can figure out their scores in advance. Once they submit their bids, GSA will validate bidders’ scores and either accept or reject claimed points.
Another innovation of GSA’s objective method is that pricing is a non-factor. GSA is telling companies up front what the range of fair and reasonable prices is. Unless an Alliant 2 bidder makes a silly mistake, no company is likely to lose on price.
GSA has rightly determined that under multiple-award contracts, pricing is an important consideration only when you get to the order level. After Alliant 2 is up and running, the prime contractors will duke it out on price as agencies submit orders. But this spring, GSA is just trying to pick the companies with the best IT services chops.
The 60 large companies with the scores closest to the maximum total of 75,600 will be selected for Alliant 2 Unrestricted. The top 80 small business scorers will win spots on Alliant 2 Small Business.
Those 140 companies will be eligible to compete for orders that agencies place through the Alliant 2 program. All other companies will have to subcontract to those primes. Companies can expect billions of dollars in orders to flow in from all over government, from the Army to Health and Human Services to Agriculture to the Defense Health Agency.
Winning a slot on Alliant 2 could absolutely make a company’s decade. Many of the fastest-growing federal IT services companies of the past five years, such as Digital Management Inc., ActioNet, and Vistronix, saw much of their growth come via Alliant Small Business. Booz Allen Hamilton and SAIC each generated more than $400 million in business on Alliant in fiscal 2015 alone.
The odds of winning in the Alliant 2 sweepstakes boil down to two numbers: the score of the 60th ranked unrestricted bidder and the 80th ranked small business bidder. Everyone at or above those scores wins. Everyone below loses.
I’m estimating the scores of all the likely bidders as new data and information comes out. My review so far suggests that only a couple hundred points may separate the companies that get a chance to compete for $65 billion in work during the next decade and those that are left out. My partner Rick Slifer of RASA Consulting has pointed out that knowing your score is important, but knowing your ranking is critical.
I expect the objective method that GSA is pioneering to catch on across government for a wide range of contracts. It’s a way to avoid the lengthy delays for multiple-award contracts that have tended to get mired in protests over subjective decisions. The OASIS RFPs were issued in July 2013, bids were due that September, awards were announced by May 2014, all protests were rejected, and the contracts were up and running by September 2014. If Alliant 2 enjoys a similar clear path from master contract selection to task orders, other agencies are likely to start adopting the objective method for their contracts as well.
Brian Friel is founder of One Nation Analytics, an independent research, analytics and consulting firm for the federal market. He can be reached at email@example.com