Saturday, March 4, 2017

Some Thoughts on GWACs: An Amtower Off-White Paper (take 2)

(Updated with a few corrections) 

Much has been written about GWACs over the past few years, both collectively and as individual contracts. In the fall of 2016, Bloomberg Government (BGov) released a study stating GWACs hit a record $10 billion in 2016. 

I agree it was a record year, but my tally shows about $15 billion. I got my data from the GSA GWAC dashboard, a call to the SEWP office and from having worked with NITAAC most of FY 2016. GSAs combined GWACs are nearly $6.2 billion, NITAACs 3 GWACs almost $5 billion, and SEWP came in at about $4 billion.

Regardless of the actual total, GWAC the dollars and growth are real. Everett Dirkson would be impressed, because now we're talking real money.

So overall a good year across the board for the eight GWACs. But before we proceed, here’s…


A Brief History of GWACs

As things go in GovCon, GWACs are a relatively new contracting method, the first being SEWP, a pilot GWAC awarded in November 1992, but the awards were delayed due to the Presidential transition until Feb 1993. This was a primarily single award contract, with one category having more than one awardee.

It was awarded as the pilot GWAC (a test case) under GSA delegation of procurement authority; Clinger-Cohen created the official Executive Agent designation for GWACs under OMB.

The second GWAC came in 1996, the HHS/NIH contract, ECS, was the first multiple-award GWAC that got significant traction for small businesses. ECS was awarded to three large companies, seven small companies and seven 8(a)s, and according the Federal Computer Week from a 1996 article, the smalls did pretty well.

SEWP I offered a category for multiple awards, but it was not until SEWP II that the MAC version was more fully implemented.

In the late 1990s there were several agencies trying to launch GWAC experiments, including Commerce, Transportation and Interior. They soon found that the successful management of a GWAC was not simple. Commerce punted COMMITS to GSA and to the best of my recollection, the others just folded up and went away.

So in the early 2000s, three agencies emerged from the quagmire with viable vehicles: NASA, NIH and GSA.

In the summer of 2006 I interviewed Max Peterson about selling to the government. In a four hour CD interview one of many stand-out quotes was as VP of Sales for CWD-G, his team had the “IT product trifecta: SEWP, ECS and GSA Schedule 70.” This, he said, covered all the agency bases.

Fast forward to today 25 years later, and there are still only three agencies authorized by OMB to award GWACS: GSA, HHS/NIH (NITAAC), and NASA. GSA contracts are Alliant II, Alliant II Small Business, 8(a) STARS II, and VETS. NITAAC contracts are CIO-SP3, CIO-SP3 Small business, and CIO-CS (formerly ECS). NASAs contract is SEWP V.

Eight GWACs and billions of bucks.

Back to the Present

Why the seemingly "sudden" growth in the popularity of GWACs? There are several factors.

First, and perhaps most obvious, many of the companies that own prime spots on the GWACs are out there actively pushing these vehicles to their customer and prospect base. The GWACs usually offer lower fees for agencies than the GSA Schedules, are very easy to use, have vetted providers, and have a broad range of products and services. The companies that are most successful on GWACs - even small companies - are aggressive in promoting those GWACs. Just look at the growth of Red River, a top SEWP perfomer over the past several years. Red River is also one of several contractor to hold both SEWP V and CIO-CS.

World Wide Technology, a SEWP contractor for 3 iterations and now on CIO-CS, has leveraged these vehicles very well over the years.

Which leads to factor two: OEMs and service providers love GWACs. OEMs without access to GWACs or other IDIQs have limited access to Federal buyers. When Oracle announced it would no longer make products available on any GSA Schedule, do you think it hurt their sales?

Probably not, as their partners in the GovCon arena own spots on multiple GWACs and other IDIQs. One major partner, DLT Solutions, is on SEWP V, CIO-CS and has an Army BPA for Oracle. Oracle's departure from GSA Schedules will hurt Schedule 70, not Oracle.

I advise hardware manufacturers to talk to both NITAAC and SEWP directly, then to look for key contract holders, preferably companies that have spots on both contracts. Adding new OEMs on SEWP and CIO-CS takes hours, not weeks or months. I often assist OEMs in their search for right channel partners.

Another factor contributing to the growth is the number of sub-contractors for these vehicles is growing. Most of the prime contract holders welcome the new subs if it is a good fit for them and the contract. Joanne Woytek of SEWP, Casey Kelley of Alliant and Rob Coen, then with NITAAC but now at FEDSIM all discussed this aspect of their respective contracts when they were guests on my radio show on Federal News Radio. GWACs and IDIQs are frequent topics on my show.

If you don't have a prime spot on one of the GWACs, look for a partner that does.

Yet another factor is that each of the GWAC program managers will spend time with any agency contract shop explaining how and why to use their contracts, as well as the lower fees and the ease of use. SEWP and NITAAC are quite active in this.

Alliant’s Casey Kelley and his team have taken spending time with agencies to a new level, getting agreements with some agencies (after mutual vetting for a good fit) to use Alliant as a preferred contract.

We are also seeing more contract specific training events, a key to educating both buyers and sellers. I have moderated GWAC panels at conferences like 930Gov  and the Government Procurement Conference because of the growing popularity of GWACs. Alliant, NITAAC and SEWP all held events in early 2017.

Then there is the FITARA halo effect. NITAAC has e-GOS, a dashboard that allows the agency (and the contractor) to see and download their entire transaction history: date, price paid, vendor, product/service, SIN, delivery and much more. This helps the buying agency when it does FITARA reporting. SEWP is launching a similar dashboard in 2017.





As FITARA will probably be with us for a while, the dashboards will make reporting almost seamless, making the contracts more attractive to CIOs, who are being held more accountable for IT purchases.

Where Does the GWAC Growth Come From?

Although there are other factors at play, when you tally the pluses of GWACs against the mis-adventures of strategic sourcing (FSSI), TDR and other GSA Schedule changes, GWACs come out looking like manna from heaven for both buyers and sellers.

Indefinite Delivery, Indefinite Quantity (IDIQs) are contracts that have no money assigned specifically to the contract, but that are open to audiences defined by the type of contract. GWACs (Government-wide Acquisition Contract), for example, are IDIQ IT contracts open to all federal agencies, but like GSA Schedules, are simply a hunting license. 





The companies that win the coveted spots on each of the GWACs are pre-vetted through the award process, technically making them more attractive to all federal buyers. The bidding and award processes are vigorous, weeding out the contractors that are not ready for prime-time.

The dramatic growth for GWACs over recent years has caught the attention of many, making these coveted vehicles even more popular for both the contract holder and the buying agencies.

The question is how does the growth occur?

There is no question that the NITAAC GWACs growth during the Rob Coen years (2009-2016, and being PM from 2012-2016) was nothing short of spectacular. NITAAC is now under the direction of Acting PM Bridget Gauer with basically the same team, so growth should continue. The three NITAAC GWACs (CIO-SP3, CIO-SP3 Small Business and CIO-CS) combined for nearly $5 billion in 2016.

SEWP, under the guidance of Joanne Woytek for the last 18 years, has always been a great performer and sought after vehicle for contractors. Joanne has the most experience running a GWAC and the SEWP program is deservedly the best known GWAC in the GovCon arena. SEWP had its best year ever in 2016 with nearly $4 billion.

Casey Kelley and his Alliant team have another growing GWAC that has introduced has introduced a unique process for awarding contract wins. Alliant and the other GSA GWACs (Alliant II, Alliant II Small Business, 8aSTARS II, VETS2) combined for almost $6 billion in 2016.

Each of the GWAC Program Managers works hard for their contracts, but does that lead to the growth?



The answer is yes, with a caveat. The caveat is that like the GSA Schedule contracts, the GWACs and other multiple-award IDIQs have super-performers, adequate performers, and not-so-great performers. Companies with well-managed contracts help the GWACs grow.

The difference between the top performers and other contract holders comes down to how the program is managed on the contractor side. This includes several factors, among them:

-      -  The relationship between the contractor and the GWAC contract office, the teams on each side, is critical to growth. The government team can show no preference for any contractor, but each GWAC PM and their team is open to working with any contractor to help them be successful. SEWP’s Woytek personally visits each contract holder to ensure they understand the value of the vehicle and how to leverage it. This has been a trademark of SEWP for at least the last two iterations of the contract. Not all contractors take full advantage of this.

     -  Each GWAC has agencies that prefer their respective vehicles. While technically any agency can buy off any of these contracts, some agencies prefer CIO-CS over SEWP V and vice versa, some agencies have signed agreements with a GWAC to declare them a preferred vehicle, and so on. The contract holders that understand which agencies prefer which contracts, and grow deeper relationships with those agencies, tend to win more business through the contract. Not brain surgery, but also not a method employed by all.

-      -  The contractors willing to push the bounds of the contract into new agencies also find allies in the contract Program Managers. The PMs will help educate an agency on the value of their contract without endorsing any particular contractor. When a contractor takes this approach, it could be for several reasons, including their current relationships with that agency, or perhaps they uncovered a specific opportunity where a certain GWAC would be best used. In any case, this is a longer term tactic not employed by chronic under-performers.

     -  The approach by the contract holders on the sales, business development and marketing part of the equation differ widely. In part this is a resource issue (smaller companies have fewer resources to draw on) and in part it is because some companies with multiple contracts market all the contracts together, not each separately. Other companies still suffer under the misguided notion that winning a contract makes the phone ring. Not so. Aligning your marketing, BD and sales and creating specific programs to target specific opportunities increases sales. A separate Off-White Paper on this topic is forthcoming.

     -  The ability for contractors to respond quickly and accurately to the RFQs that come from the GWAC contract office is the most obvious part of the puzzle. However as we all know, responding to RFPs and RFQs is part art, part science, part reading between the lines and part knowing the customer and his/her preferences on both the responses and the bidders knowledge of the agency and how that plays out in the response by the contractor.

While this is not a complete inventory of factors for why some companies perform better than others, it does touch on some significant points.

My point is winning a spot on a great contract is just the beginning of the process.
Growing the contract business is the job of the GWAC PM. Growing your share of that business is up to you.

That combination makes the GWAC more attractive to government buyers.


Why some GWAC contractors are better at monetizing contracts




Here are a few final thoughts on why some GWAC contractors do better than others.

First, contractors with good relationships to OEMs often have an easier time with vendor registrations. Which leads to…

Contractors that know the target agency better than others are more likely to know when something is coming to fruition. One of my contractor friends has a DHS rep second to none. Consequently, this rep surpasses his goals and drives significant business through various contracts, but does so because of a deep knowledge of the agency and knowing exactly when to get his contracting office to register a deal.

Third, knowing when to take your executives to client meetings is critical in building a relationship with the customer. I’ve seen too many smaller companies where this simply does not occur.

GWACs are only as good as the GWAC program office. SEWP has been a leader in this realm, but NITAAC and Alliant have closed the gap.  The Alliant team is the best of the GSA GWACs. (1)

In the end, it’s relationships: contractor of GWAC program office, contractor to agency, contractor to OEM.



Back to the Future


Given the uncertainty about the budget (perpetual continuing resolution and civilian agency spending) and the direction the new administration might take on both program and procurement issues, I think the use of established GWACs and IDIQs like OASIS will rise dramatically over the next few years.

Not that I have an opinion.


***

(1): there was nothing about VETS and 8(a) STARS in this because neither seems to have great traction, and I don’t hear much about either contract from media or industry. If you have details on either, drop me a line.

* This article is a combination of two recent blog posts and one newsletter article. I merged them into one piece to organize my own thoughts, then share them. This version was first published in my newsletter, The Amtower Report.

If you need help maximizing the dollar value of your GWAC, email me at markamtower@gmail.com 

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