Years ago, federal agencies jumped on the indefinite delivery/indefinite quantity (IDIQ) contract bandwagon and never got off. The preference for agency-specific IDIQ contracts and government-wide acquisition contracts continues as agencies seek ways to centralize and reduce contract spending. This is especially true for IT, where more than half of spending flows through such contracting programs.
However, this is not just an IT story. The prevalence, size and complexity of task order contracts make them market-shaping now and in the future. Here are suggestions for how contractors can navigate this market:
Jockey for strategic positioning. Not only are agencies consolidating contracts and centralizing spending under preferred IDIQs, they are using them to address emerging technology needs including cloud computing and cybersecurity, as well as policy issues such as strategic sourcing and small-business use. Without positions on agencies’ preferred contracts, contractors could lose customer access for years. And, because the stakes are that high, protesting has become the status quo.
Don’t rely on incumbency. Variety is the spice of life, and in the current environment some agencies are looking for “new blood” to help drive cost savings and efficiencies. Contractors beware: Re-competes usher in pricing negotiations and new terms that can significantly impact an incumbent’s ability to compete.
Be ready for the long haul. Although data shows that the average request-to-award timeline hasn’t changed much over the past several years, most business developers and contracting officers will agree that pre-request timelines are growing longer. Agencies are spending more time on the front end on market research, requirements and acquisition strategy development. Add the impact of protests into the mix and the time investment could be several years.
Perform well – then measure and share. To drive better source selection decisions, the Office of Federal Procurement Policy now requires contracting officers to expand their past performance research. These officials will be digging deeper into recent contracts, but also commercial business databases, articles, General Accounting Office and Inspector General reports, and references from public sector and commercial customers as well as teaming partners. Evaluate these sources ahead of time, and be diligent about advertising successes.
Engage with your agency program managers. The relationships between agency program managers and contract officers can be tenuous. Contract officers heavily influence the structure of task order contracts but are not incentivized by or accountable for how their decisions impact programs. Help your program managers shape and justify requirements, and encourage them to engage with their contract officers early to minimize the impact of potential conflicts on acquisition timelines.
Big spending areas are easy targets for cost savings, so contractors can expect more scrutiny of the number, structure, cost, performance and management of task order contracts. The linchpin for contractors will be in developing solid strategies at the contract and task order level to position them for the future.
Deniece Peterson is director of federal industry analysis for Herndon-based Deltek, which conducts analysis on the government contracting market and can be found at www.deltek.com.
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