2010 Department of Defense Budget

As a matter of public policy, the Secretary of Defense publishes the annual request for funding. Figure 1.0 shown below, shows the request for 2010 compiled by service branch.

Figure 1.0: Fiscal Year 2010 Defense Budget

For additional decomposition of the defense budget contact McGuirk Consulting at: jjmcguirk@cox.net.

Section 843 of the National Defense Authorization Act

When congressional legislation was passed last May, 2008 supporting Section 843 of the National Defense Authorization Act, it was done so to ensure that both government and industry benefited from enhanced competition. This certainly will require a significant period of time to properly assess the cost benefits, but along the way it makes for some interesting discussion. In principal, the basic components of this provision are listed below.

The text listed below was originally authored by Marko W. Kipa, of Sheppard Mullin, LLP.  Marko can be reached at 202-772-5302 or mkipa@sheppardmullin.com.  The entire article was originally posted in Sheppard Mullin’s Government Contracts Blog, which can be found at governmentcontractslawblog.com. For further information concerning Sheppard Mullin’s Government Contracts Practice, contact either of the Practice Group Leaders, Bryan Daly in Los Angeles at (213) 617-5466 or Anne Perry in Washington, D.C. at (202) 218-6875.

• Protests Authorized In Connection With TOs and DOs Valued Over $10 Million

The interim rules allow for the filing of a protest in connection with the award of a Multiple Award contract task or delivery order valued in excess of $10 million.  The interim rules do not circumscribe the universe of grounds for protest and, thus, protesters would not only be able to challenge agency action based on the enhanced competition requirements (discussed below), but also on the vast variety of protest grounds commonly associated with FAR Part 15 procurements.  GAO has been granted exclusive jurisdiction to entertain these protests.  Congress was not convinced apparently that these changes would cure the ailments afflicting IDIQ contracts or that they had struck the proper balance between competing and divergent interests in fashioning its grant of bid protest jurisdiction because the new law contains a sunset provision that extinguishes a contractor’s ability to file protests in connection with task or delivery orders valued at over $10 million in three years (i.e., May 27, 2011).  Congress adopted the three year test period to allow time to consider the implementation and impact of the new law.  See House Conference Report 110-477.

• Enhanced Competition Requirements For TOs and DOs Valued in Excess of $5 Million

The interim rules also impose specific procedures that an agency must implement to satisfy its obligation to provide contractors under a Multiple Award contract with a fair opportunity to compete.  Specifically, with respect to task and delivery orders valued at over $5 million, an agency must provide (a) notice to contract holders of the proposed task or delivery order that includes a clear statement of requirements; (b) a reasonable proposal response period; (c) the significant evaluation factors and subfactors as well as their relative importance; (d) where award is made on a best value basis, a written statement documenting the basis for award; and (e) an opportunity for a post-award debriefing.

• Limitations On Single Award Task Or Delivery Order Contracts

The interim rules prohibit single award task or delivery order contracts valued at over $100 million (including options) unless the head of the agency authorizes the award.  The agency head may only do so upon a determination in writing that: (a) the expected task or delivery orders are so integrally related that only a single contractor can perform the work; (b) the contract provides only for firm-fixed price task or delivery orders; (c) only one source is qualified and capable of performing the work at a reasonable price; or (d) exceptional circumstances justify the public’s interest in awarding the contract to a single source.  In the event the agency head relies on the “public interest” exception, Congress must be notified within 30 days.  As evident, this prohibition against single award contracts valued in excess of $100 million is designed to encourage the use of Multiple Award contracts and to foster further competition at the task and delivery order level.

The complete article written by Marko that discusses these provisions in greater detail is listed on the Government Contracts Blog, hosted by Sheppard Mullin. Click here to read the entire entry.

Summary discussion: In the current economic recession our country is faced with, coupled with a mounting national debt, there is little argument that could dispel the inherent benefit of making multiple awards, particularly as it relates to the limitations on single award task or delivery order contracts over $100M. This is generally always going to be truthful if the services provided are “soft services”, and not directly impacting the war-fighter in theatre. Specifically the benefits of making these multiple awards are far reaching, and have a derived impact on:

1. The government client(s):This goes without saying that should the government evaluation find that there is more than one qualified offeror, then the client receives the “best of breed” that is derived from choosing from each of the prime contractors and their respective teammates. In short no one company, large or small, has a monopoly on good people or best practices. In fact, it’s quite the opposite. There a hundreds of great companies that make up the defense sector, all of which want to help their clients, and all of which provide great services and extremely talented personnel. 
2. The taxpayer-In a time of a significant recession, multiple government programs being introduced to stimulate the economy, and a mounting national debt, the taxpayer is the one who truly should benefit from section 843. This legislation when adhered to, promotes competitive pricing between contract awardees, and incentivizes those companies who continually provide ways of doing business faster, better, and cheaper. If only one contract is awarded, this results in the  competitive incentive being eliminated, and taxpayer savings abandoned when in fact we are in a time in our country’s history when we need it most of all.
3. Industry-As I stated in number 1 above, industry stands to gain by having the government make multiple awards as well. Because of the depth of resources and capabilities spread throughout those companies who make up the defense sector, should the government take an earnest stance on implementation of section 843, it would open up competition amongst these very same defense firms, and increase percentage distribution across multiple firms, while also creating a more comprehensive set of solutions for the government to choose from.

In the interest of helping our military clients, supporting growth within industry, and creating a value proposition for the taxpayer, let’s hope the government makes good use of section 843 of the National Defense Authorization Act.

Agencies Are Beefing Up Their Acquisition Workforce

Trying to increase the numbers and quality within the federal acquisition community, many agencies are putting a full court press on recruiting and hiring.

Federal Computer Week has an excellent article describing this in their recent edition. Click here to read the whole article.

Changes Impacting Government Contracting

The following link discusses some of the President’s high level priorities for reforming government contracting.

Although much of what the President says is yet to be implemented, it will have an impact on both the way the acquisition community thinks and acts.

Capture Management Piece Parts

Ensure each aspect of capture is successfully performed.

It’s been a while since first discussing capture management over two years ago, so I thought it would be worth taking some time to explain the individual components. After all, we spend a significant amount of B&P dollars chasing targets we want to win. This particular article can hopefully ensure your pursuit is framed properly and decisions are reached in an informed manner along the way.

There are several different components to capture as shown in the figure. Their importance and functions are described below:

1. Marketing. Let me start this discussion by saying that this aspect of your pursuit is the single greatest determinant in your ability to win. It’s essential that your marketing strategy ensure the call plan is (a) inclusive of the technical and contracting key personnel. (b) The messaging is well thought out and embeds aspects of your win strategy to “get some preliminary feedback”. This does not have to be overt, but should be articulated in such a fashion as to measure the prospective client’s views. (c) Contains mid-level and senior executive participants. These do not have to be part of the same visit, but should be targeted at their government contemporaries.

2. Competitive Intelligence. Simply put, to know your competition’s strengths and weaknesses is to know how to craft your own win strategy. Without understanding what you need to exploit, your unable to distinguish yourself from the other offeror’s. Moreover, the primary competitor(s) is ultimately what drives the creation of your themes and sub-themes when you reach the proposal phase.

3. Technical Win Strategy.The technical solution you place in your proposal is a derivative of the overall win strategy. For example, if your bid requires the delivery of networking technology, and your primary competitors still brand themselves as an IT software solutions company, you have the basis for exploiting their brand in your call plan, and creating immediate separation within the messaging for your call plan. In short, never attack a competitor, particularly an incumbent in the areas they are strong in. That’s a prescription for losing. Always however exploit their weaknesses as a part of your overall technical win strategy.

4. Price-to-Win Analysis.This is more visible now to many defense contractors for good reason. The US economy is still recovering from a significant recession. The defense budget is being reduced for some agencies, and the need to provide a value proposition to the Government is predicated on your cost to deliver that solution-or services, whichever they may be. Clearly you should distinguish  between the criticality of PTW on single awards or multiple awards. In short however, you need to go back to the competitive intelligence topic (#2), and discern who your primary competitors will be. Then your ability to create the right PTW can take into consideration their potential win strategy, and what kind of cost risks they would be willing to take to win the program. This is inclusive of direct labor costs, indirect labor costs, fees, pass-through costs, etc.

5. Strategic Partnering.Once you have created and tailored your technical and pricing win strategy, then you have the ability to select the right partners who support it. Let me suggest that you avoid picking your partners first and then creating your win strategy. That creates an awkward situation of your having to back into a win strategy rather than define what wins upfront, THEN identifying those corporations whose brand, skills, and pricing fits your strategy. There are a lot of very good companies in the defense and federal civilian sectors. You’ll need both large business and small businesses to address the current needs of most technical clients and also their contracting organization. Select your partners carefully and you’ll have some long term benefit with mutually beneficial results.

6. Acquisition Analysis.This is certainly the basis for your ability to pursue a target or not. However the reason you have some latitude here is because  face-to-face communications between industry and government is encouraged by the FAR. These are opportunities for your firm to make good suggestions on how to save money, create greater efficiencies, increase productivity, etc. In short the creation of the Request for Proposal (RFP) is a by product of what has been there on previous RFP’s, what requires updating based on technical changes or policy changes, and finally what kinds of suggestions they intend to incorporate based on industry white papers or responses to draft RFP sections. Take full advantage of these opportunities to communicate your messages.

7. Proposal.I’ve saved this for last because in the overall process of winning government contracts, your proposal becomes the final correspondence that should, ideally, reflect every other aspect of what has been discussed in the first 6 topics. I’ve often said that proposals can’t win contracts but they sure can lose them. But to be fair to those APMP professionals, many of whom are dear friends of mine, good companies can’t place a value on just how critically important it is to have a true professional who leads your proposal effort. It is those men and women whose keen understanding of the “other” capture components, enable then to best present within the technical proposal, your winning story-all of which should have been previously cultivated within each capture component leading up to this phase.

Business Development Poll

This month I’ve included a poll to get a feel for how the business development organizations are perceived when it comes to being properly resourced, how effective they are at positioning to win contracts, and where they may have strengths/deficiencies in critical skill areas.

Although there is no right or wrong answer in any of these, it is important that the results become published as they serve as a barometer for having the right process and people in-place to successfuly grow the business.

Enjoy Winning. You’ve Earned It.

Yes it’s true that it takes a long time to win a large program. In fact it sometimes takes equally as long a time to win a smaller program. In the process, your team is constantly looking for a competitive edge. Searching for that one chink in the armour that allows you to exploit the competitor’s weakness. The marketing advantage, technical advantage, manager whom they desire, or price they can’t ignore.

It takes a lot of work to win programs. It’s never easy. It’s not simply resultant from one good visit on the call plan or one good graphic for the Executive Summary. It’s rarely due to how effective the review teams were or the how well thought out the capture plan was. Rather it’s the effect that all of this planning and execution have had on your ability to be chosen the winner. More importantly, it’s something your whole team has earned. From the marketing manager or sales manager to the graphics artists, proposal manager and editor. From the red team review leader to the capture manager to the senior executive who approved the B&P budget. Lest we forget the volume leaders, principal authors, and proposal coordinators. Did I mention the contract manager, program manager, and pricing analyst? What about the Human resource manager, recruiter, and black hat leader.

In short, everyone contributes to winning contracts. It’s taken all of these professionals a long time to reach the Holy Grail. Enjoy it while it lasts. You’ve earned it!

For more information please contact me at:

www.mcguirkconsulting.com

Picking The Right Target

So your behind in your growth goals and need to find the right opportunity to pursue? Your getting pressured to identify and qualify the next target so the pipeline seems more realistic? Here are some simple tips to ensure you select the right one.

First make sure that no matter how many bosses you may have clamoring for that “make-a-difference” program, the fact is there are just as many competitors looking at that target as your company is. So let’s explore some fundamentals:

1. They don’t call it prospecting for nothing! Exploring what programs fit within the framework of your corporate capabilities requires a significant aspect of market research. If you have an organization in your company dedicated to this then you should engage them often. If you don’t then you’ll be spending a lot of time reviewing the commodity databases that publish government contracts. In either case, this is an essential part of identifying the targets.
2. Identify those programs that are far enough out to enable your company to pre-position properly. In short, don’t expect to win a $50M or $100M+ program in the next 3 months. It simply is not going to happen. Line them up a minimum of one year away. The bigger the target, the longer lead time you’ll need to position.
3. Be pragmatic about your chances up front. If you place it in the pipeline, just remember that in and of itself has absolutely nothing to do with winning.
4. Call plan, call plan, call plan. Nobody wins contracts without visiting the technical customer(s) and the contracting officer’s. Nobody! Selecting the right target means your visits to the government representatives provide room for optimism. If they look you in the eye and tell you they really like the work their incumbent is doing, then (a) speak to the incumbent about joining their team, or (b) walk away from it and save your B&P money.
5. Once the call plan has been executed, then your in a position to determine if you should be priming or looking to sub to another prime. Or most importantly, if your company should pass on the target because the odds of unseating a strong incumbent (client’s view-not yours) are too difficult.

Now that the target is qualified and you’ve gained some degree of assurance that the competition is genuine, then by all means pursue, pursue, pursue. Just remember that winning requires a very strong desire and focus on the part of the marketing manager, capture manager, proposal manager, and also the senior leadership. Without everyone equally as committed to winning, your challenge becomes that much greater.

Best of luck in choosing your targets, and remember to give yourself enough time to position to win.

For more information on pipeline and targets, contact me at:

www.mcguirkconsulting.com

Capture Management Takes Plenty of Time

It’s been quite a while since my last blog entry. Hence the title of this post.

As is typical of most new business pursuits, the positioning phase generally takes the majority of time within the capture cycle. Think of it in terms of writing a good manuscript, and then having it published later. To the point your likely to spend the better part of the year doing the following:

• Establishing the overall win strategy
• Creating a well defined call plan
• Defining a very clear message to be delivered in the call plan
• Identifying the best people within the organization, or within your strategic partners to implement the call plan
• Adjusting your messaging based on the customer(s) responses
• Assessing the best advertising medium
• Modifying your capture plan along the way
• Fine tuning your team along the way
• Evolving the win strategy
• Determining key people, in particular your Program Manager

For the most part these are aspects of your capture effort that take significant time to mature. When coupled with the level of competition in today’s federal markets, it is extremely wise to begin the capture process as early as possible.

As a general rule, a minimum of 12 months is needed for programs up to $50 million, and 18 months is needed for programs over $100 million. Although the volume of contracts is geared more toward large IDIQ multiple award programs, you still should be identifying the targets in your pipeline early enough to effectively implement a successful capture strategy.

Give yourself the proper time to capture , and you’ll see your  win percentage improve dramatically.

Every Target Can Be Won!

So you have a pipeline that contains large targets held by excellent companies? Somehow, somewhere, someone managed to sneak these in as a means to make the pipeline more robust? Well in truth that’s not only perfectly acceptable but also should be strongly encouraged. Because in fact, everyone can be beat!

There are so many different sets of circumstances that make indivdual targets appear more favorable than the next. For those programs that are categorized as take-a-ways, or those belonging to another contractor, clearly some of the reasons used most often to justify them being targets are:

• The client is unhappy
• They have poor CPARs
• The incumbent has become complacent
• They have rate creep
• The Program Manager is not well liked
• etc.

In reality, even if all of those statements are false, they can still be beaten. What about offering the client a better value proposition? Suppose you had technical competencies that the incumbent did not, or you had a partner they truly enjoy working with. What about recruiting a Program manager whose better qualified than the current one, or providing the Government a best value alternative? The fact is all of those items are viable.

In closing let’s acknowledge that there are fewer new programs being introduced to the community, outside of those that are classified, or in the intelligence community. Therefore it is prudent to analyze all of your competitors programs, and to make some good decisions on which ones you would like to pursue. Remember however that making a corporate commitment early in the process is essential to winning.

For more information contact me at:

http://www.McguirkConsulting.com