Transcript: To Bid or Not to Bid

 

John Andre (JA): Hello. Thank you for joining today's Acquisition Seminar hosted by the Federal Acquisition Institute. Today's seminar, entitled "To Bid or Not To Bid: An Industry Perspective," presents a view of the Federal procurement process from a different angle. Typically we've brought you speakers from Federal agencies. Now, we're going to hear from the other part of the procurement equation -- industry. "Why?", you might ask. The Federal government is in need of cutting edge tools, products, and services to meet its responsibilities on behalf of the American taxpayer. It can only secure these tools, products, and services if it adequately engages with potential industry partners. This engagement should be in a constant state of cultivation. At the very least it should occur through a formal solicitation with a clear and succinct statement of needs. What the Federal government may be in need of most is an understanding of industry perspectives in procurements -- One -- What influences industry's decisions to bid on government requirements or get on government-wide schedules? Two -- What challenges does industry face when evaluating government's requests for proposal? And three -- What can government do to entice industry to participate in the government marketplace?

 

Before we begin, let me remind you that we will hold a live Question and Answer session at the end of today's presentation. If you have a question about anything you hear from our presenters, we encourage you to submit it at any time using the survey link to the right of the video screen. We will collect and review your questions during the presentation, take a short break, and then return to answer as many as we can. So let's join Millisa Gary, Procurement Ombudsman from the U.S. General Services Administration, as we explore industry's view of Federal government procurements with three distinguished industry professionals -- Kathryn Klaus, Senior Program Manager at Hewlett Packard Enterprise Services, Antwanye Ford, President & CEO of Enlightened Incorporated, and Stuart Gittelman, Vice President for Custom Training Solutions and Program Manager for OPM IDIQ Contracts, PDRI, a CEB company. Let's go to them now. 

 

Millisa Gary (MG): I am Millisa Gary, the GSA Procurement Ombudsman, and I am delighted to be the moderator for today's session. I am joined by Antwanye Ford, President and Co-founder of Enlightened, Inc., a small HUBZone minority-owned business, Stuart Gittelman, Vice President for PDRI, a midsize business, and Kathryn Klaus, program manager with the public sector enterprise services division of Hewlett-Packard, a large business. Our panelists represent a cross-section of industries and business sizes, and I look forward to a lively and enlightened discussion as we walk through what it is like to walk in their shoes. I would like to start by asking each panelist to give us a brief overview of who they are, what their role is, and how their company relates to the government marketplace. Antwanye, I would like to start with you. 

 

Antwayne Ford (AF): Thank you very much. My name is Antwanye Ford, President and Co-founder of Enlightened Incorporated. We are a small business, HUBZone certified specializing in cyber security as well as big data analytics and some management consulting. We are a former protégé of HP, a newly certified DoD mentor as a small business. The Federal sector is an important business for Enlightened. About 67% of our business is federal, about 33% state and local. We do hold several schedules, as well as primes on several opportunities, so to bid or not to bid is a critical subject for us as a small business and we are looking forward to this discussion. 

 

MG: Thank you. Stuart?

 

Stuart Gittelman (SG): Thank you. My name is Stuart Gittelman. I am a Vice President with PDRI, which is a CEB company. We are a midsized human capital consulting firm with roughly 90% of our business being Federal government and 10% commercial. Of our Federal government work, about 65% of that work is civilian Federal and about 35% is Department of Defense. We do have multiple contract types. We hold IDIQ contracts, we have GSA schedules as well as BPA's with roughly 80% of our work going through schedules and 20% of our work going direct from an agency, through direct contract and procurement. 

 

MG: Thank you, Stuart. Kathryn?

 

Kathryn Klaus (KK): I am Kitty Klaus. I am a senior program manager at HP Enterprise Services, a subsidiary of Hewlett-Packard. While Hewlett-Packard is very large in the commercial space, our Federal business size is about $4 billion. My GSA schedule programs account for about $200 million per year, making us for the past 15 years or so consistently in the top 20 GSA schedule holders. We do have a lot of experience not only with GSA schedules but with other IDIQ contracts in the Federal space, and we have a robust program to handle task orders internally. I spend a fair amount of my time reviewing those task orders and the RFPs coming forward, and I look forward to the opportunity to have the discussion today. 

 

MG: Great, thank you. Thank you, all. So what we are going to do today is walk through the contractor perspective, the bid decision, communication pitfalls, and we are going to leave you with some key takeaways. So I know that you all represent different industries and your companies are different sizes, but what are some of the commonalities that you share in terms of internal processes and industry goals? Kitty? 

 

KK: Let's start a little bit with those industry goals. When we sat down together, we found out that we do have a lot in common for what we looked at. What is important to us overall is the reputation of our companies. That is critical to all of us. Not only do we want to be the contractor of choice for our customers, but we also want to be the employer of choice because it is important to be able to attract good people to get the business. It is also important among us to grow, to grow our business. We want to expand our business. We also want to expand our offerings. We are all constantly looking at what the market is doing in and trying to keep up with that and increase our capabilities, and Antwanye, you had a particular area of growth that was a little bit different from a large business. 

 

AF: Yeah, one of the important things different about small business is the ability to show your government partner that you have the capacity to do so. There is never a doubt if an HP can do a job. The government assumes that they can. But from a small business perspective, they are going to look at -- can we attract the right people? Do we have the capacity and ability? Do we have the wherewithal and financial capacity to do it? From that perspective, that is unique from a small business perspective because we come to the situation with a little doubt at times from a Federal government -- they wonder if we can do it. So that is something we have to keep in mind all the time. 

 

KK: So besides our reputation and growth of our business, it is important that we have solid balance sheets and positive cash flows with profit to keep our businesses going. Profit I know to some people can be an ugly word, but it is a business word, and that is how we grow our business, that is how we grow our infrastructure. It is how our people are paid and we can attract top talent. Another important aspect to all of us here in the Federal space is contributing to the mission outcome. We are not in it just for the business and the profit. There is certainly a feeling among us that we are here to support the Federal government. We are here to understand your mission and to bring innovation to government can be very important to us as well. Stuart, if you have anything to add on that, or Antwanye. 

 

AF: I think you covered it well. 

 

MG: Thank you, Kitty. That was great. Fantastic. Guys, now that we have sort of "broken the ice", let's get into the real skinny of the session. When we talk about the bid decision and those kinds of things that go into that decision, one of the things that you all seem to have in common is the notion of "qualify the deal". Kitty, what do you mean by that? When we issue a solicitation, it is obvious we are asking for the commercial sector to help us, so are you saying that you are making sure that you qualify to bid on the requirement? What exactly does that mean? 

 

KK: To qualify the deal, to get into this a little bit, we have to make sure it is the right fit, it is the right fit for our company, something that we could be successful at, and overall it aligns with what we can do because we don't want to fail. That does not help those goals we talked about, reputation and growth. So we want to make sure that we are in for good business, and for many large businesses, we work on very large opportunities, and that qualifying the deal can actually start well in advance of an RFP being released. So we have the sales force out there talking to their customers, trying to understand their mission, what needs to be done, where there is a need for innovation, and trying to find that right fit and where we marry up. We want to make sure we are ahead of the procurement. A lot of times if a big one hits us and we have not heard about it, we are not prepared, so it is probably not the right fit. So we want to be ahead of it. We want to make sure that we establish a relationship with the client or do we already have an established relationship? We look especially on large deals of the likelihood of procurement. We say "well, it is already out there, it is an RFP", but in advance of it, we want to make sure, are the "stars aligned"? Politically, financially, and do they have an acquisition strategy? If you guys see anything different on that -- 

 

AF: What is interesting in terms of being ahead of the deal, that is even important as a small business. I know I've brought deals to HP, and HP usually is saying, "Wait a minute, Antwayne, we did not hear about this deal, why are you telling us so late?". So from a small business partnering with a large business, we know that is important. It actually changed our culture when we became a protégé of HP because we started looking at deals significantly early, and even within our culture, we go through a bid/no-bid process and talk about it because if it comes out and we have not heard about it, there is no way we're going to bid. 

 

SG: We have a conversation about this. If it comes out and we are just finding out, we put our win probability at 10%. That is not where we are going to put our resources and allocate our capabilities and financial limitations. We have to bid on things we have a good win probability for, and we usually look at a 180-day window. We want to be 180 days ahead of that procurement release. 

 

MG: I have heard from companies that if you wait for it to appear in FedBizOps, you are already late. 

 

AF: Too late. 

 

KK: And I heard an old acronym for the CBD -- contract has been done. [LAUGHTER] I just want to throw that out there. 

 

MG: Yes, great.

 

KK: Other things we are looking at early on before the deal comes out- we want to make sure the agency's mission is aligned with our corporate capabilities. We want to make sure, see if there is any integration with any programs, maybe there are other programs we are doing for that agency or another agency that could be translated over. We are looking for open communications with industry. That is a sign of a contracting shop or program office that wants to invite industry and to have discussions. It is always a big positive. 

 

MG: Yes. Yes. 

 

KK: Before we get to the hot topic of RFI's, anything else on that? 

 

SG: I would just say that, when somebody says there is fair and open competition, saying it and having actions that back it up -- what is more meaningful, what you say or what you do? Usually what you do is more meaningful than what you say. 

 

MG: Yeah, I think it is very good that you are out there and you are engaging with government early on in the process. That is one of the things that, you know, through the Mythbusters campaign, we are focusing our efforts on engaging with industry early, so that is good to see that you guys are doing the same. 

 

KK: And speaking of engaging early, we are seeing more RFI's. We noticed using the GSA E-buy statistics that there has been a large uptick in RFI's at GSA, predominately among the schedules, not as much on the GWACS. And it seems to have coincided with the Small Business Jobs Act that enacted that you could do set asides on GSA schedules, so we are seeing that uptick, but we would like to communicate out there that some understanding about what those RFI's mean from a business perspective. 

 

MG: Right. 

 

KK: Some of them do require bid and proposal funds, which is a limit -- we will talk a little bit more in the resources section, but bid and proposal funds are limited at a company, so when we work with RFI's, it does take away from that pot of money. We see some RFI's that require an incredible depth of response. Some want a 70-page response, some want a rough order of magnitude pricing on there- we have to approvals for that. So we have to begin to evaluate responding to those RFI's because it takes away from opportunity money for other things. We have some discussion back and forth -- is the agency looking for free engineering advice? Or is it a small business search? Are they looking to qualify two or more small businesses? As a large business, we have to think about that response. We want to know, "Is is a qualifying event? If we do not respond to the RFI, are we shut out from receiving an RFP?". 

 

SG: Yeah. 

 

KK: So, those things are helpful to know. 

 

MG: Very good questions. 

 

SG: As a company that really values and stresses or emphasizes our intellectual property, we look at an RFI as a place were we may not want to disclose a unique or novel approach that we take to solve a specific problem, so we may be less likely to respond to that RFI for that reason, in addition to the reasons Kitty mentioned. 

 

AF: I think one thing that is critical- I know when I talk to small business officers and other procurement specialists, they are saying "Antwayne, why isn't the small business community responding to RFI's?". Two critical points, you're right, you are almost getting free consulting, and you are spending a lot of time and money on it. But the third one that's most important, a lot of the response is not being provided back to industry. So you turn in an RFI, and you don't often hear about what happens, so if I have one piece of advice to industry or to the government side, it would be -- let us know what happened. Did you not get enough responses from us? Was it not qualified? Because I think that would help the community be more effective with responding. 

 

MG: So an RFI is not necessarily from your perspective a precursor to a requirement that is going to come out? 

 

KK: We respond to a lot of RFI's that we have never heard again about.

 

SG: Anything from them. 

 

KK: They just disappear. Maybe it was truly a market research effort and it just did not receive the funding. Maybe it went to a small business and we cannot see that because it was posted on a separate site, so a lot of times we just do not know what happened at the end of it. A recommendation that I have seen used on market research is social media. GSA has their Interact website. We have seen the Alliant GWAC group and the Oasis MAC used very efficiently to get information, input from contractors about what things to look for in the RFP, certifications that could be in there, scope, so lots of different questions out there. I think the Alliant team recently put out a question on cyber security requirements, and they received a lot of input from industry. It is a lot easier for us to use those type of logs. So that is another way, instead of a formal RFI that contracting offices might use. The other thing we would like to say is when an RFI goes out, it is different from an RFP. Communication should not shut down when the RFI goes out, but we are finding contracting activities that give it the same gravitas and say I have put out an RFI, now I'm not going to speak to you, so that should not be the point where the door is shut. 

 

SG: The RFI did not begin the procurement phase. 

 

AF: I agree. 

 

KK: Right, so there is still market research, there are- GSA sometimes will right away invite you in for one-on-one discussions. We encourage that. That is a good opportunity to exchange ideas. So there are other things you can do. Industry days would be the other. 

 

MG: Yes. 

 

KK: If you have an industry day, please do not read the RFP to us. 

 

MG: That is not helpful. [LAUGHTER] 

 

AF: Not at all. 

 

KK: It is not helpful. It does happen, but also understand that on industry days that we may not ask the questions you are really looking for because we don't want to tip off that competitor. 

 

MG: Yes. Yeah, as a contracting officer, I certainly remember that. Stuart kind of mentioned it a few minutes ago when you were talking about the RFI. You were reluctant about giving away proprietary information. 

 

SG: We have done it and had it come back to us in the RFP as a requirement. We know we have not -- well, we know it may not be targeted directly for us, but they have incorporated some information we have provided. So we are reluctant to do it. Once bitten, twice shy. 

 

MG: Yes, I understand that . 

 

KK: Let's look at some other qualifying the deal. This is after the RFP shows up, and we have some red flags that might be in the RFP. When RFP's come in on our GSA programs, I read them and I look at it with more of a contracting eye and say, "What is in this RFP that we need to ask questions about?". There are things that come up that might be problem areas early on. I want to take you through some of the red flags. No RFI, draft, or industry day, so plunk, there, it's out, that could be a red flag. You did not know about it or maybe somebody else knows about it, and maybe it is not for you. Early on, on E-buy, when they would send out the notifications, the kind of "rule on the street" was that if you did not get the e-mail that said "Hey, it is out there", you were not supposed to bid on it. 

 

AF: We see that all the time. If we see something on E-buy and we did not get the e-mail, we believe it is not for us. We should not even bid. 

 

KK: But then I have spoken to contracting officers and they said "I did not know I was supposed to send an e-mail, I thought it went to everybody!". 

 

AF: And they will say "Antwayne, why didn't you bid?". We got that at the end of the fiscal year, we did not know about it. 

 

MG: So my advice would be, if you are in doubt, ask. Call the contracting officer and ask. 

 

KK: Did you send me a special note? They are not answering the phone by then. [LAUGHTER] Another red flag would be an unrealistically short time to respond. 

 

MG: Yes. 

 

KK: I think what was common with all of our companies is we have processes to get approvals to get the money to bid, to work on it, and five-day turnaround times, that seven-day, that screams you are searching for someone who is waiting to catch that. 

 

AF: Yep. 

 

MG: I certainly can see how that message would be perceived. 

 

KK: Yet when I've spoken with Contracting Officers who put out a short-term one, they say, "But you have a GSA schedule! It has rates, just write down the labor categories and the rates. That is all you need to do. It is already approved in your schedule."

 

SG: It is an RFQ. An RFQ still requires a technical approach. 

 

KK: We still have to get approvals even to write down those rates, even though they are approved in our schedule. 

 

AF: There are quality checks we have to go through. If you follow all of our processes and you're going through your red teams, your blue teams, your gold teams, you want to make sure we turn in a proposal to our partner, the government, that they would be proud of, that is compliant with what they want. It is very difficult to go through that level of quality in a three- to five-day turnaround unless you are doing a cut and paste job, and that is something we do not want to do. 

 

KK: Or unless you knew about it ahead of time. 

 

AF: Unless you knew about it ahead of time.

 

KK: Another is unrealisically short transition timeframes. So it might say, "Well, after award, we need the server consolidation up and running within one week". Wait a minute, that's not going to work. So, again, that might be an indication that it is wired to the incumbent. Next one would be evaluation criteria being rather vague- how they plan to award the contract. You don't want to see that. And price evaluations not clearly defined, especially on IDIQ contracts or a BPA where you are going to list all of your labor categories that you would like on that BPA. Well, how are they going to evaluate the pricing? Worst case scenario, they add up all the labor category rates and divide by the number of categories. That is kind of frightening. That is not a good evaluation.

 

MG: Yeah, I agree, it needs to be clear, it needs to be laid out.

 

KK: So we have a few more red flags. A high number of past performance requirements- so that includes contracting activities, like past performance references, but we are finding that Program Managers at the customer side are getting fatigued, and they do not want to fill it out. So you may have a stellar customer, but when you have used them on 20 different RFP's, they put up a sign that says "Don't call me, do not send us a request unless it is over $2 billion", the work. Or they put some restrictions in it, and they have fatigue. Not only is my company asking them for references, but Antwayne's company, and another vendor are all asking for references, so there is definite fatigue on the side of our customers. 

 

MG: Are you saying, Kitty, that you have to get a different reference for each requirement that you bid on? Can you use references from a previous requirement or previous bid?

 

KK: Right, they want us to go back to our customer. You did a training implementation. They would like to go back to the customers and say "Give me a reference". 

 

SG: More specifically, they are saying, even under an IDIQ, for task order one, you have got to go back and get past performance references. Here is a new project under the same IDIQ- go back to your customers and get past performance references. It is gotten to a point where one of our client agencies, a large Federal law enforcement agency, is not allowed to do past performance references anymore. It is taking up too much of their time. 

 

AF: The interesting thing is you almost have -- Kitty, I love your perspective -- is, I have a bank of a number of past performance references I can use, and at the end of the day, I have to say -- it is consistent with if I believe I'm going to win or if I have a good shot at winning, then I will say, "Let's use this particular person because that person, my customer, is only going to have a few that they are going to say, "Antwayne, I'm getting kind of tired, are you winning yet or not?", because they are asking every time for them, so we have to be careful with that. 

 

KK: A red flag to us is a high number of detailed qualifications for key personnel or a large number of key personnel. Not everyone is key. But when you have all of these requirements, it begins to look like somebody's job description, maybe somebody that already has the job, that is a red flag. And technical requirements that are very narrowly defined and seem to really specific a certain product or brand or service, they would be red flags to us that this probably is not a good deal for us. 

 

AF: We did have a story, I won't name the agency, but we had an agency that had a requirement for almost all of the key personnel to have a PMP with the exception of the overall program manager, and we could not understand why that was the case, so we started doing digging because this just did not make sense, and we eventually found out that the incumbent had a program manager that could not pass the PMP -- 

 

KK: Red flag. [LAUGHTER] 

 

AF: What we did literally was we actually wrote a note to that particular organization because we had a relationship with them, and we said "Let's be honest, this is going to be protested, so you should either change the requirement or delay it". They ended up delaying it because they realized it was so wired for the incumbent that they appreciated the fact that we understand they like the incumbent, that they are embedded, but don't do this because you are asking for a protest 

 

MG: Exactly. What was accomplished in the period, in which it was delayed? 

 

AF: They just stayed with the incumbent, but we knew that is what they wanted, and it was OK because I would rather know that, rather then spend my bid and proposal dollars, that the incumbent is doing well, they are doing a good job, that is fine. If I am the incumbent, I want to stay. I understood that is what they wantted, but I wanted an honest process. 

 

MG: I agree. In terms of the advantage that the incumbent has, there is virtually no way to erase that- the incumbent will always have that advantage.

 

KK: Well, we could talk about that advantage because there is called "incumbentitis", and "incumbentitis" means you know too much. [LAUGHTER] You are there with your customer every day, and it is actually becoming more of an issue, especially in areas of LPTA, when that's used as an evulation criteria. You have a framework of what your customer would like to know, but then when the procurement comes out, it is skinnied down, and you might be bidding on something at some higher level. And we did have an instance a number of years ago, we had a satellite contract, and we knew that the customer, the satellites needed to be re-pointed, but the repointing of the satellites was not in the RFP. Yet we included the pricing to repoint the satellites, which we knew needed to occur, and someone else won that deal because they did not price in the repointing of the satellites. A month later, after that award, they had to repoint the satellites. How about that? 

 

SG: Incumbentitis, what our definition is, is "Writing to what you know the client needs and not what they ask for in the RFP". We beat our folks over the head with that- write to what is in the RFP. 

 

MG: Exactly. I understand what you are saying, Kitty, but you have to balance the two. Maybe you do know that down the road that this will have to be done but it is not in the RFQ.

 

KK: Correct. 

 

SG: Antwayne used the term partner earlier, and we view ourselves as a partner with government as well. And one of the things we value as well in a partnership as when they communicate clearly with us too. And I will talk about this a little bit more during communication, but a good example of that is when there is a multiple award IDIQ. If a new task comes out for that IDIQ or a call under a multiple award BPA, and there is somebody currently in place performing that work, tell us that. Just give us that information; then, we can make a more informed decision and we can bids on something that has a higher win probability and allocate those B&P funds appropriately. We love two-way streets and partnerships. 

 

MG: I agree with you. I think for most of us in this world of acquisition, what we are constantly told, what is reinforced is the issue of fairness. We don't do anything that is going to tip the scales one way or the other, so. 

 

KK: It is hard to avoid that, and that leads us to the next part of qualifying the deal. These are some of the issues we run through as we look at some of the RFPs. These are not red flags but, as we are reviewing the RFPs, these are some of the things that we see. 

 

MG: Before we going to that, Kitty, on the issue of red flags, are the red flags ever used in a positive way? 

 

KK: I would put "positive" on shaky ground. There are certainly some of those could be used to give -- if a contracting activity really wanted a particular vendor, they could use some of those red flags such as a short timeframe. The requirements and turn them around... Antwayne, it is amost like to warn us off, that it is really intended for someone else. 

 

MG: So kind of a key qualifier. 

 

AF: Right. Now there are some exceptions. End of the fiscal year from the small business perspective, when we were 8A, we knew that you literally had to turn around a proposal in three weeks, two weeks. Before we graduated from 8A, we literally had to do a proposal overnight because those dollars, they had to spend the money, so we were aware of that factor. I think small businesses are aware of that towards the end of the fiscal year, but particularly for the 8A program, they will have to spend those dollars. They are aware of that exception. 

 

MG: OK. 

 

KK: And if you really do want an incumbent there, they are doing a good job, we do not want to take our resources there if there is no chance. It is not a bad thing.

 

MG: In our personal lives, that is probably exactly what we would do, but the fact that we are working with tax dollars -- 

 

KK: Right, and it may not even be cognizant, it is just "gotchas". Some things we do to qualify the deal is, we go and read the RFP, what is going on there. Templates and recycled RFP's. Time is short, contracting activities are understaffed at times, and use templates. That is good! Just asking that you make sure of a couple of things. One, erase the old information. Nothing will warn us off faster than saying the location of the work is at 100 S. Main Street. Hey, isn't that where our competitor is located? Take that out of the template. Or the recycled RFP. Also, make sure that the template you are using aligns with the contract because if you are doing a GSA schedule procurement and you are using a template that refers to cost and pricing data, you're going to get some questions. That leads us into the next part, the Q and A, which I find some of the most entertaining part of the whole RFP process. It is interesting when you get back the questions -- how many are there? What is the quality of responses? Not too long ago, there was an opportunity, and on the first bounce, 436 questions were submitted. So you might think you have an issue with your RFP and contemplate pulling it back because on the second bounce, they got about 135 more, and still the RFP was not pulled back. It has now since been awarded, and no surprise, it is under protest. I do not know the details of the protest, but I would imagine over 500 questions might produce some fodder. 

 

MG: Yeah, I would think the early warning signs were there. 

 

KK: Right. And the quality -- you could tell the fatigue on the contracting activity as far as the answering. They kept referring- "Well, see question 13, see question 13". Towards the end, they got questions -- what operating system are you on? And they wrote "don't understand your question". You could tell they were tired. On the Q&A, I view it, I once had a professor who said the final exam is the last chance to get educated on that subject, and I view Q&As the same way- it is an opportunity to educate. And so understand that, when we ask questions, we are trying to send you a message. Something is wrong, and we are trying to tell you that. We might not be able to blatantly come out and say it. Working at another company, I had a question and it was a big data center implementation, and required literally staffing up the data center, and yet, being GSA, they said, "No open market over $3000". Well, when you stuff a data center, you have T1 lines, you have infrastructure, you have facilities, and we asked a question on that, given that you couldn't have the open market, and that those type of things do not normally occur on a GSA schedule, and the Contracting Officer responded that space was included in our GSA rates. 

 

MG: Wow. Ok. 

 

KK: But, to that Contracting Officer, if you are out there, the space is a cubicle or an office maybe, but not a data center. So you are trying to communicate something is off. 

 

MG: Exactly. It is not being received. 

 

KK: The other thing on there is leave ample time so we can review the RFP and develop the questions. I realize timelines can be short, but we sometimes get RFP's, say they came in on a Monday and they want questions by Wednesday, and then say no further questions will be accepted. That really sometimes is not enough time to be able to review that. On the flipside, respond to our questions well in advance of the RFP being due. Too often they get answered two days before, and it may cause a change in the solution, which is a change in the price, and then the approvals have to go through. 

 

SG: We've had that happen as well. "Questions are answered on Thursday, proposals still due on Monday", that is four working days away, right? 

 

MG: So we need to get better with our time and be more succinct and accurate in our responses to you. 

 

KK: We understand that contracting activities often need to go back to program offices to get to the answers and there is a lot of communication going on in the government side, and we understand that. 

 

SG: Even more, we want that. We want the contracting office to work with the program office to get the correct answer that will help us provide the best solution to the government. 

 

MG: Exactly. They can't do that in isolation. They have to go back to the program or the requirements office because it is their program. They know it. 

 

KK: We know contracting activities want to meet their deadlines, but please add on extra days to the procurement. It will make for a better RFP. 

 

MG: And I think, in some instances, it will save you, if you take time on the front end, it will save you on the backend, or having to deal with a protest or whatever, or almost 500 questions. 

 

KK: Along with qualifying the deal, some other things we look at- terms and conditions appropriate to the contract, are we looking at FAR 8.4, the schedules, are we looking at FAR 13 for simplified acquisition, FAR 15 for the negotiation? In the GSA Schedules world, you can add additional clauses as long as they do not conflict, and we see that from agencies, and that is generally fine. But just have an overall understanding of what belongs in there. We had an RFP once that came in and said it was under both FAR 8.4 and FAR Part 16, the IDIQs. Well, they are a little different. It asked for a Buy America product, but the GSA Schedules bring in the Trade Agreements Act. So, I could not guarantee that the products being sold were Buy American but I could guarantee they were Trade Agreement Act-certified, so just understanding where you are in the FAR will take out a bunch of those questions. 

 

MG: OK. 

 

KK: Another hot button we have discussed is requirements aligning with your contract type, and a lot of times this happens in the fixed-price arena. I start off reading so many RFPs that say, "This is a performance-based, firm fixed-price task order, and when I get further into it, I find that on invoicing we will be reporting all of our labor hours, the hours and the rate, turning it more into a level-of-effort or time-and-materials.

 

MG: You have seen this? 

 

SG: We have seen it many times, and there comes a point where I kind of feel the contracting office has to educate their client. I realize that the client or program office is sometimes asking for this: "We want to see the burn rate. We want to see which labor category is charging what number of hours". But that is not what is key here on fixed price, especially on performance-based fixed price. We are not looking at the method to get to the end result, you should be focused on the end result because does the end result meet the criteria that were established? If it does, box checked, deliverable accepted, payment paid.

 

KK: I wondered, from a personal basis: 10 years ago a lot of our business was time and materials, and contracting activities had a lot of control, discretion because they saw our labor rates and our categories and they would approve sometimes on a line item basis. But when we moved to firm-fixed price, that is not necessary anymore, and I wonder, is it more habit or control? Contracting Officers want to know what is going on. There has to be some element of trust in allowing the contractors to manage their business to get to that price. 

 

AF: I think, going back to the previous point on fixed-price contracts- your requirements in the contract have to be very structured because if we are looking at a fixed-price contract with a high risk of undefined requirements. That risk has been passed onto us as industry, so we are very careful if it is a fixed-price contract that those requirements are very structured and very measurable and achievable such that if we go for that deliverable, we will be consistent in making sure that we do address- as we say, "meet the mail". But, if they have ambiguous requirements, we are very leary of that for a fixed-price contract- the risk is just too high. 

 

MG: I get that. 

 

KK: And then. last one on this page here, understanding the contract vehicle. So, especially in GSA, we have GSA Alliant, GSA Stars, and GSA Schedules, and Alliant and Stars are not schedules, and they operate a little bit differently. I am not sure if it is a training issue or just familiarity with the vehicle but understanding that on GWACs you do not normally ask for a discount off the price. It is a little bit different from the Schedule. Or in Alliant, those rates are meant for T&M. On Oasis, the rates that are in the contract are meant for time-and-materials in a non-competitive arena, in that they are allowing competition to determine the actual rates when it comes to fixed-price. So, just being aware of the nuances between the different vehicles. 

 

MG: I agree, the basis of the award is different for both vehicles. 

 

KK: We have a few more here, qualifying the deal just goes on and on, but it is important. 

 

MG: It is very 'meaty'. 

 

KK: Pricing requirements- as we mentioned before, we would like to see them in the evaluation criteria to make sure we are not just adding and dividing rates to get to an average. Look at your spreadsheets and formulas, make sure they work. And understand that when there is complex pricing tables, that may put off new bidders and it certainly increases the cost.

 

When you have page limitations- I talked to a capture manager, these were interesting. They look at their page limitations to get a sense of how much the proposal is going to cost, how much writing is going to be needed on there. Page limitations can have an effect on competition- if you have an unlimited, that could favor incumbents. Take a look at that, it is nice to box it in for us. Finally, we have oral presentations, a number of agencies are moving there. Make sure you have a clearly defined process on that. We think it is a good idea that you actually request to meet with the actual delivery or technical team presenting it. It is very easy to bring in those performers for a new company, but I think is more meaningful to talk to the tech team. To just recognize, too, that oral presentations do add to your proposal costs. Anything on those? I went a bit quickly. 

 

SG: No. 

 

MG: I have a question on a point that you just made that they add to your proposal costs. Can you explain a little bit more about that? Is it the travel to get to the location? Is it the media tool? 

 

KK: It can be the whole show. We personally bring in, and I don't believe we're alone on this -- there is a whole industry of proposal coaching. Coaches that come in and help you put together your presentation, assist on your speaking skills. 

 

SG: You are talking travel costs and the time away from the job for proposal teams and the preparation of the presentation, the content, preparation of the delivery of the presentation, wheter be with a coach or without a coach. We are talking days and days of time to make sure we get it right. There is nothing more frustrating than getting in the room and talking to the folks a little bit ahead of time and realizing that they do not have objective criteria for evaluating your presentation. That has got to be in place. It is not who you know, it is how well the content in your presentation meets requirements. Not even how well it is presented, because I can tell you, a lot of my technical folks are the best folks on the job are not the best presenters. And I tell them it is OK to hesitate, it is OK to pause and think about your response, it is OK to be nervous -- that shows you care about what you are doing. That has to be there when evaluators have to realize it is not the polish it is the substance that matters.

 

AF: The other thing that is important is, particularly if you have somebody where that is their science, their technology, they may not be the orator, so we have to be very careful from that perspective. This cottage industry of oral coaches, we are talking body language -- they would not like me using my hands right now. [LAUGHTER] Literally looking at body language, where you sit in the room. For individuals who are the greatest people in the world about delivery, you're putting them in a situation where they are like "Oh my God, what is all this stress?" So, understanding that we want to present well, but understand that we are bringing the real people that are doing the work and understanding that is what they do. 

 

KK: But overall, I think we like oral presentations, we like that ability, especially if there is some dialogue, Q&A, interaction with that. But a lot of times the oral presentation is being composed at the same time you are finishing up your physical proposals, so you have a lot of overtime going on as far as resources. 

 

MG: I see. We just need to be clear about how we will evaluate the proposals. 

 

KK: And the timing. When will that occur? Because we need to make sure all of our resources are geographically in the same area at the same time. That takes some coordination. 

 

SG: I will say, for larger bids, I do like a two-stage process. Take the written proposals, do a down-select, and bring the folks who have the best written responses to the orals. 

 

MG: That make sense. 

 

KK: And FedSim has been working with video orals lately. I'm kind of watching to see how that happens. I worked with a team that went through that already. They enjoyed it. That was a positive and I look forward to that. 

 

MG: That is wonderful. 

 

KK: I think that covers qualifying the deal.

 

MG: OK, so now we have qualified the deal. Next we look to resources. Stuart, I'm going to ask you if you could speak more about what resources you are referring to. Does this include the folks who actually write the proposals, or what is the universe? 

 

SG: When we say resources, we're talking about the people, the time, the cost, the effort. It really is a full bundle or a full bag of resources required. We have a limited amount of funds, so at times we can fund our proposals. But at other times, we lean on our personnel to do that overtime that Kitty referred to, especially if it is something you might be personally interested in and have a vested stake in. We won't leean on our folks to do uncompensated overtime. The bottom-line for us is to be smart and make smart decisions on the qualifiying data Kitty just talked about.

 

Let me talk about a few factors that might impact our ability. First of all, let's look at schedule. Just because we get an RFP, it doesn't mean we will automatically respond to it. We have to look at our internal factors. What else are we working at at this point in time? Where is my proposal staff? I should be so lucky to have a large proposal staff. What are they working on now? We have a few key folks we rely on to do quallity assurance, to do our editing and formatting. If those folks are engaged in a couple other large efforts, it will make it much more difficult for me to respond to that effort. Even more than that or equally as important as that is where is my technical staff that has to write the response? If my technical staff is working full-time at a client site and I'm going to pull them off of that to work on a proposal, I am getting hit twice. I am getting hit with the B&P cost, and if it's a level-of-effort contract, I'm losing the revenue. That is a very costly investment for me to make. Kitty talked about time, how much time do we have to develop the proposal. We certainly look at that as part of our resource and budget accordingly. And when I say budget, we do run a proposal like it is a project. We'll put it in Microsoft Project, we'll set up a timeline, we will put the formal deliverables in place, and that is what has got to be met, otherwise they end up getting done at the last minute and then it is 72-hour days. When is it due? This is my favorite case. Every year right around Thanksgiving, we start looking for proposals to draw because we know Federal employees have use or lose. By the way, we do, too, and we see that proposal coming, or we get wind of it coming, and it's going to come, oh, December 15th, due January 2nd. We have had it more than one time. We love you guys, we want to respond to it, we think it is an important proposal, but sometimes it is hard to get staff off of their European vacations or wherever they are heading this year for the holidays to come in and work on a proposal. 

 

MG: We know there is a rush right at the end of the fiscal year. I just did not think about the holidays. 

 

SG: I have been doing this since 1995. It is almost every year without fail that we have to pull staff either Thanksgiving and/or the Christmas holiday. As I have gotten older and I have a family, I've realized that Christmas holiday is less flexible because that is when my kids are out of school, too. We want to respond, we really do, just mutual consideration of your partner is appreciated. It's helpful.

 

Let's also talk about the solution required. Is this a solution that we have to be innovative and creative and come up with a solution, or is this RFP responding to essentially a staff augmentation solution? The staff augmentation is an easier proposal to write and we can write it fairly quickly, if that's a line of business with a client we're particularly interested in. If it is not, it takes a lot more effort, a lot more resources. 

 

MG: What do you mean by staff augmentation? 

 

SG: There are contracts whether it is seeded type of contract or customer support contract, and it does not necessarily mean -- people hear seed and think low level, and seed is not necessarily low level, it is actually engineering technical support. We have a customer where our PhD level folks sit on site to augment their work for us. 

 

MG: I see. 

 

SG: A big decision is for a lot of these -- what is our procurement strategy? What is our capture strategy? Are we going to prime or are we going to sub it? And if we do prime it, should we put a team together? Maybe the team members we talk to want to prime it. Then we have to discuss to is in the best position to prime it and lead this effort. When we prime an opportunity, we see that as an opportunity to evolve smaller, disadvantaged businesses, and that gives them an opportunity to develop capabilities and experience, and Antwayne is nodding yes here. 

 

AF: Yeah, I am. One thing we have become more aggressive with in terms of ensuring that we make sure workshare now is defined up front on an actual requirement, and this is something that large businesses were not comfortable with at first, but my perspective is we are going to participate in the bid process as hard as we can, but if I don't get workshare set up ahead of time, I will not bid because I want to make sure that when it is awarded, that we participate in the win party and the work share. I think it is wonderful, going back to my former mentor with HP, that they understand that and they have been very good when it comes to developing that. 

 

KK: Why, thank you. [LAUGHTER] 

 

SG: And that's a great point. We have been in a situation where a contract has been awarded, on the back of our credentials, and we have seen next to no workshare come out of it. I did have the government in this specific case go back and say, "Hang on, timeout, you awarded this because of your teammate. Where are they? Where are your key personnel?"

 

AF: I think NASA was really good at this, but in looking at the procurement side, I would literally evaluate and put real teeth behind the fee associated with the subcontracting clients. It is not enough to say you did not do it. If you associate and evaluate the option and the fee based on your small business participation, and we need the government to do that. The large businesses that do a good job should be rewarded for that because they have lived up to the expectation. 

 

MG: And you are saying not just fall back on a good faith effort. 

 

SG: No. And that is a fair point from a mid-to a large company. But what I think also impacts that, and I have seen this. We have RFPs come out and say only the prime contractor's capability will be evaluated. Why did I just put a team together? I've brought Antwayne on board because he has a very specific capability that augments our solution and really provides a better solution to the government. Why don't you evaluate his capabilities? I don't understand the thought behind that. The suggestion there would be please, evaluate our entire team's capabilities. We have assembled a team for a reason. 

 

KK: I also like on the GSA Schedules that there are contracting team arrangements to be able to bring teams together. They have got a number of uses. They can help you -- in our case, we don't have product. We are the services side of HP, and when we put together a full solution, I will go out and team for that product and bring those companies on board. It also helps bring in the niche players for what we don't have, but it is important for the contracting activity to remember that each of those team members has a prime status, and a lot of times reading through the RFP, they are referred to -- I will often have to write questions because they seem to be confused with subcontractors. So understanding that those CTA members are going to bring their own schedule with their own party, their own terms, their own labor categories. It has some great pluses if you are a business not making $25,000 a year on a GSA schedule, it is a great way for those companies, instead of subcontracting, if they come in as a contracting team member to gain GSA sales. So there are some real positives bringing people in there. But there needs to be some recognition that they are on equal footing, the same thing for their past performances. It gets a little odd if it is products and a solution and it's maybe a small piece of the product, but maybe for major CTAs to involve their past performances as well. 

 

SG: I'm going to continue here and shift a little bit from bidding to delivering. Checking on our resources to deliver is part of our screen and determination and part of our resource allocation for making that bid. Kitty mentioned earlier about key staff, and key staff qualifications. We have to make sure we have that key staff, and we have to commit to having the key staff available at the anticipated time of award. We have to look at our staffing bench, which I always laugh at--we do not have a staffing bench. 

 

KK: There are no benches anymore. 

 

SG: There is no bench, there is no beach. 

 

KK: No bleachers. 

 

SG: The environment is such that we cannot afford to keep people standing on the sideline, waiting for the next project to come in. That is why communication is so key, that is why sticking to schedules is so important, so you can get it back to us. We have found that it has happened that we get an award, and I go back to the government--you are six weeks past your award date, that person is now assigned to another project. Yes, I can transition them off of that project, but I need three weeks to do that. I went to give you the best solution, but we have to look at the availability of that personnel and be able to plan accordingly. Similarly, if there are certain certifications or in a classified environment if clearances are involved, we have to make sure we have those personnel, and if we don't, we will make an investment to line those people up in the right situation for our company. 

 

KK: You said the key word -- it is an investment. 

 

SG: Are there travel requirements is something else we look at--where is the work being performed? If the work is being performed somewhere in the D.C. area, we are pretty confident we can manage it and work very well. If it is being awarded in Fort [INAUDIBLE] where we do not have a large presence, that is something I am going to be thinking twice about. Can I operate, and can I ensure that that quality of work will be where it needs to be to hit, as Kitty said earlier, the reputation of the company and the quality of the deliverable. What is our transition plan? It's often a requirement on a large-scale opportunity to have a transition plan. I need to put that plan in place with the appropriate timing to meet the requirements. That means people, scheduling, planning, investing. And this is more Kitty's field than mine, when it is an IT or infrastructure investment or procurement, there is an investment that I have to make sure I can come in and either set up that server network or set up that hosting environment to meet the requirement. That is something I have got to determine whether I can do, whether I want to do, whether I have the money to do.

 

AF: One investment, we've recently started doing business in Afghanistan. There was a significant investment in licensing insurances that we were not as a small business aware of, but we really wanted to pursue international work. I think our folks at this particular agency, the State Department, they understood what we needed, but it was a significant investment just to have the capability and the opportunity to do business in Afghanistan and overseas. I know for an international organization such as yours, you guys are used to that, but midsize and smalls have to recognize that the opportunities are there, but there are significant investments that need to be made. 

 

KK: We even have our own investment challenges. When we invest in something, maybe a data center or infrastructure, there is a big call now for managed service in the government, and that calls for a lot of investment on our side to set up that center, set up that data center. We need to depreciate that expense over time, or amortize it. Our norm might be a three-year to a five-year window. The government can terminate for convenience pretty much at any time, so that is one of the risks we have. We do look also for those opportunities with that period of performance long enough that we can amortize it. 

 

MG: That is a good point. 

 

SG: It's time to move on to win probability. 

 

MG: We have qualified the deal. We have identified, looked at, and assessed our resources. Next, we get to the win probability. A lot of consideration is given to the probability or likelihood of winning the competition. We know that your win probability is zero if you do not respond to the proposal, kind of like the old Maryland lottery's slogan -- you got to play to win. What do you look at, Antwayne, when you are assessing your win probability? 

 

AF: That's a great question, one of our favorite subjects as industry. Should we bid or not? You have the perspective, you got to play to win. To use a baseball analogy, you are not going to hit a homerun if you do not swing, but there are so many factors you have to look at. We talked about this earlier -- is there fair competition? At a minimum, that is what we ask for. All we are saying is level the playing field. Give us a fair chance to win this particular opportunity. Make sure we understand the rules and that everyone is playing by the same rules. Evaluation criteria -- make sure it is specific and that we understand it, both on technical and price. It's difficult at times when you hear "best value" because -- what is "best value"? I have seen different procurements that really spell it out and others that say it is up to the discretion of the government. That is a little leery at times because I do not know if I am best value if I lose. I think I am best value, but how do I know? I know we put forth our best effort. I know we put forth a fair price, and most of the time, we will see that it is technically accessible, what makes Stuart's proposal better than mine from a best value perspective? You guys have any perspective on that? It's always a nebulous topic.

 

SG: We very rarely see objective criteria defining what best value really means. What we see in particular is when there is a labor category buildup to the price. In my world, the training world, does my senior instructional designer have the same qualifications as Kitty's and Antwayne's, in building that cost up? When they don't we're not doing an apples-to-apples comparison, so how do I have confidence that we have a best value determination? So you are spot on. 

 

AF: When we look at another topic -- is our solution competitive? This is important because I think companies that are serious about doing business with the government want to make sure we have some discriminators. We want to make sure that as a government, you can say, "This is why we selected this particular company -- because they had some unique value proposition, some set of qualities that are really going to raise the bar for our government partners". I think that is important, as well as best practices. We need to make sure we are not delivering services that aren't proven. We want to make sure it's based on best practices. One of the things I'm sure all of us talk about is we want to learn from previous engagements. Our perspective is if we have delivered well, how do we then take something else and deliver for this agency once we understand that agency is? We want to bring best practices to the table and some way of discriminating, such that we understand it is a value proposition we adding here. Certifications are important from a competition perspective. We are looking at some way of separating people. All of these certifications in the government that stamp you as -- that quality is important to me. If you are a [INAUDIBLE] level 3, 4, 5 company, it takes a large investment going back previously to get there. If you're ISO 9000, ISO 27000, that means on top of everything that you are doing, you have invested in that, and I think -- can we win this if we see requirements for those certifications? We understand that the government's perception of quality matches ours and that they are looking at -- you know, we want a company that is willing to make that type of investment. I think I have hit all of that one. Let's get going. Let's keep going. I hit the bull's-eye.

 

Price. We'll talk later on about this price sensitivity. We understand the environment is getting more competitive. This word that no one knew a few years ago called sequestration is in everyone's home now. We understand that that drives prices down. We understand that the government wants the best price that they can. We just have to be aware of the fact that they have also increased requirements for individuals. So there is a transition that has to go on between making sure that we sensitize our staff and people on salaries and price by trying to give the government the best we can do. I think industry has done a really good job of trying to be sensitive to price and making sure that we are competitive. We just want to make sure that the government understands also if they want the Porsche, then there is Porsche prices, and they have to be sensitive to the degrees and certifications and clearances that people have. People have invested in those things, and those are important. 

 

KK: Along the same lines, that is tied a lot with requirements to get to that competitive price, to have really well speced requirements. We had a case where we bid the Tesla, and from the winning awardee's price, it was clear the government wanted the Ford Focus, and it was because we did not understand the requirements. They were unclear on what we thought was wanted -- they were unclear, and what we thought was wanted was to the moon and back, but it turned out they were looking for a much simpler solution, but that was not clear in the requirements. That helps bring you to a more competitive price. 

 

MG: Right. If we are asking for a Ford focus, that is what we want. 

 

KK: Yes, make that clear. 

 

MG: Something greater is not going to get you there. That could come across as gold plating. Why pay for something that we do not need? You have to kind of balance it there. Oftentimes, if you have a better solution -- we are saying we want this Focus, and you are saying, "Listen, the solution I am proposing gives you all of that plus, and you can use this because x, y, and z," that is something that will get our attention. 

 

AF: That is why we sometimes like optional cleanse, because you have to be compliant, but if you get a nice optional cleanse, other ideas, that's where we can put that in. Competitive analysis -- we coined the term "coopertition". Today we are competitors, and tomorrow we are cooperating together, but we have to do an analysis. Is there an incumbent, we talked about earlier, that is doing a really good job, and if they are doing a really good job, and we really feel that it is hard to get them out, we may not bid. The whole purpose is to get more people bidding, but if that incumbent is doing a really good job, you may not see as many bids that I think the government would like to see. You will also look at who may be likely to bid, and you are analyzing your competitors, looking at their strengths and weaknesses. You are also looking at how they may attack you because we are all in the same room. We all go to industry day together. We all sign the chart. You are looking at a piece of paper that says, "Oh, they are bidding again." You go through a bit of analysis. If you look at industry day, there's a lot of war going on in that room no one knows about. You are just looking around and seeing, "Oh, Stuart is bidding." You are aware of his strengths, and so if you are doing what he does, you have now tipped that off. It is important that people understand why sometimes on industry day -- I think you mentioned you do not get a lot of questions. Because I may not want to tip the fact that I do not know something, but I am really looking at that as can we win this opportunity? These are critical factors that lend itself on why you may or may not be receiving as many bids as you would like. 

 

MG: Let me ask you this -- you mentioned about if the incumbent was doing a good job, it may be difficult to break through that. How do you know if the incumbent is doing well? Is this information you guys share amongst yourselves? 

 

AF: I will start off -- we talked about this earlier. We had better be in there six months to a year ahead of time. Chances are if I am in there marketing enough and seeing, and I am hearing great things about the incumbent. You are saying, "oh, we love them." Once I was at a briefing, and the incumbent actually gave the overview about the opportunity. We immediately left because we knew that incumbent did an excellent job. 

 

KK: I would say that is all about this. Prequalifying the deal. And knowing your customer . 

 

MG: OK. Antwayne, a lot of the discussion has been or has a financial overtone. In the context of the Federal Government and our requirements, the risk, at least, of nonpayment is negligible. Can you help us understand what other risks you all face in this context? 

 

AF: We mentioned something very early in terms of what we have in common. One of things that each company, regardless of the size that you are -- you are not going to risk your reputation, and that is in terms of delivery, price, performance. Everything sort of wraps up in that because if the requirements is undefined, then literally, I know I have before -- you have lost money on a deal because at the end of the day, I have to deliver, but that deal became highly risky, and we made the decision to deliver on a requirement that was undefined because it was fixed price. I don't want to be in the habit of doing that because I risk my company, but most companies I know that have any sense of passion about what they do are not going to risk not delivering. From a large business perspective, you guys see the same thing? 

 

KK: Absolutely. It is critical to us to assess the risk. That's one of the elements we have as part of our qualifying the deal is to do a risk assessment. 

 

AF: I think that from that risk -- we are really looking at -- and this is important. Overall, does this requirement fit our strategy and our capabilities? You may see something or a requirement that looks really good and, literally, somebody says, "you should do this," but you recognize that stretches you beyond where you should be, and it increases the risk on performance, getting people that are qualified to do the particular job. Location is important. Maybe not as much for a large business, but for a smaller business. My ability to do work across the country has to be a proactive endeavor. That means I need to put an office in California, for example, and have somebody there that believes what my company believes in. So do we have the ability to retain people, get people to do the job? Do we understand the culture and location? What Washington in this area looks like is far different from California. We had people there once, and my people were so different, I had to go out there and understand the cultural impact of this. We talk about technical savvy and making sure that you can get people that regardless of the level -- high in people, people that have this requirement -- I may go in and win this opportunity based on people with an education level or a certain qualification or certain skill set. People leave. As people leave, do I have the ability to replace that person a year later with somebody that meets that level, with a price we talked about? These risks are things that we have to look at for performance purposes. Mitigation plans -- you know, there are times when we have to mitigate risk of performance, changing requirements, other activities that we have to make sure we have the capacity, the capability, the subject matter expert to be able to reduce that risk and address an issue if we happen not to perform or if a requirement substantially changes because of other federal activities. Anything else on that? I'm on a roll.

 

This one is important. Any company that is in business, even the nonprofits want to make sure they meet their revenue and profit goals. As we talked about, two things are important. One, we want to deliver. You have to have passion for delivery, but you want to make money doing this. You want to make sure you have the wherewithal to -- the profit normally goes back to invest in your company. You are not going to get the certifications. You are not going to get the strategies, the marketing, everything you have to do if you do not take that profit to invest in your company. I think having that risk in being able to understand -- will I make money on this particular endeavor, at what point? If it is a multi-your contract, you literally may see the first year or so where you may break even or not make money, and you hope that the option gets renewed because you may invest. We have even as a small business, I have invested in a particular opportunity because I wanted that customer, and I knew when I went in, but that was a risk on my side that I had to make sure I was prepared to accept. 

 

KK: And not all your business can be like that, or you would not be in business. 

 

AF: I would not be in business at all. Now we are going to talk about this bad word that has entered our language like "sequestration " -- LPTA. I understand it from the government perspective. If you can have something that is technically acceptable, and it is the lowest price, in theory, that is a good deal. It is just very difficult, and I'm not sure all agencies -- I know if we take time to put forth a proposal, and in some cases, the way I understand it, that proposal may never get read. Imagine spending all the bidding proposal dollars we spent, and imagine what we have done to put that together, and we have done a great job, and that proposal never got read and will never see the light of day -- 

 

MG: I need you to expand on that. 

 

AF: You want to talk to this one especially, as one of your favorites?

 

KK: We having encountered this not as a company, but through the -- the various associations have heard about this. Low-price technically acceptable procurement, that there are some contracting activities that look at the prices coming in, and they look at the lowest priced proposal first, and after they review it, if it's technically acceptable, that's it. They are done. They do not review any others because they have already identified the low-price technically acceptable proposal. 

 

MG: When I was a contracting officer, we did the opposite. We looked at the technical side first, and of those that were top, then we looked at the price. 

 

KK: Right. 

 

MG: You are saying the reverse. 

 

KK: Look at the lowest price, and if it is technically acceptable you are done. It could be a product of contracting activities that are stressed and understaffed and looking to find an easier way to do it. But LPTA has other aspects going into it from a risk standpoint that, should you be the lucky winner of an LPTA evaluation, you really have to pay close attention to the management of the resources because you are really managing to the lowest common denominator, and if the RFP required a bachelor's in five years for the systems administrator, that is what you want to keep it at, because higher more experienced talent will cost you more money. This could be an issue for incumbents because incumbents may have staff that has been on the ground for a long time with that customer, they have developed relationships, and you went as the re-compete, and you take those resources away and put on the ground the ones that were actually required as far as the RFP. That then puts a risk at that relationship because your customer says, "Where's Charlie? I like working with Charlie. I have been working with Charlie for five years." And we say, "Charlie moved on. Here is Ned. Ned is good and meets what is required." Again, that is a stress on a relationship. Or requirements that aren't well defined--you go, "Well, where's that report or action you used to do for me?" Well, it wasn't in the new requirement, so we are not going to be able to perform it because we didn't price it in. Again, that's a stress on our relationship there, and it goes back to our reputation, our past performance. There are things we strive for. LPTA brings a number of risks. 

 

AF: There is a place for it on well-defined requirements that do not necessarily require certain activities or certain experiences, but we have to use it as a tool. Not just "I got this hammer" every time. Contractual risks are important. Terms and conditions -- we have made lawyers extremely rich based on the increased number of terms and conditions in the RFPs at this point. Years ago, I was able to read it myself. I have given up, and my lawyer is very happy about what he is doing at this point because I got to make sure that that term and condition is compliant with the FAR. Also, if I am priming it , there's flow downs to my subs. If there is a large business under me, they do not know if they want to accept them or not. Similarly, if I am subbing, there's flow downs that come that makes sense for an HP, but they do not make sense for me. I'm not sure if they make sense all the time for you. 

 

SG: It depends what it is. We also have the RFPs that say you are required to flow down all of the clauses to your subcontractors, so that becomes a negotiation. If my subcontractors won't accept it, and the government comes back and want to evaluate my teammate agreement, I've got an invalid teaming agreement. It's a set of complexities, and our lawyers are happy too.

 

AF: Next topic under this is OCIs, and this is something that is very interesting. And I know governments sometimes are saying, "why aren't you bidding," and there is a risk of--if I win this work, I will be OCI'd from doing the implementation work, which makes sense, but the smaller contract, the contract you go after is smaller, and you want the implementation for it. Literally, we started to shy away -- we have a management consulting practice, but we started to shy away from certain work because if I did the upfront analysis or we used to help governments select their products, and we did all this work, and suddenly, the big guys or another company would come in, and they would be there for five years. I was there for nine months, looking at the fruit of my labor being implemented for millions of dollars, and I'm happy for my seven dollars that I got. The OCI clause is -- although very good, we're not complaining about it, but just recognize that that will cause certain people not to bid because they want the larger opportunity of implementation work. And that is fair. It is just being aware of the fact that -- and I think the government has been much more upfront with understanding that if you do this, the follow-on work you will not be able to do. That is very important. 

 

MG: But then, for you, you have to make a business decision. If you're going to go for the upfront work, or forgo and wait for the backend. 

 

AF: We have made strategic decisions that at this particular agency, we are going to do this type of work with OCIs. That is from implementation, and that has been a conscious decision because maybe we want to be perceived as trusted advisors, and that is the role that we are playing for that particular agency, but that was a proactive decision. 

 

MG: OK. 

 

KK: OK. 

 

MG: Stuart, communicating with the Federal Government and us communicating with you. Procurement officials have to be careful about the information that they release to vendors or -- well, I'm going to say our partners. The element of fairness always has to be at the forefront. You do not want to disclose information to one source that will give them an unfair competitive edge over another. That is not to say that we should not communicate and we should not do it early because we should. Not only is it a good business practice, but mythbusters -- our mythbusting campaign tells us we should do this, it's a good thing. My question to you -- not only should we do that often, but especially in the area of high risk or complex procurements. How do we balance that? How do we balance the element of fairness, not giving away too much information with getting industry involved early on? 

 

SG: I think the key -- most communication is good communication, and most communication with the Federal Government, contrary to the comic behind me, is good communication. We realize that. What we recommend is do the early and often communication. By doing that, you provide an equal opportunity for everyone to communicate with you. Now, I realize on the other side of that, on complex procurements, that is a very significant time commitment for the Federal Government. If you are going to have meetings with all the potentially interested vendors, it is. Industry days do come. They do have a place. We see that they are not happening often enough, either industry days or one-on-ones. They really do help us in the long-term, even though there is that time commitment. It makes your job easier. If you get a proposal that is more structured and more specifically oriented to provide the solution you really need or are really asking for, your evaluation becomes easier. We think there is a win-win there. We're touched on this a couple of times. We realize in open forums, there's a reluctance to ask certain questions, either to tip our hands on our excellence or our ignorance. We are careful about that. 

 

MG: What do you think about using social media tools? Do you see that as being more helpful? 

 

SG: I think there is absolutely a place for it. I think Kitty mentioned Interact earlier, we find the new HCAAT procurement, the joint venture between OPM and GSA, they are phenomenal using the portal, getting information out there, announcing industry days ahead of time. They have gone as far as meeting with the Coalition for Government Procurement, setting up an industry day. It was a very valuable experience where I think there was a very positive information exchange, and it was a place where we could express some concern. Fixed price contract, why are you asking for labor category rates? Shouldn't you be asking what the actual cost is to develop product X? We had a discussion on innovation. I love being asked for innovation, but Federal Government, how are you measuring your innovation? What are your objective criteria for determining if my solution is innovative? It may be really innovative, but is it going to work? That was a very good example of where communication is taking place and I think had a very positive impact, positive result for both organizations, the procuring organizations as well as potential partners.

 

Something else we think is helpful is when an RFI is released, give us as much information as you can. Try not to stick to just the PWS or statement of work or statement of objectives. Go ahead and give us the terms and conditions; give us L&M. That gives us a great opportunity to come back to you and say, "Hey, no questions. That looks great," or "Can you revise or revisit L&M because we do not feel the preparation instructions and evaluation criteria match?" Or what I see more commonly -- the preparation instructions do not match the statement of objectives, so then I'm left guessing on how I should really be putting my proposal together. The clearer you are in the information you provide to us, the clearer response we can give back to you, and again, that much easier to evaluate. It is a win-win. Certainly, keeping us up to date even after we submit a proposal helps us. We will make an investment. We will try to keep those staff available if we think we are still in the game and we know that the award date is two weeks out. I can usually find a way to manage people and keep people together and keep that key personnel available. But after an indefinite time period, it gets harder and harder and harder. 

 

AF: We talked about this, where right now, I have a procurement that is about two years? Submitted two years ago. We have no idea when it will be awarded, and I have had people that have left the company that were key in that. We called and asked where we are, and they say we are evaluating it, so what do I do in that case? That is where communication is important, so we can anticipate the award date. 

 

SG: What we find that also helps us is that evaluation criteria we were talking about. It goes beyond just L&M. It goes into pricing, timeframe, delivery requirements. It really is a full set of criteria. Again, it makes it easier for us and easier for you. The big thing for the communication pitfall slide here is, even pre-award, talk to us. If there is a question about our proposal, do not disappear and make an assumption, which we will give you plenty of in our proposal -- do not make an assumption. Come back and ask us. We are happy to come down clarify information with you. We think that is something that is proper to do because we are not changing our proposal. We are explaining our proposal. We are explaining this assumption you interpreted to mean x, but really we meant y. We can clarify it for you. Give us an opportunity -- 

 

KK: I just want to say it is heartbreaking to find that out in a debrief. Something that could have been clarified on a question. We've encountered a contracting activity that thought that under GSA schedule procurements, if they asked a question, it meant they were in a discussion, and if they had a discussion under GSA schedule procurement, it automatically threw it into FAR Part 15. No, it does not. 

 

MG: I'm cringing. 

 

KK: We couldn't explain that at the time to the Contracting Officer. It's OK to have discussions under GSA schedule procurements, that will not put you under FAR Part 15, they are two completely separate parts of the FAR. That was heartbreaking, something that could have just been a clarification question did not occur, so, yes, please, open up, have discussions. 

 

SG: We are not saying it does not happen. It does happen. We would just like to see it happen more frequently -- that's all. I mention the word assumptions. Is it a good word or a bad word? I will tell you, if it is a fixed price procurement, you are going to get assumptions. We are assuming the risk, we have to protect ourselves. But let us know if you really want them or do not want them, or give us guidance. We like guidance, guidance makes our job easier. Kitty just mentioned learning something in a debrief. Debriefs are invaluable tools for us. Whether we win or we lose, we want to know what we did well. We want to know what our areas for improvement are. We want to know. Basically, it's our turn to get educated. It's our turn to get feedback on what we can do, so we can do it better next time. It is very important for us. The suggestion there is make them substantial. 

 

KK: Too often, we are hearing, on GSA Schedule procurements, that debriefs do not occur with GSA Schedules. Although the FAR, 8.4, does say that on request, an explanation, and so we have seen the full gamut of "You lost, that's your explanation" to something that looked very much like a terrific debrief that told us what happened. There is nothing more heartbreaking than losing a $45 million deal and hearing, "No, no debrief. It's GSA Sschedule." That just does not help anything. We often ask for debriefs when we win. We want to know what we did right for the next proposal. 

 

MG: Absolutely. 

 

KK: Just understand, mistakes happen. We may make a mistake in the proposal. We want to hear what. And there are cases where the contracting activity makes a mistake. Maybe in the evaluation or how they handle the procurement, and this is the opportunity for those things to be discovered and fixed. Not every debrief results in a protest. Even when you find something in a debrief that is grounds for a protest, the company may elect not to protest. We still believe that some contracting activities may not like you after you protest, and it can impede future awards. So there is sometimes a reticence to protest because you do not want to damage a relationship or a future relationship. More often than not, we hear that protests occur because the debrief was incomplete, and you walk out asking what they are hiding. What they did not tell us? For some companies, that may be the click to protest, to get that additional information. I like a good debrief. You learn stuff. 

 

AF: You get a good industry partner. I know when we had a debrief, we lost an opportunity, and when we got the debriefing, we realized our customer intimacy was off, and we had to do more homework with that particular customer because we thought we had the right solution, but we just did not have the intimacy we needed. We needed to do our homework, and that was important. We subsequently won a later deal because it let us know we needed to do a better job of learning the customer. 

 

KK: For us, it sparked a whole new process. 15 years ago, we lost a deal, and it turned out that on the past performance, customers had not responded with past performance questionnaires. We were rated neutral, but that affected our rating compared to the winner. We made a conscious effort afterwards to change our internal process, and making sure that the delivery managers went back and followed up with customers when we requested a past performance to make sure it was executed. So there is a lot of good that comes out of them. 

 

MG: I'm just wondering if some Contracting Officers just see this as -- the debriefing as a hotbed to get information to support a protest, and they kind of steer away from it. 

 

KK: No one ever likes to lose. [LAUGHTER] But you do want to find out what went wrong. I mean, why? 

 

SG: We unfortunately find that there are times when we just do not get a debrief. We request one, and it falls on deaf ears. I will use that to transition again to the after submission types of pitfalls. We want that communication even after we submit, whether it is awarded with a debrief or not yet awarded -- give us an idea of what is going on. I will be passionate about one point here. Sometimes I think it is lost on some of the Contracting Officers and some of the Federal Government officers that things that are delayed without communication put people's jobs in jeopardy. We have had to reduce our workforce because of an unknown. Turns around, we get that worked. Now we have reduced our workforce, but it has impacted our ability to meet the mission objectives of our client. This economy today, the world we are dealing with today -- it is more sensitive now than probably ever. Nobody likes to have that conversation with a person saying, " Antwayne, I'm sorry, tomorrow will be your last day because that bid did not come through," and believe me, it is worse in his seat. Because he's a person that I let go, but also because he is a small business owner. It's a tougher situation there, because that window is a shorter time frame. 

 

KK: It is hard. Last year, many of us in industry were commenting on the pending awards. There were more than usual, and they were taking longer. A year later to find out if you won. Others, you keep pinging the contracting office asking for news, "No, we'll let you know, no, we'll let you know," and you eventually find out they lost the funding. It just went away, but nobody told you, and it is still on somebody's radar. As a program manager, we have goals that we are graded on our performance, and if you have pending deals, that is part of it. You need to understand if that is going to go away, you have to go find more work to make up for your shortfalls, so it helps you plan better as a manager. 

 

SG: Absolutely. If we are kept in the dark, we cannot plan, we cannot be strategic, we can't even be tactical. We understand that it is a big workload for the Contracting Officers, the procurement organizations to respond to inquiries. We understand that. If you are getting that many inquiries, the suggestion is release the FedBizOps update, update the procurement, and that way everyone has access to it. 

 

MG: Or put something on GSA Interact.

 

KK: Right. Let us know it is still alive. Especially if it is something that in some cases, you may have an inkling you are still in the competitive range, so you might actually be doing some minor investment preparing for in the event you win because there might be a short transition period or quick ramp up as needed, so you might be doing something. You could be hiring niche personnel or putting out a contingency offer, and you need to know when to kind of have that sense of when to do it, so it is all very important to keep in the loop. Upon award, your customer does want it delivered. They want it up and running. 1.35.16

 

MG: Of late, we have come to be very familiar and expect CRs. That is just a way of life anymore. With those, it brings certainly a high level of uncertainty. I guess -- are we getting to our --

 

SG: I'm waiting on FY14 awards. [LAUGHTER] We are good. 

 

MG: Thank you. That was very informative. I just want to thank you all for this wonderful discussion and for bringing your incredible insight to us, but before we wrap up, Kitty, can you give us a little bit of context around how we can improve industry relationships? Leave us with some takeaways.  

 

KK: So, Stuart, Antwayne, and I discussed it, and we have six that we think that, not that we think will completely right the world, but certainly will go a long way in working on those communications. One is to understand that bid and proposal funds are limited. It is a finite amount. We have to pick and choose what we work on, and there are things that eat up that money faster than others, so that when we are working on a proposal, that writer is being paid. We bid what we believe we can win. I know that it was recently -- I think about a year ago enacted in the civilian side. It has been around in DoD for a long time, the need to have three bids. I have to tell you, we do dread the calls where they ask if you are going to bid, and you realize they need three bids, and your chance of winning is very low. We really only want to bid on what we believe we can win, and we bid on what we know we can deliver. That is important because past performance is key. There's a new thing--you will be hearing more about reputation management. Understanding how we look to the government customers, since CPARS is more available. So we want to look good, so we only bid on what we can deliver. Communication improves the proposed solution. Talk to us. Tell us what you need. Tell us what you want. Tell us what you really, really want. Clearly define the requirements and evaluation criteria. Make sure they match up. The more you can define requirements -- and I know that it is difficult in these skinny days. Program shops don't always have the personnel to fully develop those requirements, but they are becoming key, especially as we move to fixed price. Set realistic timelines and expectations. Understand quality takes time. Just tossing something over is not going to be what you really want.

 

 

 

KK: The second part of the question was -- how does industry find out about a potential RFP 180 days out when most procurement shops try not to communicate one-on-one with vendors to prevent favoritism? Besides procurement shops, our teams are out speaking with program managers. We could have worked at that agency, so we are interacting on a daily basis, and we are trying to find out more about the customer's mission, their objectives, some of the needs they have, and we are talking with program management staff, educating them possibly about our capabilities. We are also attending conferences and expos, and there is ongoing interaction. In addition, some agencies, like GSA, have been working on Interact on the social media to put out information about their upcoming procurement. They have asked us questions about how we see some of the cyber security rules, and we have been providing input there. There is dialogue going on before the procurement comes out, but it is not what I would call sensitive in nature.

 

 

AF: I'll start with that. As you look at a RFI, you are looking at the opportunity of, can you qualify enough organizations that can do the work? So you put the information in such that you get the feel for, are there small businesses that can actually do the work? But you also have to balance that between are we providing so much information that the RFI becomes an RFP from a perspective of how much solutioning we are putting in place, how much money we are taking to do the bid, so if you are looking for a balance, you should seek enough information to know that you have qualified companies in an RFI, but not so much that you are actually asking for the solution, and you are asking for a full proposal. Kitty, anything you want to add to that?

 

 

 

SG: And we look at the same considerations, even not as a small business. Our decision goes back to some of the things we discussed in the presentation -- is this a core capability of our company? Is this something that is a strength, that we can respond to, with the right solution, at a cost competitive proposal price basis? That is really how we are looking at these things. That impacts our business. The size factor there is, even as a midsize or large business, we still have revenue targets we have to hit. Can this contribute positively to our revenue cash flow?

 

MG: The decision points are very, very similar. Question 4--I am a federal employee and have not gotten a raise in three years, so I am offended by routine annual price increases for contractors of approximately 3% that are quoted in many of the price quotes that I review. Given the current budget climate where government salaries are constrained, can you justify the routine annual increases given to contractors? I'm going to hand that over to Kitty. 

 

KK: Thank you so much. When we look at escalation on a contract, it is not directly -- while labor rates do factor in, there's other factors in our labor categories. We have space, health insurance, benefits that are out there, and a lot of those energy costs have increased, so they are also contributing to the escalation. When we do have escalation, say, when it is GSA Schedule related, that GSA Contracting Officer generally relates our escalation to some documented proof of the escalation. Frequently, they use the Bureau of Labor Statistics, economic price adjustments in some of the tables to document where that adjustment should come from, so again, escalation, while related to some labor rates and people salaries, is also related to other things. What else is going on is a labor rate is not exactly attached to a particular person but a pool of people, and that pool of people is constantly shifting as companies have turnover. We need to attract new talent. As they leave, some of them go to government jobs, some to other companies, and we need to refresh that. In general, the person you hire in costs more than the person you are replacing. There are all the factors we look at with escalation. 

 

MG: So it is not just one single factor?

 

KK: Correct.

 

SG: And I love this question because it is a very sensitive issue. We have the staff retention issue. We have an environment, as the questioner points out very accurately, that is a challenging environment. It is challenging for contractors to keep our staffs gainfully employed because we do not have the stability we have had in the past. We had a particular contract at an agency where the agency -- five of my staff members have gone to work for the agency because of the stability of agency employment environment could provide our staff members. There are trade-offs. 

 

MG: Next question -- in regards to solicitations and RFPs coming out around the holidays, would you rather see the RFP come out before the holidays and then have a longer time to respond, or delay the release of the RFP until after the holidays and have a shorter time to respond? Stuart, what do you think about that? 

 

SG: Thanks. I had a feeling something like this might come up when I made my comment about holidays. Can I go off the board and answer a question that is not one of the choices? [LAUGHTER] We like the necessary time to respond to a proposal. If we do not have the time to respond, that will decrease the quality of the response you get, and make it harder for you to evaluate. We would like for you guys to consider our schedules as well as your schedules, and we need to have generally -- we need to have a set amount of time depending on the complexity of the proposal to respond. Unfortunately, what we see with the holiday issue is it is often just issued in the beginning of December, and you are turning in at the beginning of January. Could we add -- if it is going to be over the holidays, add a few weeks on the back end, allow us to adjust, those who are working through the holidays, as some folks do. Our company, at least, is a use or lose company due to Sarbanes-Oxley. We don't want the liability of leave being held against our books. Give us a little bit more on the backend, maybe, if it needs to be released over the holiday time period. We will get it done, but the more time we have, and the less we have to infringe on folks' holiday time, the better response you are going to get, quite frankly. 

 

MG: Thanks. Next question. I regularly get proposals that avoid addressing the criteria or are ambiguous or are otherwise deficient in addressing the criteria or are top-heavy with some meaningless marketing lingo. What is the problem with contractors being able to clearly address evaluation criteria, or better yet, not offering proposals that they cannot articulate their solutions according to the evaluation criteria? Well, you know, if your evaluation criteria is clear and unambiguous and you get a proposal that does not address the criteria or fails to meet it, I believe that is called non-responsiveness, and you should act accordingly. We typically take those proposals and set them aside, but again, they are not considered anymore, so it's non-responsive.

 

Next question. What is your criteria for initiating a protest? In order to avoid protests, I go out of my way to use contract vehicles, like NASA SEWP, NITAAC, or ARMY CHESS ITES-2S where protests are rare or restricted. What is your feeling about vendors that aggressively initiate protests which have no real merit but are nothing more than very expensive nuances and are strategic to avoid an award to a competitor? Kitty?

 

KK: Protests are difficult. We do not take them lightly. I can tell you that there have been opportunities where we felt a need to protest, and we did not. We weigh the impact on our customer relationship. Generally, a good contractor is going to protest when they honestly believe that there is a reason to protest. We do know some protest because debriefs have been short of information, and that might be the only way a company figures out what happened. 

SG: If there is no merit, find a way to penalize them, honestly, because they are wasting everybody's time.

 

MG: That brings us to the close of this segment and session. I want to thank my guest again, Kitty Klaus, Antwayne Ford, and Stuart Gittelman, for their insight and perpsective. The slide presentation, along with answers to some of the questions we received will be posted to FAI's website in the coming weeks. I am Millisa Gary. Thank you for joining us this afternoon. 

 

JA: That was a rather eye-opening journey on what government procurements are like from an industry perspective. We certainly hope you found today's seminar beneficial as we're sure it gives us all a greater appreciation for what industry must do to bring tools, products, and services to the marketplace and specifically the government marketplace. Don't forget, the Federal Acquisition Institute has recorded today's seminar, and the video, along with the presentation material you saw today, will be posted in the Video Library on FAI.gov. You should be able to access these items in a week or so. On behalf of the Federal Acquisition Institute, thank you once again for joining us.