Q&A Part 2: Topics in the news
Recently, Bob Lohfeld, CEO, Lohfeld Consulting Group and Bill Gormley, President and Managing Partner, The Gormley Group discussed various challenges faced by BD, capture, and proposal professionals supporting Federal Government contractors.
Read the Q&A, watch the webcast, or listen to the podcast to find out how to help your company work smarter and reinvent what you’re doing to remain competitive in today’s GovCon market.
Question: Talk about the new DoD procurement reform document. What are the key things that we need to know?
Bill: So Bob, I think you did a recent digest of Claire Grady’s April 26 memo/directive out there to DoD on source selection.
Bob: I did, and that sort of narrows down the topic a bit. So the topic is DoD procurement reform, and reform is something we see at about a 10-year cycle across DoD. Every 10 years going back 40 years, someone is screaming, “We need to reform DoD procurement. Throw out the FAR and start all over.” And these play through like a bad summer squall and then dissipate back to where people realize that the FAR is really good. What Claire Grady did (who works for Frank Kendall in Acquisition Technology and Logistics and basically is responsible for DoD policy) is restate a lot of their doctrine in source selection and add to it. One of the new things that we’re seeing in DoD source selection is Value Adjusted Total Evaluation Price (VATEP). In a best value sense, instead of leaving it to the bidder’s discretion to figure out how you exceed a requirement in a contract, what they’re doing is telling you if you can exceed it, it’s worth a certain credit to you in the price evaluation and they’re monetizing the benefits now. We’re seeing that come out in procurements where the requirements are easily measurable—like speed of a vehicle or less-measurable survivability in the defense sense. But where they can measure that performance requirement, if you can exceed it, they will tell you that’s worth so many millions of dollars and it lets you as a bidder do a tradeoff. Do you want to exceed it or do you just want to meet the objective level?
Bill: I think in regard to that and your earlier point about the FAR, when people can stand aside and actually look at the FAR and read it (it’s not something you want to read every day possibly), there’s a lot of opportunity for judgement and decision making by the contracting officers. I think in some cases the government, while having good intentions to provide examples of how to conduct procurements, I think things have gotten overprescribed and hopefully Claire’s April memo starts to stress the need for judgement in the contracting area. We indicated earlier that taxpayer dollars are associated there, so there’s oversight and sometimes from an oversight perspective you can’t do enough to have a rigid procurement so there’s absolutely a level playing ground. So it’s a balance, a continuous process here.
Bob: The comment about the FAR—don’t read it like it’s a novel. Read it in short segments. I was probably 20 years into business before I opened up the FAR and just started reading it, and it explained a lot of what I heard as urban legend, and it debunked a lot of what I had been told. It was a new day after reading the FAR and understanding what the government’s doing. And it’s shorter than the rules of golf, so have at it!
Question: What is the future of LPTA—lowest price technically acceptable?
Bill: I think in Bob’s digest of Claire’s memo, it talked about Frank Kendall and his Better Buying initiatives over the past couple of years when—and again this is where it becomes overprescribed—there was a mention of LPTA in Better Buying and it just took off like a prairie fire of, “Now we have to do LPTA.” But, I think even Congress has gotten wind and has chimed in with, “Let’s pull back from the emphasis on LPTA and try to get a balance back on best value and keep best value in procurements.” Because at the end of the day, it’s actually in the FAR—pricing is fair and reasonable. That’s the bottom line—if the contracting officer can reach that conclusion and have all the technical requirements aligned with what the requirements are, it’s pricing is fair and reasonable. So the LPTA pendulum has swayed way too far, and it’s actually heading back to kind of where it should be. There’s going to be a place for LPTA in some procurements—identical items or something like that—but people would still argue that even for identical products there are different delivery times and other measurements that could also play into making a final decision for award.
Bob: The great thing about Claire Grady’s memo is that it really defines the criteria and really restates the criteria from the earlier DoD directive as to when LPTA is appropriate. In the services market, it’s generally not appropriate unless it’s some level of commodity services. What we’re seeing now in the market, the last vestige of LPTA on a major procurement, was DISA’s Encore and before the procurement closed and proposals were submitted, they received two protests, and I was delighted to see them. They challenged the evaluation criteria and said, “This is just inappropriate.” You can see the pendulum swinging now, and it’s swinging substantially because some of the legislation working through for the 2017 Defense Authorization Act is proposing that contracts be awarded without price at the vehicle level and leave price to be a shootout at the task order—that having pricing done at a large GWAC or multiple award contract level is really irrelevant.
Bill: And that really ties in the commercial practices. Where do we go anywhere and say, “How much are you going to charge me for X?” They’re going to say, “Well, how much are you going to buy?” So you can’t just go ahead and try to get the best deal without coming up with some kind of requirement to align with it.
Question: Do you think the self-evaluation methodology used by GSA OASIS and Alliant 2 is the wave of the future for government acquisition strategy to avoid bid protests like NETCENTS, etc.? What are the potential negative features of self-evaluation methodology and impacts on industry (small, mid, and large businesses)?
Bob: I’m opposed to the self-evaluation methodology because to me the government sets up an attributes model and says, “Here’s what we’re looking for in terms of a company—all these different credentials” and then you measure yourself against that standard, which is to me like driving a car looking in the rearview mirror. It’s all about what you’ve done in the past and not one thing about what you can do in the future—your innovation, your creativity, your insight, your knowledge, your new technology. All of this is left behind in this criteria. And it closes out all of the upcoming, upstart companies. It closes out companies that are envisioning creativity and leading their market and leaves it to those who have a long pedigree—an insiders club. The old guard club stands very well in the self-evaluation and the others don’t.
Bill: So I guess what I hear you saying, Bob, is that when the government sets up a potential template and you just fill and check all the boxes and say, “I have the experience. I can self-certify” without really getting behind who a company is and what they have to offer, so there are other qualities and other attributes in there regarding the technical side.
Bob: For sure there is, and I always like the idea of evaluating companies on their technical approach, their management approach, and how they’re going to do the work—not about their pedigree and about what they’ve done in years gone by.
Question: What’s your outlook for Category Management, which has been identified by the House Small Business Committee as having a negative impact on the small business federal contracting community?
Bill: Category management is a commercial practice. I think we can all agree to that, but not on this scale. And so, understanding the administration is interested in the categories that they’ve broken out, they have a head for each category now, and that’s part of the objective of where OFPP or the administration wants to take category management I think is understood. I think how to get there is yet to be determined. There are a lot of trees that need to be removed to get some kind of a trail here because one of the problems is that the government in moving forward on category management doesn’t have “spend” data. And it’s not just spend data at an umbrella level, it’s really getting down to the spend data by product and specific labor categories and the fact that they don’t have the historical data in trying to do category management I think has been a challenge so far.
Bob: I think category management has good and bad in it. The good is that I think it’s great for government agencies and different agencies to get together and compare notes about how they procure and lessons learned—that makes everybody stronger. When it devolves into this strategy of “Let’s use existing contracts and push all our business to those,” then it shuts out a huge segment of the market. In the long run, it’s the old boys club prevails and everybody else can go home.
Bill: So I guess the innovation side is the concern because I know there were configurations for laptops and so forth, and there was a lot of discussion about that.
Bob: And the laptop argument was, “There are three contracts in place. You can choose any of the three, and across the three there are hundreds of companies that are contract holders.” So if you’re one of the fortunate ones you can play, and if you’re not, then you go and ask to be a subcontractor somewhere else and hope you get a piece. But you can never grow up and be a prime.
Read Part 3 of the Q&A in the next blog post.
Listen to the podcast on your PC (MP3):
During the webinar, Bob referenced a number of articles to assist government contractors:
- 7 questions to answer when making bid/no-bid decisions (improve your win rates)
- Win rates double with seven quality measures – updated (Lohfeld seven quality measures)
- DoD revamps source selection process
- DoD releases new Source Selection Procedures
Bob Lohfeld serves as CEO and general manager of Lohfeld Consulting Group. He has more than 30 years’ experience winning contracts in the government market and is recognized consistently for leadership in business development, capture management, and winning proposals development. He teaches Capture Management, and he writes the Capture Management column in Washington Technology.
Prior to forming Lohfeld Consulting Group, Bob served as Division President at Lockheed Martin, Vice President of Lockheed Martin Information Technology, Senior Vice President at OAO Corp., Systems Engineering Manager at Computer Sciences Corp. (CSC), and Program Manager at Fairchild Industries. He also taught at the graduate level at George Washington University School of Engineering Administration.
Bob has served on the Board of Directors for the Association of Proposal Management Professionals (APMP) and Association of Proposal Management Professional National Capital Area Chapter (APMP-NCA), as Chairman of the American Council on Technology Industry Advisory Council (ACT/IAC), Vice Chairman of the Technology Council of Maryland (TCM), and Board Member of the Armed Forces Communications and Electronics Association (AFCEA), Government Electronics and Information Association (GEIA), and Juvenile Diabetes Research Foundation (JDRF Capital Region). He is a three-time winner of Federal Computer Week’s Federal 100.
Bill Gormley, President and Managing Partner, The Gormley Group
Bill Gormley is a 40-year veteran of government procurement. He spent 28 years at the GSA in positions ranging from procurement agent to Senior Executive (SES) Assistant Commissioner for the Office of Acquisition. He was responsible for acquisition policy and all contracting operations, which included the Federal Supply Schedules Program. Bill’s extensive experience re-engineering the GSA Multiple Award Schedules Program earned him recognition by both government and industry. While serving as Assistant Commissioner for the Office of Acquisition at GSA, Bill received both the Presidential Rank Award for Meritorious Executives and the Vice President’s “Hammer Award” for changes to the Federal Supply Schedules Program. He was twice named to the Federal Computer Week Federal 100 awards—a prestigious group nominated by their peers for outstanding contributions to industry and government.
Bill left GSA to become President of the Washington Management Group (WMG). Shortly after joining WMG he purchased FedSources, a leading market intelligence firm for federal spending, and spent the next 11 years running both companies as President and CEO until both were acquired in 2011 by Deltek, Inc.
In addition to Bill’s role as President and Managing Partner of The Gormley Group, Bill serves as Chairman of The Coalition for Government Procurement and Vice Chair of the Procurement Roundtable. He is a lifetime member of the National Institute for Government Purchasing (NIGP). Bill has contributed to the publication of two books related to the GSA Schedules Program and is recognized for his GSA Schedules domain expertise.
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by Bob Lohfeld
contributors Edited by Beth Wingate
Did you know that contracting officers spend up to 20% of their time mitigating disputes between teaming partners? In an informal poll we conducted on LinkedIn last month, 40% of respondents classified their teaming partners as “frenemies” on their last bid.
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