Skepticism greets GSA small-biz plan

Small and minority-owned businesses are skeptical about the potential of a new policy announced last week by the General Services Administration to boost their federal information technology business as subcontractors.

The GSA said that it planned to tap small businesses on large contracts, starting with its new $25 billion contract for large-scale IT support services. In April, the Federal Computer Acquisition Center (Fedcac), which is part of GSA's Federal Technology Service, plans to make a maximum of 12 awards under its Millennia contract.

Millennia will include a wide range of IT support focusing on systems integration, software engineering and communications. The five-year contract will replace the high-end requirements from the multiple-award, indefinite-quantity 9600 contract and includes a five-year option.

To push bidders to funnel some of the federal work to small and minority-owned businesses, Fedcac plans to require Millennia bidders to show that they will direct at least 35 percent of their work to small businesses. Within that 35 percent, 10 percent must go to small, disadvantaged businesses and 5 percent to women-owned small businesses.

Fedcac will consider on a pass/fail basis the goals outlined in the bidders' proposals. The bidders' past performance in subcontracting with small businesses will count as 10 percent of the overall technical score in the evaluations, said Lisa Akers, program manager for Millennia.

Fedcac also will designate a full-time employee to monitor and report on the winning contractors' commitment to the goals, and Fedcac plans to tie the five-year option to the vendors' good-faith efforts to meet the goals. "We're very serious about having this kind of commitment on this contract," Akers said.

Fedcac also plans to encourage the use of joint ventures among vendors, allowing small businesses to pool resources so they can compete as primes.

Several vendors that are not convinced the 35 percent requirement will work after having received little business from the 9600 contract have chosen to pool resources. Digicon Corp., a small business, and A&T Systems Inc., a minority-owned business, have formed a joint venture to become a potential prime on Millennia. The companies decided to join forces primarily because of the conditions on the 9600 contract, said Robert Williams, vice president at A&T Systems, a former subcontractor on 9600.

The 9600 contract, awarded in 1995, reached its $840 million ceiling several years ahead of schedule, which forced GSA to develop Millennia and several other contracts to handle the demand. But many subcontractors, including A&T Systems, saw little, if any, of the business, Williams said. Instead, A&T Systems typically did projects with little payoff, he said.

Fedcac wants to avoid such treatment of small businesses with Millennia, according to Fedcac director Ronald Decker. The dedicated monitor and emphasis on partnership with subcontractors are signs of a shift in contracting philosophy, and the goals for the Millennia contract are expected to become the model for FTS' large contracts, Decker said. "We're going to be watching this one closely."

Orkand Corp., another 9600 subcontractor, also is considering becoming a potential prime on Millennia because of "mixed results" on 9600, said Jack Savage, director of corporate development. Orkand is a medium-size business, Savage said, and Fedcac has not set up guidelines for medium-size businesses as it did for small and minority-owned businesses.

"We understand the focus on small business, and we've certainly benefited from it in the past...but as the current system is set up, there is no incentive to provide business to subs," Savage said.

Other potential primes are Booz-Allen & Hamilton Inc., Science Applications International Corp., Raytheon Co., Unisys Corp., Logicon Inc., SRA International Inc., Wang Government Services, DynCorp, Lockheed Martin Corp., Litton/PRC Inc., Computer Sciences Corp., TRW Inc., OAO Corp. and Nichols Research Corp.