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Contract vehicles: Money transportation in government contracting

Due to the "full and open competition law," any government buyer of a service or product is required to write an RFP and release it to the general public. Here's how to get around the delays this can cause.

The Federal Office Systems Exposition (FOSE) took place in Washington, D.C., the first week of April this year. It attracted 400+ exhibitors and most of the federal buyers and spenders. Every exhibitor was trying to get those buyers and spenders to buy its product.

Due to the “full and open competition law,” however, any buyer is required to write an RFP and release it to the general public on the FedBizOpps Web site for all to bid on. Then the buyer must fairly evaluate the proposals and award the contract based on best value. This can make the buying process a long and cumbersome one, but there are ways to get around it legally.

Let’s say a senior USDA decision maker who is interested in the Microsoft intranet product, SharePoint, visits the Microsoft booth. He's seen the other products and decides he likes this product and wants to buy it. The process required by law will take three to six months. Then IBM and Lotus and others will see the RFP, bid on it, and may win in a fair and impartial selection process.

Under this scenario, Microsoft could get nothing after doing all the preliminary work to convince the USDA manager to buy an intranet product. This also does not satisfy the decision maker at the USDA who specifically wanted SharePoint. How does he make sure he gets the product he wanted?

In fact, why would the FOSE attract so many exhibitors if all the purchases by all the government buyers had to be put in FedBizOpps and go through “full and open competition”? Why waste time trying to sell the government buyers on the virtues of any specific product? Why not just wait and bid when the RFP comes out on FedBizOpps?

What actually happens
The answer is that all the beltway bandits (sellers to the government who work and live in or near Washington, D.C.) and many of the government buyers know that there are ways of getting around the requirement for “full and open competition.” There’s a fast, low-risk way to enter into a contract and get paid.

If you’re the “prime” contractor, you are the one that directly bills the government for your work and that of your subcontractors. One aspect of being a prime that the subcontractors don’t have to worry about is a “contract vehicle”—the legal form of the agreement and administration procedure that is used to get the money from the government client to you. Contract vehicles come in various forms and each has a long list of pros and cons. What you need is the ability to use any one of several vehicles to support your government business development.

It would take a very large treatise to go into the details of all the types and aspects of these contract vehicles. There are just too many variables and conditions on how they apply, when they can be used, and what their limitations and advantages are. Below is an incomplete list of some of the more popular or commonly used contract vehicles, tools, and mechanisms:
  • GSA Schedule: General Services Administration’s Vendor Boutique
  • Government-Wide Acquisition Contract (GWAC) ($2.4 billion in 2001)
  • Multiple Award Schedule (MAS): Theme-based award to thousands of vendors
  • Omnibus Support Services Contracts
  • Simplified Acquisition Procedures (SAP)
  • Indefinite Delivery Indefinite Quantity (IDIQ)
  • Time And Materials (T&M)
  • Blanket Purchase Agreement (BPA)
  • Basic Agency Announcement (BAA)
  • Small Business Innovation Research (SBIR)
  • SBA: Set Asides, Hub Zones
  • Small and Disadvantaged Businesses: 8A, Disabled, Veterans, Minorities, Woman-owned
  • Purchase Orders
  • Smart Access Common ID Contract
  • Request for Proposal (RFP), sometimes called “formal competition”
  • Request for Quote (RFQ)
  • Invitation to Bid (IFB)
  • Sole Source

Other contract types and variations exist, too; for instance, RFPs can announce contracts that are Firm Fixed Price (FFP), Cost Plus Incentive Fee (CPIF), Cost Plus Award Fee (CPAF), Delivery Order contracts, and others. There are also mixes of these methods, for instance, a GWAC that is a multiple-award IDIQ, task order contract with SBA Set Asides.

Finding contract vehicles to use
You can use government Web sites to research these and see whether you qualify or whether they suit your needs. Use firstgov.gov and gsa.gov for your first searches. For the Department of Defense, try the Acquisition Knowledge Sharing System and the AcqWeb site. Look at the Links Library at each of these sites for other sites that can help you.

When you have access to a few different kinds of contract vehicles, you can go to a potential client and say, “I can do the work and I have a method for you to get the funds to me without going through the delay and expense of a full and open competition." Your only requirement then is to show the client that you can do the job.

Of course, the insiders also know how to “adjust and expedite” their government business development efforts. For instance, suppose a smart government Project Officer wants to buy some Dell computers to help him with a specific office expansion. Current regulations make it very difficult or impossible to make a purchase like this. What he might do is issue a Purchase Order (PO) to Dell for “services” under a GWAC of IT services to obtain “an automated project management capability.” Somewhere in the PO, he will use a line like this:

“The above-listed project management capability will be delivered including any required resources that are secondary to the delivery of primary services.”

Neither Dell nor the Project Officer mentions the fact that computers are going to be purchased. The Contracting Officer and the Contract Releasing Authority Office will find no fault with this acquisition and it will be approved. The “automated project management capability” in the form of 10 Dell computers (for under $25,000) will be delivered to the Project Officer, and he will sign off on the invoice, allowing Dell to bill the government for the delivery of an “automated project management capability.” It’s all legal and it's done all the time.

Any successful prime contractor will have expertise in several of these contract vehicles. That’s how Microsoft would deliver its product to the USDA without going to the risk and cost of bidding on a “full and open competition” RFP. And that’s why the FOSE is the largest trade show in the United States based on sales volume.

The author of this article is Tom Watkins, director of Government Systems at Management Technology Consulting, Inc. See its Web site at http://www.mtccouncil.com/.

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