The path of least resistance
- By John Moore
- Jan 26, 2003
Ask federal observers what makes the Electronic Commodity Store contracts tick and the response boils down to three words: ease of use.
The National Institutes of Health's procurement vehicle debuted in 1995 as the Electronic Computer Store. Since then, the program's contracting authority, the NIH Information Technology Acquisition and Assessment Center (NITAAC), has acquired a reputation for speed, flexibility and responsiveness. ECS has become a "go-to" vehicle for agencies that want to make quick purchases and avoid bureaucratic fuss.
Indeed, the program has gained quite a federal following. Agency buyers placed orders worth $1.2 billion on ECS II over its five-year life. That's more than three times the first ECS' sales tally of about $370 million. NIH's latest entry, the decade-long Electronic Commodity Store III pact, is envisioned as a $6 billion deal.
To be sure, the federal market has seen numerous high-profile contracts fail to live up to their billing. But if vendor interest in ECS III is any predictor of success, the procurement may well outdo its predecessors. NITAAC received about 90 bids on ECS III, eventually awarding 66 contracts.
"We were sort of surprised at the number of proposals that came in," said Leamon Lee, associate director for administration at NIH. "Someone had to know something about ECS II."
"Everybody wanted a piece of this contract," added an industry executive.
So what exactly has engendered such vendor interest and customer loyalty?
Robert Williams, president of ECS III prime contractor A&T Systems Inc., uses a hydrologic simile: "I think procurement opportunities are like water: They seek their own level."
Customers will flow toward the contract that offers the least resistance, he reasons. "If one organization makes it easy for you to do what you need to do on your own timetable and the other makes you dance to the timetable of the procurement shop, where are you going to go?" Williams asked. "To where life is simple or where life is difficult?"
Vendors can and do provide a push as well, Williams added. "A customer who is going to do business with us...will look for guidance," he said, adding that his company is in a position to recommend the NITAAC program office over others.
"People are going to do business with whatever is easier, quicker and cheaper," said Jack Littley, senior vice president of program and information services at GTSI Corp. "There's an issue with some agencies that want to own their own vehicles, but it is hard to compete with something like ECS III. It's a very flexible, very powerful vehicle."
A key element of that flexibility is the NITAAC program office's ability to add new products to its contracts. Rapid technology refreshment has been a hallmark of the ECS program. "It's easy to get a new product onto the contracts," Littley said.
Williams said ECS' rapid refresh gives it a significant advantage over other vehicles. Most contracts driven by a contract line-item number list "have a tech refresh period...that may come around once every six months or once a year," he said. "Effectively, you can 'tech refresh' the [ECS III] contract every day. Sometimes a new technology that the government wants to take advantage of comes on the market. Being able to get that into the hands of the government quickly will give this contract an advantage over contracts that can't really do that."
Ray Bjorklund, vice president of market intelligence at Federal Sources Inc., cited ECS and NASA's Scientific Engineering Workstation Procurement as among the government's more responsive governmentwide acquisition contracts. "If you are a customer and have a need to get something on the contract, it can be done overnight," he said.
NITAAC's market research effort is
another factor behind its knack for keeping contract vehicles up-to-date. Its Business Management Office for Communication and Outreach is designed to "bridge the gap between the government and its requirements and the...solutions that are being developed from industry," said Elmer Sembly, NITAAC's communications director.
Part of the outreach office's job is tracking agencies' technology needs on a wide front. Security provides one example. Before the Sept. 11, 2001, terrorist attacks, NITAAC "had already begun to identify that there were some security issues we needed to address through federal contracting," Sembly said.
At the tactical level, NITAAC representatives will work alongside prime contractors to help refine customers' requirements. NITAAC's effort in this regard helps the procurement shop stand out from the crowd. "These folks really know how to run a contract, how to help primes and how to get solutions for agencies," said Tom Flynn, director of partners and programs at PlanetGov Inc.
Agencies also recognize NITAAC as a partner. The Army's Small Computer Program last year agreed to treat NITAAC programs such as ECS II as preferred contracts. The memorandum of understanding applies to ECS III as well.
Olga Lawrence, assistant project manager for the program, cited NITAAC for the "ease and flexibility they provide to the customer." NITAAC and the Small Computer Program share contract administration fees and cooperate in other ways. "We do a lot of marketing for them," she said. "We promote their programs and they participate in the Army IT conference we host every year."
NITAAC's outreach also means hosting discussion forums for government and industry. The office's latest effort has taken to the Internet. The NITAAC Hour debuted on Washington, D.C., radio station WTOP's Federal News Radio (www.federalnewsradio.com) earlier this month. The object is to bring together industry and government executives to talk about IT challenges. A recent program featured Vance Hitch, the Justice Department's chief information officer.
Encouraging Small Business
Another NITAAC aim has been to scour the market for emerging technology providers and structure procurements to encourage a wider range of participants.
NITAAC established that model with Image World 2, an NIH contract vehicle originally focused on electronic imaging, and used the same approach with ECS III. "We were trying to [give] smaller companies an opportunity to bring products and niche services to federal customers directly," Sembly said.
With ECS III, Sembly said NITAAC invited such companies to submit proposals based on "their areas of strength, not on a broad, wide-encompassing contract." As a consequence, more than 50 of the 66 prime contractors are classified as small or small, disadvantaged businesses.
Phoenix Systems Corp., a 15-person firm based in Rochester, N.Y., exemplifies the small-business-as-prime approach. The company, which specializes in fields such as wireless security and facial recognition, captured an ECS III prime contract and envisions generating about $5 million in the contract's first year.
"Had we not restructured the criteria the way we did, it is unlikely a company with 15 people could be a prime on a $6 billion contract," said NITAAC's Lee.
Lawrence of the Army Small Computer Program said one appeal of the
NITAAC pacts is the presence of smaller, niche companies. Those firms offer technologies that supplement what the Army contracts offer.
"One of the things the contracting office has done well is extending the selection to a number of small businesses and OEMs," said Mike Bruemmer, director of sales for the civilian government at Dell Computer Corp. "You are not locked into one option."
With ECS III, "I'd say it's all about choice," Bruemmer added.
Moore is a freelance writer based in Syracuse, N.Y.
Electronic Commodity Store III
(National Institutes of Health)
Core offering: Wide range of information technology products and services; homeland security orientation.
Prime contractors: 66
Surcharge: 1 percent
Volume: ECS II had $1.2 billion in business (1997-2002).
Scientific and Engineering Workstation Procurement III (NASA)
Core offering: Unix, Linux, Windows workstations and
Prime contractors: 22
Surcharge: 0.65 percent (0.6 percent effective Feb. 1)
Volume: SEWP II had $1.5 billion in business (1997-2002).
General Services Administration schedule
Core offering: Wide range of IT products and services
including telecom services.
Prime contractors: Thousands.
Surcharge: 1 percent (0.75 percent effective Jan. 31, 2004).
Volume: $10.85 billion in fiscal 2001 (IT schedule).