Small-business program compiles solid track record

As the first governmentwide information technology

services contract aimed specifically at small businesses, the Commerce Information Technology Solutions (COMMITS) program hefted a lot of baggage and many hopes when it launched four years ago.

With the government's use of small businesses on the decline at the time, the failure of COMMITS would have further confirmed the attitude that small companies could not perform the work needed by most agencies.

The launch of COMMITS stalled for a year because of a protest by vendors who were left off the initial award. After a new round of vendor awards was made in 2000, however, COMMITS took off and is now considered a bona fide success.

COMMITS has raised the profile of small businesses among many previously skeptical government users.

It's certainly not the whole answer to the problems of small business. The government is still shy of its goal of awarding 23 percent of

its procurements to small businesses, according to a recent report from the Democratic members

of the House Small Business

Committee.

COMMITS has not been immune to criticism. There have been grumbles about the size of some of the more recent procurements, with claims that small businesses could be shut out from work when

COMMITS' vendors receive large awards even if they no longer qualify as small.

Besides those objections, however, there's little argument that COMMITS has exceeded expectations. Expected to last five years, the $1.5 billion contract is already close to its ceiling, and the Commerce Department recently published a solicitation for a new contract called COMMITS NexGen.

"I quite frankly didn't think it would fill its first

$1 billion," said Rodney Hunt, co-founder, president and chief executive officer of RS Information Systems Inc. (RSIS), which tops the COMMITS contract with more than $500 million in total orders.

The COMMITS program office has worked to market itself as a business, Hunt said. It partners well with vendors, he said, and has a good reputation for working with them and agencies to monitor small businesses' use of the program.

Hunt said that's probably the main reason that COMMITS has fared so well outside Commerce, whose agencies are required to consider it for their procurement needs.

In fiscal 2002, Commerce had $263 million of

procurements contracts placed through COMMITS.

At the same time, the Energy Department had

$502 million on the program and the Defense

Department had $205 million.

The Agriculture Department, the Environmental Protection Agency, the State Department, the Smithsonian and the General Services Administration also had varying amounts posted to COMMITS

procurements.

"I thought that for [RSIS] going in that COMMITS would give us an introduction into [the National Oceanic and Atmospheric Administration] and the [National] Weather Service, and then perhaps some of the other Commerce agencies," Hunt said. "I never in my wildest dreams thought it would become that big outside of Commerce."

A similarly enthusiastic appraisal came from Bill Eggers, chief information officer for the Army's Installation Management Agency. He was CIO of the Army Test and Evaluation Command (ATEC) when that organization awarded a seven-year, $53 million task order from COMMITS for IT support services.

The award, made in August 2002, went to STG Inc. A small business had been providing IT support for a number of years before the STG award, "but with less than satisfactory results," Eggers said. The experience made him wary of giving the job to another small business that couldn't handle the demands of ATEC work.

"The small business that had the contract before STG was not able to get to the forefront quickly with the kind of solutions that our requirements demanded," Eggers said.

Circumstances pushed him toward use of a governmentwide acquisition contract, however, because ATEC was under time pressure to make the award, and he didn't want to take the time to go through a full-blown competition. Contracting vehicles such as COMMITS can go through the procurement process from solicitation to the beginning of work in 60 to 90 days, in contrast to the six months or more it could take with fair-and-open procurements.

COMMITS was attractive because it also would help fulfill ATEC's small-business contracting requirements, Eggers said.

After talking to officials at the COMMITS program office, he realized there were some small businesses on the vendor list that were of significant size and that had extensive performance credentials as small businesses. Those facts helped allay some of his concerns about the capabilities of COMMITS' vendors.

"The experience with COMMITS was wonderful. The process was very smooth," Eggers said.

Program Criticisms

Not all the views about COMMITS are so positive. Jerry Eatherly, executive vice president of Technology Concepts and Design Inc. said he thinks it's been a mixed blessing.

When COMMITS first started, program staff talked about hosting events such as contractor fairs and helping business like TCDI with marketing, the traditional bane of small businesses, Eatherly said. But those benefits haven't happened, and TCDI had to go after its own work, which worked out well in the end,

he said.

Eatherly's primary complaint has more to do with the size of some of the procurements made through COMMITS. In particular, DOE's decision in January to award a $409 million mission-critical support services task to RSIS sparked controversy throughout the small business community.

"We weren't expecting COMMITS to make awards of a half-a-billion dollars at a time," Eatherly said. "We got awards of $15 million and $8 million, and for us those are sizable chunks of business. That's more of what we were looking for" from COMMITS.

Hunt said that his company's win of the DOE deal is a good sign because it shows that agencies are more comfortable handing off complex projects to small businesses. The size definition of a small business has changed since COMMITS began,

he said.

To qualify for COMMITS, vendors had to average no more than

$18 million in annual revenues for the three years prior to the 1999 launch date of the contract. But RSIS is now close to $200 million in revenue, and several other vendors are also above the size limit, raising fears that most of the dollars on

COMMITS and NexGen could go to these not-so-small small businesses.

That's at least one of the reasons that prompted a proposal by the Office of Federal Procurement Policy earlier this year to require agencies to recertify companies for small-business contracts each year.

COMMITS NexGen will feature several dollar and employee size tiers, and companies in the top tier will not be able to compete for contracts aimed at smaller companies. RSIS officials plan to compete for a spot on NexGen, because their current employee head count of 1,400 falls below the new contract's top-tier ceiling of 1,500 employees.

Agency Benefits

Within Commerce, COMMITS seems to have raised the profile of small businesses. The National Weather Service has used COMMITS quite a bit, said Sharon Leigh, director of its acquisition management division, particularly for support on development and deployment of Doppler radar systems.

Users within Commerce were a little tentative at first about employing small businesses, she said, but after the first award, the word spread.

Leigh is less interested in

COMMITS' targeting of small business or use of streamlined procurement procedures. She would be equally likely to use the GSA schedules for the same reasons, she said, though that would require NWS to do its own advertising and contractor searches.

It's more the little things that count, Leigh said. For example, it's easy to conduct COMMITS procurements over the Internet, which has been a time-saver, she said.

COMMITS emphasizes the use of performance-based contracting, in which contractors are paid based on meeting predefined goals.

"We've been pushing for this in the contracting community for some time, so the fact that COMMITS is required to use performance-based contracting is a big plus," Leigh said.

Tina Burnette, COMMITS' acting program manager, thinks the vehicle has proven itself. Despite a rocky first year when the COMMITS program office couldn't issue any task orders, the contract met its ceiling early, she pointed out, and agencies that used COMMITS kept returning to it.

One issue of concern, though, has been staff turnover in the program office. Both agency users and vendors consistently attribute the program's success to the quality and professionalism of the staff at the COMMITS program office and worry about losing that expertise.

It's a valid concern, Burnette said, especially because the COMMITS program office can only hire people based on the fees generated by the business it does. Higher fee income will mean having better control over hiring, she said, even though finding qualified people is a problem for every government agency.

According to Linda Williams, associate administrator for government contracting at the Small Business Administration, the cuts in the government procurement workforce mean agencies are looking to increase the use of purchasing vehicles that are already in place rather than generating their own.

And there's only so much of a commitment large contracts, such as the Information Technology Omnibus Procurement, can make to small businesses.

COMMITS could, therefore, prove an even bigger boon to small businesses. If they can't attach themselves to existing contracting vehicles such as COMMITS, then in the future "they just might not get deals," Williams said. l

Robinson is a freelance journalist based in Portland, Ore. He can be reached at hullite@mindspring.com.

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