Steve Kelman checks in with another non-traditional IT contractor, and explores what attracted them to the market.
I was in touch recently with my old friend Dan Levenson, the long-time Department of Health and Human Services contracting officer who went through the revolving door -- not into a traditional big government contractor but to become CEO of the non-traditional tech startup Agile 6. I wanted to find out whether there had been any new entrants in the last year or so into the non-traditional contractor space.
Levenson kindly reminded me that with the pandemic he hasn’t been out and about meeting new folks so much. But just before the pandemic the Digital Services Coalition, the advocacy group for non-traditional contractors that he now heads, had for the first time since the group started invited a number of companies to join the original cohort. One of them was Kind Systems -- a firm Levenson said did a larger proportion of their business with commercial firms than any member of the group.
Levenson introduced me to John Phamvan, the CEO of the firm, which now has 11 employees. Phamvan had worked for several small dotcom startups over time, starting in college. He gradually moved into team lead positions; one of them did the digital work for Hot Rodder magazine. “But I've always stayed fairly technical and have not gone too long without writing code,” he said.
“An important reason for me to go into startups was that they offered me a chance to change the world,” Phamvan said. While he was in the startup world, he and some colleagues established a Slack channel called “kind engineers” to distinguish themselves as people who were “not doormats, but courteous and respectful.” He worried that the bro culture of startups “is not a particularly good way of building sustainable products or companies, since startups often treat their employees and teams as expendable.”
Phamvan got exposed to government contracting through a friend he had worked with at earlier startups who was doing a stint at the U.S. Digital Service and who urged him to consider bringing startup skills into the government by doing some work as a government contractor. This friend introduced Phamvan to the leadership of Agile 6, the non-traditional startup that also had formed the Digital Services Coalition as an advocacy group for non-traditional contractors. The Agile 6 people mentored him, answered a lot of his questions, and gave him opportunities to bid for government work under BPAs they held, especially working on design challenges, the new procurement technique where vendors prepare prototypes rather than lengthy proposals.
It took Phamvan two years to get his first paying government work. His major government job right now is participating in Medicare modernization, alongside his commercial work. He is also proud of work the company has done for the Smithsonian. “We have gotten to bring our toolbox to a storied institution,” he said. Being able “to take my technical and product toolbox and apply them to make social impact appealed to me.” Some of those working for Kind Systems started out on the “kind engineers” Slack channel and he persuaded them to join the company from the startups where they had been.
Phamvan still looks fondly on his startup work. “It can lead to some really good outcomes and can be really fun.” By contrast, “government contracting is slow and steady, but ultimately, one knows that you're doing this work for the people and often for the most vulnerable people.”
“I had a bad preconceived stereotype about government employees,” he said. “But with my own eyes I see that everyone is trying to do their best and improve. But government needs to have better processes.”
Kind System’s business is now about half commercial and half federal. But the commercial business has pivoted in a government direction -- working on apps for regulatory compliance, for example.
More than some of the others from non-traditional contractors I have spoken with over time, Phamvan spoke more about the ability of government contracting work to support his family. He told me that “government business is starting to look more sustainable economically thanks to different funding vehicles with higher ceilings and higher rates comparable to commercial rates, depending on the BPA.”
It is perhaps a sign of the evolution of this space that more “normal” people and not just heroes will consider it.