A new way to get a good deal

Justice is the latest agency to compete for its own work

Performance Work Statement

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The Justice Department is looking for a new way to save money by creating a team of government and industry partners to bid on the department’s contract proposals.

Following the lead of several other agencies, Justice is the latest department to throw its hat into the Office of Management and Budget’s Circular A-76 ring, which governs competitive sourcing. Justice has created a new team of federal employees called the Justice Award Winning Solutions (JAWS).

The team wants to win a contract to provide services that support parts of the department’s Office of the Chief Information Officer, according to a request for information.

Designated a most efficient organization by OMB, JAWS wants help developing a proposal to provide infrastructure, operational and security support services for parts of the office’s Operations Services Staff based on requirements outlined in a draft performance work statement.

Interested parties have until March 20 to submit their written responses.

Justice is following the Energy Department’s lead in using A-76 to create a public/private team to win a federal contract. In July 2005, DOE became the first to use such a partnership to win a competitive sourcing deal in which vendors compete against a federal team to deliver the most cost-effective deal.

“From our perspective, this has worked very well,” said Larry Allen, executive vice president of the Coalition for Government Procurement. “People have concerns about contractors working side by side with government workers. If you are going to conduct business today, that is the model you will see.”

Competitive sourcing has been around since the 1970s, but only since OMB revised Circular A-76 in 2003 have departments decided to take a serious look at how to save money using the plan.

It appears to be working, said Alan Chvotkin, senior vice president of the Professional Services Council. “Those numbers change when the dollar value of the opportunity goes up,” he said. But “when you are competing function to function, body to body, small numbers, little competition, overwhelmingly the government wins.”

Trey Hodgkins, director of defense programs at the Information Technology Association of America, said A-76 competitions in the past were bad for business because most of the contracts were won by in-house federal teams.

“From the industry’s perspective, it was becoming a disappointing situation,” Hodgkins said. “The reality has become that the risks far outweighed the assurances [that] you could win a contract.”

But now that an agency’s in-house team can partner with a contractor, the outcome has been different.

“The feedback is that everyone likes the arrangement,” Hodgkins said.

A-76 in motion

Federal agencies are experimenting with a procurement plan that appears ready to be launched governmentwide.

With the blessing of the Office of Management and Budget, agencies are starting to develop their own teams to compete against contractors to determine who can offer the best deal at the lowest price.

This kind of contracting has been around for some time. In some cases, government employees and contractors work together on a project. In others, the government team wins the contract hands down.

Some recent A-76 competitions:

  • The Energy Department identified some suitable job functions for managing information technology services for such a competition. As a result, agency employees formed an alliance with RS Information Systems, 1 Source Consulting and some smaller firms, collectively called Energy Enterprise Solutions.

  • Office of Personnel Management employees have won 14 of 16 competitions since fiscal 2003 without partnering with the private sector, OPM officials said.

Meanwhile, a few new bumps have appeared on the road. A provision in the final version of a fiscal 2006 spending bill would limit agencies’ ability to hire private-sector firms to take over work previously performed by agency employees.

Under the new provisions, contractors competing for such work must show that they can do the job at a savings of at least 10 percent or $10 million, whichever is the lower amount. Industry officials argue that the rule is a step backward in the plan to convert the federal procurement process into a businesslike operation.

— Judi Hasson

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