By Steve Kelman

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Smaller task orders on IDIQ services contracts?

A vendor manager at a big IT firm mentioned to me recently that their firm has been seeing a definite move over the past year or two to smaller task orders on IT contracts.

This appears to be occurring for a number of reasons, some not directly related to whether the work gets done better, worse, or the same as when acquired through large task orders. In some cases, funding delays leave an agency of whether it has the funds for a larger task order. In other cases, there’s a desire to keep a task order "under the radar screen" -- below the threshold that triggers a review at headquarters or opens the door for task order protests ($10 million or more).

Third, smaller task orders are being driven by the increased emphasis on contracting with small businesses. I am inclined to think that on the whole this is a good thing: When it comes to services, small business sometimes has a legitimate argument that "contract bundling" can raise prices and hurt customer service. It’s less the case with commercial hardware and software, when government can leverage its buying power.

The most interesting question for me -- from a perspective of how successful will the government be in achieving good results from service contracting in general and IT service contracting in particular -- is the relationship between smaller task orders and the idea of modularizing -- that is taking a more incremental approach to developing IT systems. For a long time, people have been arguing that we need to build IT systems in chunks. The idea is to field a capability quickly and then expand or further develop it over time, rather than spend forever trying to develop the perfect system, which given how technology evolves, becomes a moving and ever-receding target.

To the extent that the move towards smaller task orders reflects an actual change in contracting strategy, this is good news. But we need to make sure that the rules are flexible enough at least to allow the possibility (but not require) of logical follow-on contracts being awarded to a well-performing vendor doing the first chunk. And I would hope that agencies doing smaller task orders for other reasons would make a virtue of necessity and use this as an opportunity to modularize their contracting approach.

Can we get a dialogue going on this? What are agencies doing? What are vendors seeing? Good news out there? Bad news?

PS: This blog seems to have gotten a lot of new readers recently. Aside from warmly welcoming new readers, I would also like to note that it is my ambition -- I will not claim it is always realized, but I try -- to post twice a week, on Tuesdays and Thursdays. So those are the days to look out for posts! Again, welcome to new readers.

Posted on Apr 13, 2010 at 12:08 PM


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