Indefinite Delivery Indefinite Quantity contracts do not guarantee your company any sales. That point was driven home last week when GSA leaders announced that they are postponing the deadline by which agencies much transition from existing telecommunications contracts to the new EIS vehicle for three years. Contractors and others may be forgiven if they now believe that EIS stands for “Eternally In Suspension”. Two legacy telecomm contracts, Networx and WITS, are being extended to meet current agency needs. The move was expected, though GSA leaders were denying that it would come as recently as 2 months ago.
Contractors who “won” an EIS award must be wondering what they’ve really gained. First, many spent well over a million dollars just to prepare for and bid on EIS. Years of industry meetings with GSA officials took time as well. Awardees have continued to incur costs for over the past year to bring billing and other systems into compliance in order to obtain an Authority to Operate (ATO). That’s a lot of upfront investment for GSA to require with no expectation that these costs will be offset by EIS revenue any time soon.
These challenges are similar to those in pretty much every large IDIQ contract scenario. Designing, bidding, and prepping for business under such contracts often takes years and a substantial monetary investment. The pay-off for other vehicles, like GSA’s Alliant and OASIS, is that once the contract is up and running, business flows much more quickly.
That’s not been the case with the agency’s telecomm contracts, though, and it is an open question as to whether this contract approach continues to make sense for such solutions. Experience with Networx certainly showed GSA, and anyone else who was watching, that the model might have been outmoded then. It took years for agencies to transition to Networx and it will now take years for them to transition from Networx. So much for “agile acquisition”.
Large EIS prime contractors may take some comfort in the delay because many are Networx primes. What about the smaller and medium-sized businesses, though, who aren’t represented on Networx and have been expecting EIS revenue to start flowing in the coming months? Some are absolutely counting on this money to stay afloat. GSA’s decision means that they may sink instead.
There’s a strong case to be made that large, stand-alone telecomm contracts are increasingly anachronistic. The lines between “telecomm” and “tech” are blurry, if they continue to exist at all. Moving forward, GSA leaders should consider an acquisition strategy that many of their customers already have: Tear down large stand-alone contracts and run your acquisition through the GSA Multiple Award Schedule program. It’s agile, comprehensive, can be used today, and is very small business friendly.