Column: Teaming changes the Alliant 2 Small Business equation

Small businesses likely will be allowed to form new teams to bid on Alliant 2 Small Business, creating a path for companies that otherwise would have been left out to become players on what may be the largest small business technology services contract of the next decade.

The General Services Administration plans to issue the request for proposals in the second half of June. GSA will pick the 80 strongest bidders to participate in the $15 billion, 10-year contract. Bidders will be scored using a 75,600-point system that rewards prior experience in IT services as well as compliance with accounting requirements, certifications and facility clearances.

It’s likely that GSA will let small businesses pool their prior IT services experience to generate the highest possible score. Companies that meet the small business size standard—$27.5 million in average annual revenue—will probably be allowed to bid both as prime contractors and as first-tier subcontractors.

Teaming is a big change

Teaming is a big change from the most recent draft request for proposals, issued in October. As of that draft, GSA was only going to count a prime bidder’s own points for prior IT service experience, not the experience of any subcontractors. Similarly, only existing joint ventures’ prior IT service experience would count, not the experience of the individual member companies of a joint venture.

Congress stepped in a month later with a provision (Section 867) in the fiscal 2016 National Defense Authorization Act that requires GSA and other agencies to count the experience of small business team members—either joint venture members or subcontractors—in evaluations for contracts including Alliant 2 Small Business. President Obama signed the law in November.

The new law, which was effective immediately, means that the final RFP for Alliant 2 Small Business will likely allow new teams of small businesses to pool their experience, enhance their score and try to make the cut to be one of the 80 bidders selected.

VETS 2

The first major IT services contract the new provision affected is Veterans Enterprise Technology Services 2, or VETS 2, a GSA IT services contract for which bids are due June 6.

Under the VETS 2 RFP, service-disabled veteran-owned small businesses can bid as prime contractors and beef up their bid by counting the relevant experience of small business subcontractors. For existing joint ventures and new joint ventures, individual team members’ relevant experience can be used to generate points.

GSA’s decision to apply the new law to VETS 2 makes it highly likely that teaming also will be allowed on Alliant 2 Small Business.

A prime bidder that on its own wouldn’t generate enough points to break into the top 80 now has a shot by pulling together some other small businesses to serve as subcontractors. Companies that would have been left out entirely because they have only one or two projects that would qualify as relevant experience can now, at least theoretically, seek out prime contractors to bid with as subcontractors.

There may be a catch, however.

In the VETS 2 RFP, GSA set aside 5,000 “organizational risk assessment” points—5% of the 100,000 available—for companies that did not form new teams. (GSA also walled off another 5,000 points for bidders that used service-disabled veteran owned businesses’ projects for at least half of their relevant experience examples.)

These points created a disincentive to form new teams. The strongest prime bidders on VETS 2 likely will decide they are better off bidding on their own since they likely could not generate enough points from new team members to counteract the loss of those risk assessment points. For weaker bidders, the teaming decision is a balancing act in which new team members must produce at least 5,050 points to make the effort even mathematically worthwhile.

There also are paperwork requirements associated with forming teams, so more realistically, new team members would probably need to generate at least 6,000 points so that the prime bidder nets 1,000 points and makes their proposal that much stronger.

Alliant 2

Companies will be doing the same kind of math on Alliant 2 Small Business. We’ll see in the final RFP how many points are tied to risk assessment. Potential new subcontractors will need to generate more points than the risk assessment total to be worthwhile teaming partners.

Existing small business joint ventures may be the biggest beneficiaries of the change, since the law forces GSA to let them count not only the JV’s own experience but also the individual team members’ experience.

My assessment is that some companies will be better off not forming new teams, while for other companies the new teaming rules will be the difference between making the top 80 and being left out of $15 billion in task order competitions.

It’s worth noting that GSA plans to use an on-ramp, possibly at the five-year point of the contract’s lifecycle—to bring on new contractors. Companies that are just too small today and don’t benefit from the teaming change may have another chance to get in on the Alliant 2 action then.

Brian Friel is founder of One Nation Analytics, an independent research, analytics and consulting firm for the federal market. He can be reached at bfriel@onenationllc.com. Read his additional analysis of Alliant 2 here: http://goo.gl/YyX3H1.

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Column: Teaming changes the Alliant 2 Small Business equation

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