The End of the GWAC Era?

On June 24th, Ed O’Hare, assistant commissioner of the Office of Integrated Technology Services as the GSA’s Federal Acquisition Service announced that Alliant and Alliant Small Business were the only Government Wide Acquisition Contracts (GWACs) that GSA would continue to support. Very likely Mr. O’Hare was talking out of school. GSA has been trying desperately to un-ring that bell ever since.

But, whether GSA wants to admit it or not, Mr. O’Hare was probably forecasting the future of the GWACs very accurately.

I’ve read all the comments to Nick Wakeman’s article and most of the readers are right about how widespread GWAC programs are, how it’s not just about GSA, how fewer GWACs is not a recent trend, why GWACs came to be in the first place and how the demand is still there. And, the comments are all right except one. There may no longer be much, if any, demand for GWACs in today’s acquisition environment.

Oh, there are still requirements that could best be procured via a GWAC order. And, there are still GWACs scattered around Government that could be used. But, is there anyone still willing to use them?

GWACs took a really body shot when Congress put the provision in last year’s authorization bill requiring competition among all contract holders for every GWAC order. The ability to direct an order to a favored vendor was one of the primary advantages of a GWAC as a procurement mechanism. At the very least, the competition could be limited to a few vendors. No more. Now everyone gets a shot every time. Very time consuming. Very risky from the point of view of the program manager.

Strike one!

The second blow came when Congress made delivery orders subject to protest. There went the other major advantage of a GWAC order. They used to be protest proof, but no more. That means still more risk for the program. Might just make more sense to run the competition within the agency. At least the program manager could exert some control over the process.

Strike two!

The final blow came as a direct result of one of the first delivery order protests, the Delex decision. In the Delex decision, GAO held that the FAR “Rule of Two” regarding mandatory set-asides did, indeed, apply to delivery orders and not just contracts. Another little discussed finding from the same decision held that multiple contracts held by small or small disadvantaged businesses under a GWAC program created a presumption of compliance with the “two or more qualified respondents” requirement of the Rule of Two.

Now a program manager considering a GWAC for an acquisition needs to understand that it will almost certainly be set aside for small or small disadvantaged businesses. That may serve the socio-economic goals of the Nation, but it makes a program manager think twice about sending money for a big acquisition to GSA or Treasury or NASA for someone else to buy.

That's strike three and I think GWACs are out.

I also think Ed O’Hare and Nick Wakeman are right. This is the end of an era for GWACs. The question is, with more acquisition work than ever before and fewer qualified acquisition professionals to get it done, what do we do now?

I’m seriously confused these days.

The Alliant Small Business contracts were awarded around the end of the year and there were at least a bazillian of them. (A bazillian is a quantification unique to the pundit community that means “more than six.”) The Large Business contracts were awarded at the end of the first quarter (second quarter if you’re in the Government). There were a gazillian of those. So, where is all the business?

I wrote last year that I saw a lot of pent up demand waiting for the Alliant program to become available. More than a few people agreed and we all thought there would be a rush of solicitations as soon as the contracts were awarded. Didn’t happen. Doesn’t look like it’s going to happen.

And, I think I know why.

In last year’s Defense Authorization bill, Congress made delivery orders subject to protest. Being protest-proof was one of the most attractive things about a delivery order in general and the GSA GWACs in particular.

In the same bill, Congress made it mandatory to compete every delivery order (of a certain size) among all contract holders in Multiple Award Contract (MAC) programs. Of course, NOT having to do that was also a very attractive characteristic of using one of the GWAC programs. No one likes to admit it, but if you carefully selected the “subset” of contract holders to solicit for a given requirement, you could be pretty well assured that your “favorite” would be the successful offer. If every requirement has to be competed among all contract holders, who knows who might win?

Then came the Delex (GAO) decision. When GAO said that FAR’s “Rule of Two” applied to delivery orders and not just contracts, and then added that MAC programs with more than one small business contract holder AUTOMATICALLY met the Rule of Two criteria (I’m interpreting here, but that’s the jist of it), the die was cast. I don’t see any way that a requirement contracted through Alliant could possibly be awarded to anyone OTHER THAN a small business. And, I think Agencies with all that pent up demand see the situation the same way I do.

Let’s face it. If you’re a Government program manager with a critical IT requirement (and aren’t they all?), would you turn it over to GSA knowing that it WOULD be awarded to a small business, it WOULD be competed among all (79?) small business contract holders and it WOULD be subject to protest?

And if you did, how long would it take? How long did Alliant take? Three years?

I think the level of confidence among program managers is so low that no one is going to send anything of any substance to GSA for procurement under Alliant. In fact, unless something has snuck through in the last week, the only solicitation even PLANNED for Alliant is GSA’s own revamp of the Recovery.gov web site.

I think this is a major development in acquisition, especially for the Information Technology space. What do you think?