Consulting Magazine - April 2015

Corner

Each issue, Kennedy Consulting Research & Advisory (KCRA) offers a take on the current state of the consulting profession

Matthew A. Merker is a Senior Analyst & Lead for Public Sector Consulting Research for KCRA (Kennedy Consulting Research & Advisory). For additional information, visit kennedyinfo.com/consulting

The Minefield of Federal Procurement

Consulting to the U.S.Federal Government is not what it used to be. The free flow of funding to consulting firms from various federal departments has been stagnating or in steady decline since the economic crisis in 2008. As funds become scarcer, competition among firms increases in the federal procurement process. Additionally, clients must face the prospect of having less money to spend while undergoing greater scrutiny as they navigate the increasingly complex minefield that is federal procurement.

Budget decreases have dictated that federal departments must become stricter in the distribution of funds for consulting services. Clients must look at the services needed with a cold eye and truly determine if the work they need cannot be achieved with internal resources, even if the process is more difficult in the long run.

Added to that is the challenge that clients in federal departments face when it comes to the divides between their identified needs and what their contracting offices dictate they can do in terms of acquiring outside support. Several factors, while not new to federal government, have become increasingly present in the procurement practice, creating opportunities for some and challenges for others in the competitive proposal process.

The increasing use of Lowest Price
Technically Acceptable (LPTA) over Best
Value in proposal criteria is an example of
the growing challenge both for clients and
consultants. LPTA, a criteria that places cost
at the apex of award determination, has been
increasingly used over the past several years
over Best Value, a criteria that places greater
emphasis on quality of consulting work.

While most federal clients would prefer their request for proposals to be focused on quality, their contracting offices are more often placing these requests in the LPTA category, which precludes fair competition from premium service firms based on cost over capability to perform.

Another example can be found in the prioritization of small business for federal procurement. The U.S. Federal Government has increasingly focused on providing priority to small business in the procurement process. This creates advantages for these businesses trying to penetrate the federal market, but also often dictates that larger firms team up with these businesses in order to compete as well.

Finally, increased scrutiny on contract vehicles and what statements of work (SOWs) can be placed on those vehicles creates greater challenges across the board. For a long time, consultancies were able to add work regularly to existing contract vehicles with loose regulation by federal contracting offices.

Now, there is much greater scrutiny on new SOWs. Gone are the days where terms such as “business process re-engineering” could be used to describe IT, S&O, and HR services in one breath. Firms and clients must now tread more carefully through this process, ensuring that work added follows vehicle criteria to the letter.

These three practices are only a sample of the increasingly complex U.S. federal procurement process. The minefield that clients and consultants face in this process is only becoming more treacherous and will continue on this course throughout the economic recovery and likely beyond.