The U.S. military services base many of their contracting decisions
on the past performance of competing vendors. The bigger, more established
companies that have fulfilled many contract obligations for the
services most likely have an extensive track record that the Defense
Department can rely upon. But what about those smaller companies
that are just starting out, or those who are just starting to recognize
the business opportunities available to them in the federal sector?
Many of these smaller entities have voiced concerns that, since
they do not have a past performance record with the Pentagon, they
are overlooked when it comes time to award a contract. But Army
officials insist there are plenty of business opportunities for
small, small disadvantaged, minority- and woman-owned businesses.
To resolve such issues and explore prospective partnerships, Army
and industry representative gathered at the 5th annual Army Small
Business Conference, in McLean, Va. The conference is co-sponsored
by NDIA and the Army Materiel Command (AMC).
Gen. John G. Coburn, AMC commanding general, called the past performance
issue a “real-world problem.”
“If you think everything is right,” said Coburn, “it’s
not necessarily so.” Coburn recognized those companies that
do not have a past performance record. “Never had past performance?
How do you get one?”
Some officials believe that a business’s performance in the
commercial sector can be indicative of its track record. “Some
say go work the commercial sector,” said Coburn, whose agency
is the Army’s top purchasing agent with $19.2 billion in annual
sales. That’s equivalent to $53 million each day.
One industry representative, at the conference, wondered why after
receiving multiple contract awards, his company had to compete for
specific task orders. This is because of changes to defense federal
acquisition regulations, said an official. If a contract or multiple
contracts are awarded to a business, sometimes the workload may
be too burdensome for smaller companies. Task orders are then competed
and awarded to a company that can get the work done, said the official.
“Past performance will simplify the process in getting task
orders,” he asserted.
Another issue in which small businesses struggle is competing against
incumbent large companies for follow-on or next-phase contracts.
This means that if the Defense Department has been satisfied with
a current contractor’s work on a particular system, it is
more difficult for another contractor to win future contracts for
that system. Competitors “have to work extra hard to impress
and prove [their] capability” against incumbent contractors,
said Edward G. Elgart, acting deputy assistant secretary of the
Army for procurement.
There will be plenty of new business opportunities at AMC as a
result of upcoming work in the so-called “recapitalization”
of old equipment, said Elgart.
Elgart told the conference that the Army “for the first time,
[has] a clear definition of recapitalization,” which involves
modernizing assets and legacy systems to sustain capabilities. This
entails extending service life; reducing operating and support costs;
improving system reliability, maintainability and efficiency; enhancing
capability, and reducing footprint on the battlefield, said Elgart.
The Army has 21 initial recapitalization systems. The top three,
respectively, are the M1A1/A2 Abrams tank, the AH-64AD Apache helicopters
and the UH-60 Blackhawk helicopters.