General Service Administration (“GSA”): Shifting to the Center of Government Contracting
In recent years, the General Services Administration (“GSA”) has released larger and broader awards to leverage contract bundling as a cost cutting measure. The effort to avoid duplicative or redundant contracts and programs within the Federal Government has shifted focus on the GSA as a primary procurement avenue.
The GSA has consolidated contracts across subcategories in an effort to eliminate artificial categorical boundaries between contracts and better comport with agency procurement processes. Of the estimated $25-$30 billion addressable market for Federal IT Outsourcing / Consulting, the GSA is estimated to perform $13.8 billion, or 46% of the market, in IT services value through its contracts in GFY2016. The concentration of spending through the GSA is expected to increase in subsequent years as the agency develops tools, such as CALC.gov, to facilitate spending and assure buyers that pre-competed approaches can meet custom needs.
Two main avenues of spending through the GSA currently include:
- Alliant 2 (“A2”) for large, complex, custom IT solutions is GFY2015’s largest contracting opportunity with an estimated ceiling value over $65 billion. The previous generation facilitated more than $3.7 billion in IT spending in GFY2014. Increased spending is expected on A2, which simplifies the procurement process with standardized IT services labor categories. The longevity of Alliant is already anticipated and the Department of Homeland Security (“DHS”) is considering consolidating its Enterprise Acquisition Gateway for Leading-Edge Solutions II (“EAGLE II”) contract into the third generation of Alliant.
- The One Acquisition Solution for Integrated Services (“OASIS”) and OASIS Small Business (“SB”) contracts allow agencies to meet professional service objectives with both commercial and non-commercial requirements. The contracts are focused on providing complex integrated solutions and have long-term procurement avenues with on- and off-ramping for contractors throughout the contract term. OASIS has quickly become the professional services contract solution of choice and has commitments from both the Air Force and the Army for $500 million of spending per year.
The GSA is becoming the agency for Government contractors to watch as it affords not only opportunities in terms of spending dollars, but also provides the chance to bulk up past performance with new customers as the contracts have wide spread Government use. Contractors with transferable and scalable solutions in key areas will be able to capitalize on large opportunities. However, contract consolidation is also indicative of expansion of contract scope. If unable to meet requirements alone, it is important for small- to mid-size firms to find the right partners with which to bid on GSA contracts. Alternatively, these firms may seek M&A opportunities to acquire new capabilities or build past performance qualifications. M&A is a critical strategy to broaden capability scope and allow companies to bid on large government-wide contracts that cover a vast amount of capabilities under their Statements of Work (“SOW”). Moreover, companies that may shift business development (“BD”) strategies from contract-specific procurement offices towards large GSA procurements may use M&A to capture and demonstrate qualifications / past performance with a diverse portfolio of customers; essential to wining work on large contracts, such as OASIS and Alliant, which provide solutions to a wide range of agencies.