Belated congratulations to the 57 new-comers and 13 incumbents who were awarded the U.S. General Services Administration (GSA) Veterans Technology Services 2 (VETS 2) SDVOSB set-aside vehicle last October! Welcome to the $5 billion IT services contract that provides access to agencies across the U.S. Government.
When life hands you lemons, make some lemonade.
WARNING: do not expect VETS 2 to yield the same level of spending in its first iteration. The first VETS barely surpassed $2 billion total spend over its 10-year period of performance ($2.03 billion). Considering VETS has experienced a steady downward spending trend, we need to tame our enthusiasm.
However, VETS 2 is still an opportunity to hunt! VETS is a Governmentwide Acquisition Contract (GWAC). Every single U.S. Government agency can use this to buy from you. Use this as an enabler to market your business. Bring in the deals. Win some contracts!
Considering that VETS 2 is out of protest purgatory and officially open for business, what’s next? Identifying targets and revving the capture engine. Let’s get started.
Who bought via VETS?
Hopefully you did your homework before submitting your VETS 2 solicitation hit the streets, but if early 2016 seems as long ago to you as it does to us, it’s time for a brief refresher. The Department of Veterans Affairs (VA) and Department of the Air Force have spent the most on VETS over the past five years (more than $130 million each), closely followed by the Army at $113 million. The Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA) round out the top five, spending less than half as much as the top spenders.
| Agency | Contract Obligations by Federal Fiscal Year ($M) | Average FY2015-FY2017 | |||||
|
2013 |
2014 | 2015 | 2016 | 2017 |
FY2013-FY2017 |
||
| ARMY |
$22.8 |
$20.1 | $28.6 | $24.0 | $17.6 | $113.0 |
$23.4 |
| USAF |
$34.0 |
$42.3 | $25.5 | $19.4 | $10.9 | $132.3 |
$18.6 |
| EPA |
$13.9 |
$11.6 | $14.1 | $14.1 | $11.9 | $65.6 |
$13.4 |
| VA |
$74.7 |
$28.1 | $16.5 | $10.2 | $8.0 | $137.5 |
$11.6 |
| ENERGY |
$6.2 |
$4.7 | $5.9 | $11.9 | $13.8 | $42.6 |
$10.5 |
| COMMERCE |
$1.9 |
$8.1 | $7.4 | $8.3 | $7.3 | $33.0 |
$7.7 |
| OSHA |
$18.5 |
$19.4 | $15.2 | $2.3 | $1.2 | $56.5 |
$6.2 |
| STATE |
$3.7 |
$3.8 | $3.4 | $7.0 | $3.1 | $20.9 |
$4.5 |
| CMS |
$5.0 |
$5.0 | $5.1 | $4.1 | $4.1 | $23.3 |
$4.4 |
| DFAS |
$0.0 |
$3.7 | $4.4 | $4.4 | $4.3 | $16.8 |
$4.4 |
The last full five fiscal years have a broad array of customers, but spending has declined overall.
Not surprisingly, three of the top ten agencies are Defense or Defense-related – the Army, Air Force, and Defense Finance and Accounting Services (DFAS). While the VA spent the most over the past five fiscal years, that spending tapered off since FY2015. Contracts such as T4NG took over significant market share from VETS. Additionally, while all DoD agencies spent more than $295 million over the past five years, only DFAS and U.S. Transportation Command (USTRANSCOM, not included in table – $4.5 million five-year total; $0.93 million FY15-FY17 average) have increased their spending on VETS. The Army and Air Force both decreased their contract obligations on VETS but are still two of the highest spenders annually.
If you were hoping to use this as a platform to win with Centers for Medicare and Medicaid Services (CMS), you’re most likely out of luck. CMS awarded their own IDIQ, SPARC, and will likely prioritize their vehicle over VETS 2. Additionally, the EPA and U.S. Department of State will probably not be able to continue spending at their current rates due to their significant FY2018 budget cut (31% and 28% lower than FY2017, respectively) – a trend likely to continue for the duration of the current administration.
Now that we’ve got the bad news out of the way, where are the growth opportunities for VETS 2? The Departments of Energy and Commerce both significantly increased their spending on VETS over the past five years. Additionally, there will be significant opportunities within DoD, particularly the Army and Air Force, as they are still fairly acquisitive via VETS.
Show me a pipeline!
Several of the biggest winners on VETS are not primes on VETS 2, leaving a lot of potential money on the table for new awardees. 70% of the top ten VETS contractors are not on VETS 2, including OBXtek, Vision Technologies, Veterans Enterprise Technology Solutions, and Kingfisher Systems. While there are a good number of opportunities that should be re-competed over the next three years, we should note that anything funded by VA or CMS may be re-directed to their own contract vehicles.
| Incumbent | What is it? | Funding Customer | Current planned end date | Base & All Options | |
| Pro-Sphere Tek | Rocky Mountain Region (RMR) IT and Supervisory Control and Data Acquisition (SCADA) support services | ENERGY – Western Area Power Administration | 7/31/2018 | $9,903,474 | |
| Kingfisher Systems | Network engineering and management support services | AIR FORCE – 78th Air Base Wing, Communications Directorate | 7/31/2018 | $2,508,672 | |
| Innovative Management Concepts* | Army Training Management System (ATMS) Sustainment | ARMY – Training Management Directorate | 8/30/2018 | $3,727,262 | |
| Veterans Enterprise Technology Solutions | Command, Control, Communications, Computers, and Information Management (C4IM) Support Services | ARMY – Cadet Command | 8/31/2018 | $11,354,203 | |
| Innovative Management Concepts* | Corporate and Regional Matrixed Budget System (CRMBS) support | VA – Office of Construction & Facilities Management | 9/27/2018 | $4,009,299 | |
| OBXtek | Tier 1 and Tier 2 helpdesk support for GSA FAS OCIO applications | GSA – CIO, Office of Business Management | 9/30/2018 | $14,446,774 | |
| Innovative Management Concepts* | SharePoint technical subject matter expertise and web development | Defense Security Cooperation Agency (DSCA) | 3/8/2019 | $1,970,256 | |
| Centuria Corporation* | Mission Support Information Technology Services (MSITS) National Weather Service (NWS) network support services | COMMERCE – National Oceanic and Atmospheric Administration (NOAA) | 7/31/2019 | $74,462,619 |
*Denotes that the incumbent is a prime contractor on VETS 2
Be mindful that the above is a sample of the potential pipeline. With several of the VETS prime contractors not making it to VETS 2, we must remember that where there is chaos there is opportunity. We’ve identified a number of potential exposed opportunities. Let us know if you’re interested.
Highlights include:
- This is a GWAC so any U.S. Government agency can use it (that’s a good thing)
- Many of the big spenders on the original VETS vehicle are unlikely to maintain that trend; VA CMS both have their own department-specific contract vehicles, while EPA and State’s budgets have both been significantly trimmed.
- DoD as a whole has stayed more engaged on VETS usage
- Several of the most-awarded contractors from VETS are not primes on VETS 2, leaving many contracts potentially exposed for the re-compete…if the customer keeps the opportunity on VETS 2
Stay focused. Do your capture homework. There are some great opportunities out there. Good hunting!
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