High-tech firms expect to benefit from A-76 competitions

Many high-tech federal contractors expect to benefit from upcoming competitions under Office of Management and Budget Circular A-76, even though they've had little success in such competitions in the past, a new survey has found.

According to the survey of 100 top technology contractors, which was compiled by Grant Thornton LLP, a professional services firm based in Vienna, Va., 53 percent of respondents believe they will benefit from the government's effort to increase the number of jobs competed under the A-76 process. But respondents reported winning only 8 percent of the previous A-76 competitions in which they participated.

The General Accounting Office recently issued a study concluding that contractors have won about 60 percent of A-76 competitions to date. But "contractors are not as successful as the government says they are," said Joel Fair, manager of government contract consulting at Grant Thornton. "Of the government contractors I talked to, no one feels like it's a fair playing field."

"Most of the services competed early on [under A-76] were of a more low-tech nature," said Calvin Hackeman, partner-in-charge of Grant Thornton's Tech Industry Group.

"There need to be more wins by the private sector for [them] to want to compete," said Hackeman. "Then there is better competition which encourages even more people to bid."

Companies also reported on the survey that their sales under the General Services Administration's multiple awards schedule have increased by 60 percent since last year. Respondents expected schedule sales to increase another 50 percent to 60 percent next year.

However, much of this business was not new. Contractors have simply converted many of their existing contracts to the GSA schedule. Companies reported they were able to increase profit margins as a result of moving work to the GSA schedule.

A little more than half of respondents said they participated in GSA schedule sales. Eighty percent of the firms reported they also had their own schedules of products.

But the rise in schedule sales doesn't mean the indefinite delivery/indefinite quantity (IDIQ) contract is dead. About three-fourths of respondents reported receiving revenue from IDIQ contracts. Such contracts made up about 40 percent of the contractors' total revenues.

The survey also reported contractors will change the way they charge the government next year. Vendors said they will perform more jobs based on time and materials, and do less cost-reimbursable, fixed-price work.

The survey compiled responses from technology firms whose federal business accounted for more than 75 percent of their total revenues. The average revenue size of a contractor in the survey was $60 million.

Respondents belonged to the telecommunications, engineering and information services, management consulting, research and development, biomedical research and manufacturing industries.