Integrators: Specialization Will Drive Public Sector Opportunity

Public sector IT may be slow to adapt to change, and with everything from cloud computing to Web 2.0 technologies promising sweeping change to federal, state and local government, education and health care, the public sector integrator community has plenty of reasons to be cynical.

But a panel of solution providers and consultants at Everything Channel's IT ChannelVision Government event had a different message for that community Monday: There's plenty to be optimistic about. Temper your expectations and learn to specialize, they urged integrators, and you'll find more opportunity -- from large integrators down to the smallest specialty VARs -- than ever.

"The term Web 2.0 makes me bristle a bit because it makes it sound like it's the first time any of this has been tried," said Greg Rothwell, president of Evermay Consulting Group, a federal IT contracting consultancy. "We've been seeing a move toward government of a decentralized nature for a while. The best thing to do -- you'll be much better off -- is to strategically pick those agencies you really want to target."

Rothwell would know; as a veteran of government procurement for more than three decades, he served in some of the most visible procurement positions for the Department of Homeland Security and other federal agencies.

On the panel Monday, he united with solution providers from major integrators and small businesses alike in urging public sector solution providers to pick their battles more effectively.

One of the problems with identifying contract opportunities is that presidential administrations come and go, argued Paul Karch, president and CEO of Gardant Global, a Washington, D.C. solution provider. In other words, what might today be a top priority of one administration -- such as the Obama Administration's push toward open, transparent, tech-savvy government -- might go out the window tomorrow depending on election results.

The solution, said Karch, is to look ahead at what will stick. Identify those contracts that don't hinge on administrations and that come up for review years down the line.

Many of the best Government-Wide Acquisition Contracts (GWACs) and indefinite delivery/indefinite quantity (IDIQ) agreements are structured to be consistent even as administrations and priorities change, he explained.

"There's a very good path for consistency, and we're seeing a lot of ramp-on, ramp-off built into the contracts," Karch argued. "These long term GWACs or IDIQs are sometimes five to 10 years in length, and that provides great transition for technologies, types of procurement and organizations."

Small VARs, too, can hitch their wagons to those types of contracts, said Jim Fraser, account director at HP Enterprise Services, the former Electronic Data Systems that was acquired by Hewlett Packard in 2008. His advice to small VARs is that they often have an easier time winning public sector business thanks to how nimble they can be -- and that thanks to changes in procurement, there's a lot of opportunity in partnering with large systems integrators like his own.

"Each agency seems to be favoring a lot of their own contracts," he said. "A lot of business still moves through GSA of course, but whether as a prime or a sub[contractor] there's room for everyone."

Small-sized integrators like Comm-Group, an 8 (a), veteran-owned solution provider based in Chevy Chase, Md., often realize they're not looking in the right places for contract opportunities. (The Small Business Administration's 8(a) designation classifies disadvantaged small businesses to give them preferential treatment in some times of federal contracting.)

"We focus on the one or two GWACs we think are going to bring us success," said Linwood Jolly, president and CEO of Comm-Group. "In the beginning, 11 years ago, we used to spend a lot of time at the small business office. They have good information, but they don't own the opportunities. They can't give you partnerships with large integrators and can't give you everything you could find."

Both Rothwell and the three integrators agreed that to ignore the recent shift toward firm-fixed price (FFP) contracts in government -- that is, where the public sector entity pays the contractor a fixed amount that won't vary, and the burden of accountability is shifted more to the contractor to deliver on what's promised -- is to do so at one's peril.

But FFPs also give integrators and VARs more freedom to develop value-added solutions for government customers. More of the burden is on them, but the government is implicitly stating, "here's what we need and you decide how to customize provide it," he said.

"That's a huge opportunity to influence government offices," Fraser said. "You can take the lead on designing those solutions."

All four panelists agreed that enthusiasm for the American Recovery and Reinvestment Act (ARRA) -- and specifically, tech opportunities around the federal stimulus -- had waned.

"It's a lot of money being pumped out," Rothwell admitted. "But at the same time, don't let changed expectations let you miss opportunity. I am optimistic."

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