Every government agency has made at least one purchase through National Aeronautics and Space Administration‘s (NASA) Solutions for Enterprise-Wide Procurement (SEWP). The current version of SEWP runs through April 2014, and the program office is preparing to release the draft solicitation for SEWP V.

Based on the previous version of the contract and material that has been released, we can expect that SEWP V will award multiple commercial firm-fixed price, indefinite delivery, indefinite quantity (IDIQ) contracts. Competition in SEWP IV aligned to four groups across two different categories, as shown below:

Each of the groups has specific requirements and functional tasks that must be met by the products (and product-based services). According to the Joanne Woytek, the SEWP Program Manager, of the thirty-eight SEWP IV contract holders, seventeen were small businesses. The 70 federal agencies, boards and organizations using the SEWP GWAC result in around 25,000 orders annually. At around of $90,000 per order, the contract vehicle averages $2 billion in reported spending each year for the past three years. The estimated total, maximum ordering value of SEWP IV was originally valued at $5,600,000 for each contract. Due to the SEWP IV spending trends, the follow-on contract is expected to have a similar or higher value.

Update: According to the released draft, the performance period for SEWP V contracts has been extended and the ceiling value has increased. Interested vendors are encouraged to comment on all aspects of the Draft Solicitation. For more information visit GovWin IQ Opportunity ID: 82396.

As vendors look for opportunities amidst spending cuts and budget pressure, aligning offerings for vehicles like SEWP may be one strategy for maintaining market share. 

Continuing from my previous blog on Government  2.0’s effect on the traditional IT procurement process, I wanted to take a look at trends in government’s approach to acquiring Gov 2.0 technology. Part 1 of this blog series highlighted how small Gov 2.0 IT firms have begun to use non-traditional purchasing options to circumvent the traditional procurement process. Gov 2.0 firms are trying to avoid the procurement process because it has historically been more difficult for small IT firms to compete in the government IT market. However, today’s trends in IT procurement hint that times are changing. Since governments continue to face shrinking IT budgets against expanding IT costs and needs, they are now looking for alternative ways to do business as well. For many IT bureaucrats and contracting officers interested in Gov 2.0 technology, that means looking outside of the conventional procurement process, and toward smaller IT firms.

Code for America (CFA), an example of Gov 2.0 realized, is an organization that describes itself as “Peace Corps for geeks.” Established in 2009, CFA assigns programmers on year-long fellowships to work with local governments on in-house IT projects, to provide faster and more affordable alternatives to procuring vendor services and solutions. CFA noticed that new IT products, which it calls “civic startups,” were often created once the fellows had completed their assignments – essentially spawning new businesses. However, these civic startups that had created products for governments were having trouble selling their products. Finding the government procurement process difficult to navigate, many fizzled.

In response to this issue, CFA is setting up its first civic incubator, where a handful of IT entrepreneurs will participate in a five to six-month-long program that will provide funding and mentoring, while bringing their applications and solutions directly to local governments and school districts. This incubator is something CFA’s leadership hopes will turn the traditional procurement process on its head.

Another noticeable trend on the rise is localities across the country sponsoring crowdsourcing events and hackathon competitions as an alternative approach to the traditional solicitation processes for Web development solutions and services. In 2010, after working with CFA, the city of Boston took a one-day hackathon event to the next level by creating a permanent office within local government. The New Urban Mechanics Office was created to hire full-time programmers for in-house IT development projects as well as to conduct outreach to encourage, field, and partner with small IT entrepreneurs.

In another CFA spinoff, White House Chief Technology Officer Todd Park created the Presidential Innovation Fellows (PIF) program to  pair “top innovators from the private sector, non-profits, and academia with top innovators in government to collaborate on solutions” using technology. On August 23, 18 innovators from outside of government were selected to work on one of five projects over the course of six months. The PIF program’s goal is to synthesize open data, expand e-government services, and simplify the RFP process by “building a platform that makes it easier for small high-growth businesses to navigate the federal government, and enable agencies to quickly source low-cost, high-impact information technology solutions.” 

One of the five projects, RFP-EZ, was born after Sean Green, head of the Small Business Administration’s Investment and Innovation Program, remembered an instance with the Department of Health and Human Services (HHS). The department had a need for an IT project, but the project’s estimated cost was $5 million to implement by a traditional IT vendor. After some research and outreach, HHS partnered with smaller IT companies that were able to complete the project for just more than $400,000.

During the PIF announcement, Green gave an open call to developers, contracting officers, and small Web development firms to join the effort and participate through Github.com, which is an open platform where RFP-EZ will be demoed. If successful, many state and local level governments will likely partner with or imitate the RFP-EZ project. Park took to Twitter after the announcement to confirm that the PIF will also be working with both state and local governments, in addition to the federal government, to create these IT solutions.

Analyst's Take

At all levels of government, innovation and affordability have been contradictory terms. The Code for America debunked the idea that quality Gov 2.0 solutions and services had to come at a premium. CFA seems to have been the catalyst for the future direction of Gov 2.0. Governments willing to take the early leap by circumventing their IT procurement process and engaging with innovators directly can expect some growing pains, but they will likely be dulled by ultimate cost savings.

The traditional format of government procurement has been grounded in the 1950’s-style door-to-door salesman. Governments release a solicitation and wait for the salesman to ring their door bell to peddle goods. Now, government agencies with strict budgets have the option to shop around without going through a lengthy and expensive procurement process. Governments want convenience and efficiency without having to sacrifice quality and they are willing to go outside the traditional procurement process to get it. 

The Supreme Court ruled against three of the four provisions of the controversial Arizona immigration law on Monday. In a 5-3 vote, the majority of the justices concluded that the Arizona law unconstitutionally invaded the federal government's exclusive prerogative to set immigration policy. Many states looking to get a better handle on the presence of unauthorized immigrants in their state were watching closely, especially Alabama, Georgia, Indiana, South Carolina, and Utah, which all currently have pending Arizona-style legislation. With this Supreme Court decision, states and localities may begin looking at the E-Verify program more seriously.

For those not familiar, E-Verify was created in 1997 as a free and voluntary Web-based program targeting federal agencies and contractors. The program evaluates an employee’s Employment Eligibility Verification Form, known as the I-9 Form, against U.S. government records to determine if they are legally eligible to work in the U.S.

If a disparity is found, the employer is alerted and the employee is given eight federal government work days to resolve the issue while retaining employment. The program, operated by the U.S. Department of Homeland Security (DHS) and the Social Security Administration (SSA), was mandated for all federal agencies and contractors in 2007. Soon after, a handful of state governments began requiring their state agencies to participate in the E-Verify program as well.

There are currently 17 states that require public and/or private employers to participate in the E-Verify program: Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Utah and Virginia. While E-Verify mandates vary from state to state, all of the previously mentioned states require government contractors and subcontractors providing direct services to the state to enroll in the E-Verify program.

The E-Verify program is not without its flaws. In 2010, DHS released an outside study on the accuracy of E-Verify’s ability to identify unauthorized workers. The study found that 54% of unauthorized workers were able to slip past the system and gain authorization to work. The study attributed this high number to identity fraud. An unauthorized worker could cheat the system, by submitting documents from a person who was authorized to work. Since that time, DHS has worked diligently to increase E-Verify’s reliability and accuracy.

In most cases government contractors who knowingly employ unauthorized workers risk having their contract terminated. Penalties range in severity from one government entity to the next. For example government contractors that are found to be some of the most egregious E-Verify violators can face heavy fines, upwards of $2,500 per worker (Louisiana) or even five years in jail (Mississippi). However, in most instances, employers using E-Verify are presumed by the government entity to be in good faith and not subject to penalties should an unauthorized worker mistakenly or fraudulently be given authorization. So, it is in the best interest of the contractor to enroll.

So, how might the Supreme Court decision affect government contractors? Likely, state and local government mandates for E-Verify will pick-up steam. For most large government contractors who do federal and multistate government business, E-Verify is something of an old issue. Smaller and more regional government contractors may have recently ran into E-Verify hurdles, especially as the program becomes more popular among states and localities.

The main obstacles government contractors are experiencing are mostly logistical. Navigating though E-Verify’s enrollment and compliance process can be daunting and confusing to smaller firms with limited resources. Also, arranging to have all new and most existing employees verified within 30 days of a contract award can be a nightmare to medium-sized firms with decentralized staff. If a government contractor does not know where to start and wants to avoid potential fines, they can seek out third-party assistance from E-Verify employer agents who use E-Verify to confirm the employment eligibility of another company's employees. The agents audit all I-9 forms and identify errors to be corrected before submitting them to the government entity.

In light of the Supreme Court decision, and as illegal immigration becomes a bigger issue on the agenda for states, E-Verify will no doubt be a hot topic. Government contractors who are not currently enrolled in E-Verify and do most of their business with states and local government should start investigating the enrollment process now. In the future, E-Verify will become a standard tool and more prominent fixture in the state and local government contracting market.

If you are interested in guest blogging for Deltek’s general government services team, reach out to Jason Sajko at jasonsajko@deltek.com for more information! Meanwhile, be sure to follow us on @GovWin_GenGov! 

• While this data does not indicate business one-stop satisfaction for any given state or locality, it certainly appears that one-stop implementations have much potential as opportunities to help streamline business practices and provide more user-friendly interfaces.
• Business one-stops have some relatively attractive “soft” (but convincing) return on investment (ROI) for a limited population of end-user business applicants. However, governors and mayors are very tuned in to this constituency. So, despite the modest price tag of business one-stops, they provide vendors with tremendous opportunity to build their reputations as solutions providers at the highest levels of the state and local marketplace.