Managed service providers: An approach to procuring IT staff augmentation services

Published: December 18, 2013

Contract AwardsIT Services

The use of managed services provider (MSP) or supplier-managed staff augmentation contracts has increased in recent years, with at least nine states in the mid-Atlantic and Southeast using them to procure IT staff augmentation services. MSP contracts offer governments an opportunity to streamline operations and focus on core responsibilities by partnering with a vendor who manages a pool of IT professional service providers and acts as the liaison between government end users and the staffing pool. This has become especially advantageous in recessionary times due to the fact that enterprise-wide staff cuts drive the need for temporary services provided with an efficient, low administrative investment methodology.

Computer Aid Inc. (CAI), Optimal Solutions and Technologies (OST), Ask Staffing Inc., NTT Data Inc., and Teksystems Inc. are some of the full-service providers contracting with states for IT staff augmentation contracts. Vendors like these are ahead of the game in addressing the economic needs of state and local governments, specifically their managed full-service staffing programs.

Being a full-service provider typically includes planning, implementation, management and support services. Governments rely on these providers to deliver tasks such as agency consultation, vendor response management, candidate evaluation and validation, interview facilitation, onboarding, invoice processing, help desk support, and performance oversight.


The above diagram displays best practices CAI uses for its term contract with Delaware, found here. This model results in governments saving time, money and resources while getting competitive, fixed prices categorized by job description and skills. It also allows states to rely on a vendor to manage certain tasks while focusing their energy on larger initiatives. This model is also used by Optimal Solutions and Technologies (OST) for its term contract with Washington, D.C. Other states choose to utilize multiple vendors as full-service providers, such as Massachusetts’ IT staff augmentation contract.  

The growing trend of states using full-service providers also indicates a change in the way vendors consider participating in IT staff augmentation contracts. Vendors should be considering how they do business and exploring other ways to go about it. Touting your full-service provider status to compete in the game is one option, but many vendors still need time to catch up with those dominating the market at this point. Therefore, they should consider joining vendor network pools for IT staff augmentation contracts. They are typically free to join and a great option to win business and start strengthening your profile. 

If you want to sell to state and local governments and better understand statewide term contracts, take a look at the GovWin IQ Term Contract Resource. It will help answer questions about where your competitors hold contracts and what their pricing is. The resource also details how states qualify vendors and which governments can utilize term contracts. With more than 12,000 state IT contracts, Deltek’s term contracts resource is a great place to find upcoming opportunities, including IT staff augmentation contracts. To learn more about upcoming key term contract opportunities and Deltek’s recommendations to vendors looking to qualify for these contracts, visit Deltek’s Term Contracts Top Opportunities for FY 2014 report, here. 

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