Tuesday, January 6, 2009
Introducing the Insider
The Industry Defined
HUBZones: Anyone Can Play
Beyond Reproach: The Incumbent's Bind
Breaking Wave: Human Resources BPO
Cooperative Personnel Services: Differentiating Not a Problem
Adventures in Marketing
Policy & Regs: Can We Satisfy the Appetite for Cleared Personnel?
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Early last year, Boeing was awarded a $14.8 billion contract to manage the design and demonstration phase of the Army's Future Combat System. FCS is creating the vehicles, large weapons systems, and system of systems for the transformation of the Army's land-warfare strategy. More than just a prime contractor, Boeing selects many of the subcontractors and performs systems tests. The arrangement also gives Boeing and teammate SAIC much of the direct work and a management fee of as much as 15 percent.
The Insider reviewed a recent, but unpublished, assessment of the program prepared by the Institute for Defense Analyses. The report described how the Boeing team and the Army shared responsibility in many respects and worked together more intimately than is typical in conventional prime contractor-federal agency contracts. The IDA recommendations reflect strong concerns with the potential conflicts of interest posed by the contractual arrangement with Boeing and call on the Army to strengthen its ability to monitor the Boeing team's performance. However, IDA, noting such risks, still appeared positive on the Lead System Integrator role played by Boeing.
This bleeding edge program management methodology is not for every company. However, the unique program integration and management arrangements for FCS provide a lot of food for thought for both prime and subcontractors in large systems and hardware contracts.
Offshoring of work performed under federal contracts is rare, but there is little formally to prevent it—other than a black eye and political backlash that could be expected in the present environment. Yet many sizeable federal services contractors maintain, and are adding to, offshore centers in such countries as India and China. These facilities typically perform software development and maintenance, operations support, and serve as call centers.
The Insider found government services firms to be close-mouthed about these facilities, even though their clients that use them are commercial enterprises in the United States, Europe, and elsewhere. In some cases, they also serve clients in the countries in which they are located.
The article identifies the few kinds of situations where there is an explicit statutory prohibition against doing US government business with service companies that have offshored jobs or which are based overseas.
The article also contains a chart showing the known location and size of offshore facilities of some of the larger US government services systems integrators and outsourcing companies.
We know that the government services business is moderately regulated. But did you know that the government is now seeking extraordinary transparency of your teaming strategies and arrangements? In Alan Chvotkin's monthly column, he reveals the agencies that are attempting to require full disclosure regarding why a company has teamed and visibility into the details of make-or-buy decisions. One agency is banning exclusive teaming agreements.
Chvotkin gives you the foundation for deciding what to do and makes some recommendations that will be useful to prime and subcontractors.