Millennia and Millennia Lite: The Zen of service contracting

As GSA plans its next big vehicle, agencies and contractors still find value in 1999 GWAC

The requirements coming in from client agencies have evolved to more complex, more inclusive solutions.'

' Chon Son, Millennia program manager

Courtesy of Chon Son

The General Services Administration's Millennia contract vehicle may be winding down, but it just got a new user, GSA's own FirstGov Technologies office. FirstGov.gov is the government's official Web portal.

For years, the office had worked with AT&T Corp. under the Federal Supply Service's IT schedule, or Schedule 70, but when a decision about the future had to be made as the IT Schedule task order was set to expire, FirstGov technologies director John Murphy realized that a different direction was needed.

'Schedule 70 is very good when you're buying specific items, but what we run is a very complex portal,' he said. 'It requires a significant amount of technology infrastructure and services to make it work properly. Schedule 70 didn't offer a sophisticated-enough solution, and Millennia has available the services we need that can be customized through the task order to meet our particular solution needs.'

Through Millennia, GSA awarded the contract to Raytheon Co. on May 11, with the assistance of the Federal Systems Integration and Management Center (FEDSIM).

'They were excellent,' said FirstGov's Murphy. 'They understand large solutions and how to take customers like us through the process in an efficient and timely manner. We don't have our own contracting officers, so they provided that and the support to take us through the process. They did a wonderful job for us.'

FirstGov's decision to use Millennia epitomizes the benefit of this contract, awarded in April 1999 as the follow-on to FEDSIM's $1.6 billion 9600 contract. Millennia has a $25 billion ceiling.

Over the past seven years, Millennia, and its medium-business counterpart Millennia Lite, have been popular among agencies wanting to buy technology and services.

The Homeland Security Department used it to build its Homeland Secure Data Network in 2004, and the Defense Department used it in 2003 to hire Science Applications International Corp. to plan and develop the Global Information Grid.

Millennia and Lite are indefinite-delivery, indefinite-quantity (IDIQ), governmentwide acquisition (GWAC) contracts for IT projects requiring large-system integration and development.

Millennia's broad scope includes software engineering, communications and system integration. It runs for 10 years with an initial five-year base award plus one, five-year renewal based on performance, already exercised in 2004.

It includes provisions for firm-fixed-price, cost-plus-fixed-fee and cost-reimbursable task orders. According to Jim Ghiloni, GSA's acting director for GWAC programs, the average task order value is $90 million.

Because Millennia was geared toward large system integration projects, contracts were awarded exclusively to a dozen large firms. Over time, that number has dropped to eight because of mergers and acquisitions.

According to consultant and former GSA executive Neal Fox, 'A number of companies made a lot of ruckus over the awards, [with] mid-size businesses squeezed out of the competition. So, GSA said, 'OK, everyone. Calm down. We'll do another contract, call it Millennia Lite and make it for medium-size businesses only.' '

Millennia Lite, launched in 2000, is geared toward mid-size IT projects, said Patricia Renfro, director of GSA's GWAC division, Greater Southwest Acquisition Center. Its services are offered under four specific functional areas: high-end IT services; IT planning, assessments and studies; legacy systems migration and enterprise systems development; and mission support services.

Each functional area has its own vendors, with a base contract period of three years and seven available performance-based extension years through 2010. The average task order value, Renfro said, is $1.7 million.

According to GSA, sales in fiscal 2005 for all four functional areas combined totaled $601.9 million.

Ghiloni said both Millennia and Millennia Lite offer a varied set of procurement options for agency customers, including satisfying DOD's Section 803 competition requirements.

Agencies can direct-order and direct-bill, which can be facilitated through the Enterprise GWAC Center.

'Customers can call the center and ask for delegation authority,' he said. 'They have training for how to administer an order. Then the customer can conduct procurement on their own time and in their own fashion.'

If that isn't feasible, GSA offers assisted services through FEDSIM. Customers are charged a contract access fee of 0.75 percent with a cap of $25,000 for Millennia if FEDSIM's assisted services are used. FEDSIM's service fee is additional, and the amount varies, according to GSA.

'Both contracts have served their purpose well,' said Larry Allen, executive vice president at the Coalition for Government Procurement, an industry association in Washington. 'I have companies on both contracts, and they like doing business on them. They feel it's a good way to reach customers.'

One reason these contracts have been so effective, Allen said, is that they offer the ability to do cost-plus work. Cost-plus contracting means the agency and vendors work out a deal where the government pays for the cost of the service, and the vendor, if it does a good job, receives an extra bonus or a fixed fee, which is their profit.

'If you have a customer who wants to do business with you on a cost-plus basis, they can't do it on the schedules but they can with Millennia and Millennia Lite. It's good to have a ready-made contract vehicle through which you can reach them,' Allen said.

Focus on Millennia

By the end of 2005, 116 task orders with a total award value of $8.9 billion were made under Millennia, said Chon Son, Millennia's program manager. Since its inception, the nature of the projects has changed.

'The requirements coming in from client agencies have evolved to more complex, more inclusive solutions,' Son said. 'Now, industry is driving service-oriented architecture, and I think that will be the next flavor.'

With 14 task orders awarded for a total obligated value of $533.1 million, Ray- theon isn't the largest dollar winner on Millennia'that distinction belongs to SAIC, with 21 task orders valued at $1.8 billion. But, 'we're up with the big guys when it comes to tasks we've done,' said Rick Davis, Raytheon's Millennia program manager. 'While some of our competitors focused on one GSA organization, we have a huge footprint across GSA.'

Under Millennia, Raytheon has built and operated supercomputers, created the IT and infrastructure support for programs controlling nuclear material, and created IT programs for radar systems that Davis described as being able to 'see a beating heart through a foot or two of concrete.'

Raytheon has, however, seen its Millennia sales drop from $79 million in 2004 to $46.6 million in 2005.

'GSA was having hard times, and it reflected back on us,' said Davis. 'Some programs are long and carry on no matter what. Some of ours ended, and we weren't able to get as many new contracts.'

Lockheed Martin, another contract holder, hasn't had that problem, said its Millennia program manager, Jeff Chesko. In fact, in that same time period, the company's sales under the contract shot up from $98.9 million to $138.3 million.

'It's going well. We haven't had that many new programs,' he explained. 'It's just that our existing programs are running at maximum capacity.'

Lockheed Martin's primary work is for DOD, and its largest task order is providing a full range of support for the Army Information Technology Agency's network infrastructure services and operations.

'At the time of the award, it was the largest award on Millennia,' said Chesko. 'We're also supporting the Naval Oceanographic Office's supercomputing center at Stennis Space Center.'

Millennia has faced some competition from other contracts, including DOD internal contracts. But Son said that it can be difficult to staff and manage individual contracts.

'GSA has been doing this for decades,' he said. 'I don't think any non-GSA federal agency can do what GSA does. The volume of business is an indicator.'

But Son has run up against specific challenges of managing a contract at a time when staffing levels are low and oversight requirements are high.

'I'm basically a one-person shop. We have issues that always come up, and if they can't be dealt with at task levels, agencies and prime contractors will come to me informally to resolve them,' said Son. 'My core responsibility is to make sure I review and approve any work statement before any prime contractors are solicited for a proposal. I determine if they're within the scope of the master document or not.'

Son said his major concern is simply getting information. 'Staffing levels are very critical right now. I can't possibly stay on top of every issue every day. If you don't have the right level of staffing, you suffer in terms of providing the right amount of oversight. If you don't have that oversight capability, things slip through,' he said. 'Our concern is how to manage these major IT projects with limited staffing and no near-future plans for upping it.'

On the Lite side

A quick glance at the four functional areas of Millennia Lite shows a basic lifecycle of an IT project. Feliza Kepler, president and chief executive officer of Data Networks Corp. of Reston, Va., is one of the vendors of functional area 1, and has been doing work in IT planning, studies and assessment for years.

'We're a very small company. There are 35 to 40 of us, and we have revenues of $7 million,' she said. 'With Millennia Lite, you had to win this on your own in terms of past performance but could call on larger companies to sub for you to be able to cover your reach in terms of geography.'

Although Kepler could have been evaluated for Millennia Lite as a small, disadvantaged or woman-owned business, she declined.

'We wanted to work with contractors like SAIC, and they'd have no incentive. It was better if we could be more responsive to what government really needed and could partner with companies who knew the subject area,' she said. 'We selected principally small- and medium-sized companies but also SAIC. So, it was a test of the small companies, not just of their past performance but also of their ability to manage a program working with a company 100 times their size.'

According to Kepler, it's turned out well. The company's initial base award of three years was extended another three years'the only small business on the award that earned that second full term. After another evaluation, DNC got yet another full-term award. 'This was for four years, which will take us to the end of the contract,' Kepler said.

DNC's big customer on Millennia is the Drug Enforcement Administration, and the company has earned about $2 million from the contract annually since 2004.

Millennia Lite's task orders are comparatively small, especially functional area 1 jobs, which Kepler said top out at $10 million. And, she personally is conservative about the projects she bids on.

'We don't want to bid on things we can't do well,' she said. 'We don't want to choke. Mostly, we look at the scope of a job to make sure we can write a good story and perform, but sometimes you have to bid on jobs to keep your foot in the door. It's part of marketing.'

CACI International Inc. of Arlington, Va., which is far larger than DNC, has awards for functional areas 3 and 4. It won functional area 4 directly, but became an area 3 vendor as a result of acquiring Century Technology, which was an original vendor on the contract.

CACI has booked more than $400 million in funded orders, achieving its proposal target, according to Ted Buford, CACI's GWAC/GSA program management officer for Millennia Lite.

While Buford praised the contract for offering the full spectrum of IT solutions, he noted that the functional areas might be confusing to a client.

'Clients don't want to be confronted with having to choose within functional areas,' he said.

Both Buford and Kepler have seen a trend among customers of using direct-order, direct-bill instead of assisted services.

'GSA's contract support services are very knowledgeable about the contract and very responsive,' said Buford. 'If we have a client that wants direct-order, direct-bill, we can call the GWAC office in Texas and they'll call the client to explain how it works. It's exceptional support out of that particular office.'

Kepler said one reason the trend is moving away from assisted services is the layers of review GSA has set up that 'have caused orders that used to take two weeks to now take four months. So agencies do it themselves.'

According to GSA's Renfro, the biggest users of Millennia Lite are GSA assisted-delivery offices, particularly FEDSIM, and the GSA offices in:
  • Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee

  • Arkansas, Louisiana, New Mexico, Oklahoma and Texas

  • Washington, D.C., metro area, including parts of Maryland and Virginia.

The primary customers of Millennia Lite are the Air Force, Army and Navy.

'This is what GSA envisioned,' Renfro said. 'The assisted-delivery offices utilize Millennia Lite because many of the industry partners are midsize firms that are a good fit to support the end users' midsize projects. GSA assisted-delivery offices have said that they feel they and their clients receive more individual attention and support from top levels of the Millennia Lite companies quicker, because there are fewer layers of management and overhead at many of the Millennia Lite companies.'

Of course, a look at the list of Millennia Lite vendors shows a number of large businesses, including Computer Sciences Corp., General Dynamics, Lockheed Martin, Northrop Grumman and SAIC. And, it's this change in the industry landscape that will have an impact on Alliant, the contract that will follow Millennia and Millennia Lite as they enter their final years.
In anticipation of Millennia's expiration and that of another IT contract, Applications 'N Support for Widely Diverse End-User Requirements (ANSWER), GSA has been working on the next IT contract, Alliant.

This GWAC will feature a 10-year IDIQ multiple award, with a five-year base and one five-year option, and support fixed-price, cost, time-and-material and labor-hour task orders.

In this iteration, Alliant will have a $65 billion ceiling and make awards to 65 to 90 vendors. Alliant will be split into two contracts, one for large businesses and one for small firms. GSA released draft Alliant solicitations in April 2005 and again in June, and plans to issue the final one in October. Officials have said the new contracts would be awarded sometime in 2007.

Unlike Millennia Lite, there will be no functional areas. 'It has been a bureaucratic nightmare,' said Ghiloni, who is also the Alliant project manager. 'So that will change with Alliant. What we'll do is describe the components that make up an IT solution at a high level. When companies that are referencing their past performance haven't got experience in one, it will be considered neutral and they'll be asked how they'll supplement that missing capability'they could team up with a company, acquire a company or hire people who have experience in the area.'

Alan Chvotkin, senior vice president and counsel for the Professional Services Council, an industry association in Arlington, Va., has been watching GSA as it has outlined the new contract, and sees another external factor that will minimize some of the churn experienced with Millennia and Millennia Lite.

Small-business issue

'At that time, the procurement regulations looked at the status of a small business at the time of its award, and the company would retain that status throughout the life of the award,' he said.

'But two things have changed. With respect to GSA-managed programs, they're annually approved by the Office of Management and Budget, which now requires re-certification of the size of all vendors every five years,' he said.

'Second, the SBA has changed its regulations about who is a small business. It's called the novation rule. When a company is acquired or otherwise grows, it no longer automatically can claim to be small and has to be re-certified or lose its small-business status. Companies don't lose the contract, but it has ramifications for agencies that can no longer use the company to satisfy its requirements for small-business awards.'

Already, current Millennia vendors are anticipating the Alliant request for proposals, but there is some anxiety out there, according to the Coalition for Government Procurement's Allen.

'GSA wants to keep the number of awards manageable on Alliant, which is causing angst among small and medium-sized businesses,' he said. 'They may not be able to offer a complete suite of services. GSA said they will keep that in mind and look for best-of-class solutions, but there's no definition of what 'best in class' is.'
In fact, Fox, the former GSA official who helped put together the Alliant concept, said that the new GWAC will serve as a big umbrella for major IT acquisition to eliminate various governmentwide contracts.

'The concept for Alliant was not to have all these confusing, duplicative programs out there,' he said. 'A lot of niche GWACs were put out for marketing purposes, and it was very unsuccessful and a waste of time. So, they're going to roll a lot of these under Alliant. The biggest issue for Alliant is that it might look like the last train rolling out of the station, and those vendors left out will be upset.'

But, among some vendors, the future still is far off, and they're busy marketing their current contracts.

'Millennia will be replaced, but that's 18 months off,' said Raytheon's Davis. 'We still have a healthy contract with a broad scope and can take on a task order for five years. In the end, the objective is not a contract. It's to get work done that will support the citizens of the United States to catch terrorists, secure the border or get some retiree his paycheck. You can't let the tool become a roadblock. You have to remember the mission. We're all working toward that end.'

Caron Golden is a freelance writer in San Diego.

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