Strength in Numbers

Crowdsourcing performance intelligence improves pricing, transparency, and performance.

By Michael J. West

Government technology buyers are crowdsourcing performance intelligence to win solutions to their common problems with big governmentwide vendors.

On its face there’s nothing particularly “innovative” about sharing vendor performance and pricing information across a business entity. Such information is foundational to any form of category management. However, the federal government often does not function like a single business entity.

The Obama administration introduced governmentwide category management to reduce a range of disparities in treatment of different agencies by contractors doing business with many of them.

“Instead of the Government banding together as the world’s largest buyer to negotiate better prices and terms, too often it buys like thousands of small businesses,” noted then-U.S. Chief Information Officer Tony Scott and Office of Federal Procurement Policy Administrator Anne Rung. The comments appeared in a 2015 memo to department and agency heads about IT category management. “Laptop prices can range from about $450 to $1,300 for the same configuration, which is a price variance of almost 300%.”

That was only part of the problem. “It wasn’t just causing disparate pricing,” says Warren Blankenship, program manager for IT governmentwide category management at the General Services Administration (GSA). “It was also causing disparity in terms and conditions across the government from the same vendors,” These disparities, he notes, are the reason the government established category management in the first place.

Now, groups of government information technology buyers have begun meeting to share their assessments of government’s largest IT sellers. When they identify common challenges with these large vendors, known as original equipment manufacturers (OEMs), the buyers’ groups meet with the sellers to discuss and exchange information about closing expectation gaps. It is part of the governmentwide category management program’s leveraging of the size of the government’s business to win better pricing, terms and conditions, and performance from governmentwide contractors.

OEM Assessments and IT Buyer Communities of Practice (ITBCOPS) are initiatives of GSA’s IT Vendor Management Office (ITVMO). Stood up in October 2020, the ITVMO is working to create a space where some of the biggest federal IT acquisition programs and initiatives can collaborate and solve shared problems. The goal is to mature IT acquisition so that the government acts more like a single buyer rather than a slew of agencies independently sparring with goliath companies.

Among its initiatives, the ITVMO compiles profiles that provide agencies with pricing information, and terms and conditions for specific vendors along with best practices for negotiating with each one. The office also provides deep vendor intelligence crowdsourced from IT acquisition experts across the federal government.

Like category management itself, this information sharing about vendors is an effort to leverage strength in numbers. Consolidating demand and spending reduces disparate pricing across agencies; buying as a single enterprise also wins lower prices. Similarly, sharing post-contract-award information in the ITVMO allows agencies to present a united front in managing vendor performance. It also lets suppliers address common problems in a cross-agency forum.

The Information Technology Vendor Management Office (ITVMO) was created jointly by the GSA, Office of Management and Budget (OMB), National Aeronautics and Space Administration (NASA), National Institutes of Health (NIH), and the Department of Defense (DoD), as a one-stop cross-agency information shop. Implementing the ITVMO has been a phased process, with full operations planned for 2025.

“We were really focused on what some of our key offerings might be,” says Kyra Stewart, program manager of the ITVMO. “And as we started to establish those offerings, develop resources, reach out to our customers, we realized they were spread all across government, and there was no easy way to find all of the IT buyers. And we thought it would be great if there was one place where they were all collected, so that we could reach out to them to understand what their needs were.”

The ITB CoP

This is how the IT Buyers Community of Practice (ITB CoP), chartered in May 2022 under the CIO Council’s Enterprise Operations Committee, came to be. The goal of the CoP is to include representatives from all 24 of the Chief Financial Officers Act agencies. “Right now we’re at about 70% of securing representation for each of those agencies,” says Stewart. “I think at last count, we had about 17 or 18 unique agencies represented.”

Part of the rationale for creating the CoP was the realization that ITVMO offerings involved a larger spectrum of government employees than first imagined.

“It wasn’t just the contracting officers and the contracting officer’s representatives (CORs),” says Stewart. “It’s also the IT project managers (PMs) and the software managers: those folks who are actually working with the contracts and programs to ensure that agencies are getting the specific deliverables and the resources. In some cases, it’s the supply chain risk management professionals, the security professionals who ensure that the resources that we’re receiving align with the safety protocols. In some cases, it’s the legal professionals who obviously are involved in the execution of the contracts.”

The primary arena is the standing Community of Practice meeting that the VMO hosts each month, to which all agency representatives are invited. The monthly meetings each focus on a specific topic of interest. “We surveyed the agency reps at the start of the CoP to see what topics they were addressing in their agencies,” Stewart says. “Their priorities, small business utilization, cybersecurity, innovations in acquisition, things like that.”

The CoP is organized into working groups that concentrate on specific areas. The cyber category team, for example, is tasked with understanding what cyber security offerings exist across the government’s IT best-in-class vehicles, and to marshal those resources to support all of government. Like the working groups, cohorts—still a work in progress—will come together to discuss a shared challenge or topic of interest. However, their orientation will be toward grouping agencies together.

This idea came about when one agency was experiencing challenges with a particular software vendor. “They said, ‘Hey, we’d just like to bring together the agency reps who work with this vendor—PMs, contract managers—who we can engage with as needed to talk about what they’re experiencing and what they’re doing,’” Stewart says. “They want to come together with some regularity and talk about that topic. So, we’re developing cohorts as another approach.

“When we are looking, for example, at Microsoft in that process, we invite agency representatives to come together and share their experiences. What we look for is, what are those common challenges? What are those things that bubble to the top and resonate across multiple agencies? And those are the issues that we tackle. We’ll put together problem statements, and once the agencies concur that this is what they’re experiencing, then we go back to Microsoft and say, ‘Hey, here are some of our key common challenges. How can you help us address them?’”

Assessing Big Sellers

IT Specialist Heather Stier, who leads the ITVMO’s vendor assessment process, follows a standardized, six-phase OEM assessment approach.

Identification Phase

The first phase is identification: determining which OEM to assess. (The target is to conduct three to four assessments in each fiscal year.)

Currently, Stier says, there are no specific criteria or circumstances that mandate a vendor’s being assessed—but there are several factors that might suggest it is warranted. “We obviously look at spend across the federal government,” she says. “Right now, we’re working on assessments based on cost escalation issues. At other times, it’s based on a policy need: a change in cybersecurity posture, or a mandate from the White House or OMB. Sometimes it’s just interest expressed in our engagement with the CoP.” Sometimes leadership mandates and CoP concerns overlap; for example, OMB’s semiannual integrated data survey of government agencies might indicate that multiple agencies anticipate procurements from the same OEM.

Discovery Phase

Once identification is accomplished, Stier and her team conduct the discovery phase by way of a federal agency forum. “We ask, ‘What are your successes and what are your challenges?’” Stier says. “We want the successes so that we can hopefully build resources to share them across the federal government. With the challenges, there are always one-offs, but oftentimes a lot of agencies are having the same challenges; typically, the ITVMO approaches the OEMs with somewhere between three to five pretty consistent challenges.”

If critical mass plays a key role in discovery, so does priority. Some issues are impactful for the government across the board, consensus not-withstanding. “Cybersecurity is a big issue,” says Stewart. “How to drive down costs; how to engage better; how to build better guardrails.”

Communication Phase

Once discovery is complete and challenges are identified, the ITVMO communicates them directly to the OEM in a formal letter—a “Vendor Management Call to Action”—from ITVMO director John Radziszewski. The letter explains the ITVMO’s multi-agency perspective, outlines the challenges, and details some of the specifics where applicable.

Excerpts from a letter from the ITVMO to a multibillion-dollar IT provider exemplify these calls to action:

“Price Escalation and Budget Planning

Agencies are concerned about rising costs in relation to other legacy technology providers. Furthermore, with these increasing costs, agencies are having difficulty in projecting and budgeting out-year expenses for both licensing and services. The federal government requires budget planning to be completed 2-3 years in advance of the budget year. When costs are unstable and unpredictable, this poses a problem for government customers who are bound by federal appropriation laws. Unfortunately, [the company] does not provide out-year maintenance pricing, with option years being subject to then-current prices. Without the ability to reduce (which is a common Enterprise Agreement (EA) term and condition), customers find themselves stuck with a contractual obligation without sufficient funding.

End User License Agreement (EULA) Confusion

Agencies have been asked, and sometimes pressured, to quickly sign new or updated EULAs soon after the start or during the course of a contract or be at risk of non-compliance. Aside from this practice potentially violating contracting rules and policies, it creates a distrust of [the company] and its resellers among agency personnel who feel squeezed by these requests after completion of good-faith contract negotiations.

Understanding Products and Stock Keeping Units

Agencies have reported significant confusion with distinguishing [the company’s] products and stock keeping units (SKU). They feel uninformed when it comes to product bundling and de-bundling and have a hard time finding a sole source of truth for active and available [company] SKUs to select from. In many cases, there are multiple SKUs for the same product without clear differentiators between them. If a customer is considering de-bundling a product offering, it can be quite challenging to identify the specific SKUs they want to keep.”

Call-to-action letters also include recommendations for what the federal government would regard as resolutions for each of these pain points. In the examples above, the ITVMO proposed that the company, “consistently respond to and work with agencies seeking budgeting support; clearer contract language regarding EULAs; and training and/or Q&A sessions on problematic product licensing.”

It concludes with a request for a meeting at which the ITVMO and the OEM can review and address the challenges presented. At that point, the communication phase transitions into the resource phase.

Resource Phase

The challenges and potential solutions presented in the call-to-action letter are the opening round of negotiations with the OEM. In the follow-up meetings that typically occur, representatives from the ITVMO and the OEM (including both legal teams) address workable solutions.

“As long as the OEMs are willing to partner, and we’ve been fairly lucky with that, then they are helping us address those challenges,” says Stier. “They’ll come back to us on certain things and say, yes; on certain things they’ll say, no; on certain things they’ll say, ‘We can’t do that, but we can do this.’ Then we figure out how to meet in the middle for the things to which they said a blanket ‘no.’ And normally, they come around in some way, shape, or form. It may not be what we wanted, but it’s closer to at least getting something that’s beneficial.”

Much of the time, the complexities in negotiations arise when matters like price breaks are at issue. If the ITVMO requests training and/or knowledge share—as is frequently the case—problems tend to be resolved without much conflict.

That said, notes Stewart, developing the training resources requires that ITVMO work closely with the agencies to make sure their needs are being met. “We want to make sure that we are really addressing the specific challenges that were called out in our discussions, and not inadvertently facilitating a sales pitch for the vendor,” she says.

Training Phase

What the ITVMO calls a training phase is more aptly an implementation phase. It’s the point at which the solutions developed with the OEMs are distributed and implemented across the government agencies. The solutions frequently take the form of training sessions. But “training” is a misnomer also because the sessions are reactive rather than proactive. “It’s really webinar sessions of information sharing,” Stiers explains. “It’s somebody coming and walking the agencies through some of the more complex issues.”

As an example, she highlights the issue of licensing from the multibillion-dollar IT company’s call-to-action letter.

“In the federal government, nothing works for us out of the box,” Stier says. “We have to customize everything because of the way we do business. Customizations can impact how upgrades are rolled out, or how connecting pieces of new services within one platform work together or don’t work together because of customization. When you talk about platform licensing, you really run into issues. Getting agencies to under-stand the complexity of licensing schematics is difficult. Data scientists have problems at times figuring out how licensing works together. A lot of it is having the OEMs really have in-depth discussions about specific things like that.”

However, as noted, such training is not the only kind of solution implemented in this phase. The ITVMO also puts together white papers, best practice guides, and other internal resources using subject matter experts and agency input that are placed in the OMB’s MAX portal (accessible only to users with verified .gov or .mil email addresses). This might also include OEM concessions, “where we have the ability to take one particular issue that’s a cost issue, that there isn’t an immediate fix to, and ask the OEM to address it from a federal government perspective,” says Stewart. “‘Can you work with us? Can you drive costs down here for this one particular issue?’”

It also includes what the ITVMO calls “office hours.” The term refers not to interface time with Stewart or the people on her team, but to vendors coming in on an informal basis. These vendors may chat with agency representatives about challenges, concerns, and opportunities they’re facing, or just engage, and answer questions. This is particularly useful in addressing more specific and nuanced issues that a single agency might be experiencing, Stewart notes.

Reporting Phase

Of course, for all the communication of assessed challenges to the OEMs, it’s the government agencies that are the intended audience for the intelligence gathered.

“To close out the assessment, we develop two final documents that go out to different audiences,” says Stier. “One is an executive memo that is for leadership, so our agency reps through the CoP will have something to take back to their CIOs (chief information officers) and say ‘They did something. They’re listening to us, they’re trying to help us, and this is what they found.’ And then we have a one-page flyer that’s for the people that are in the weeds working: the Cos (contracting officers), the CORs. What the challenges are, what we did and how we resolved it, and where to get all the resources that support their continuing engagement with the OEM.”

Where the OEMs Fit In

As noted, the ITVMO (and subsequently the CoP) is a government initiative, with membership open only to government employees. Nonetheless, “we’re constantly looking for opportunities to partner with industry,” says Val Ruark, who leads the contract support team. “While agency buyers are top of mind, vendors in the community are partners as well. There are a lot of opportunities.” The CoP trainings and office hours are the most obvious examples.

In addition, the VMO has partnered with the Coalition for Government Procurement and ACT-IAC Small Business Alliance in an initiative to promote small-business utilization. The initiative organizes engagement events for small business vendors. The next one is scheduled for March 2023.

The CoP’s first large-scale partnership opportunity will occur around the end of fiscal year 2023. “The ITVMO, as well as our partners, will be hosting a governmentwide summit open to both agency and industry,” Ruark says. “We haven’t locked in a date and a venue yet, but it will be the first of an annual, in-person event. It’ll be an opportunity to really get industry leaders’, practitioners’, and domains’ needs at the table with some of the agency buyers, and to hear a lot of what we’re working on, and problem-solve together.”

Stewart encourages contracting professionals to visit the VMO’s website at itvmo.gsa.gov, where they can subscribe to its mailing list, register for the CoP listserv, and view the latest updates. CM

Michael J. West is a writer and editor in Washington, DC.