Multi-award IDIQ Contracts, Are They Killing Small Business in America?

Interesting article. As already commented on by Mark Abel, it's one of many acquisition models. In a vacuum, clearly the shifts in how indefinite delivery contracts (IDCs) are competed have impacted small business. Of course, these same shifts impact large business as well. Clearly the bigs can afford the longer acquisition timeline than the smalls. But I would argue that looking at IDCs is one subset of a company's overall business development strategy. Any sales strategy should include tactical and strategic targets and opportunities. Every company should have three strategic sales targets (agencies or military commands). These strategic targets are not based on specific opportunities. It's based on knowing who buys what you sell, how much, and how often (propensity). The other side of strategic is engaging and winning a set number of IDCs (IDIQ, MATOC, SATOC, GWAC, etc.). There is no doubt that the future of government acquisition includes category management and strategic sourcing (which is where the growth in IDCs is coming from). While positioning and engaging IDCs, small businesses should be going after tactical opportunities. Some or many of these tactical opportunities are coming from the strategic engagement of the three strategic targets for that year. So no, I don't believe that the huge shifts in acquisition timelines are the reason for small business failure and exit from the market. I would agree that companies that don't understand how to position in the market and don't have a solid business development strategy will leave GovCon regardless of IDCs. More than half of small businesses that win IDCs don't make money anyway. Even when a small wins an IDC, the sales process and task order management process is like a foreign language. It's a different process. I often recommend that small biz identify their revenue target for the coming year and based on various factors including average contract value, bid percentage, and win rate (to name a couple), that they identify the number of bids / proposals per month and quarter. NONE of these numbers include IDCs. IDCs always have $0 value on a pipeline. But at the same time, every company should pursue one to three IDCs per year. But no company should be dependent on IDCs. There are exceptions such as GSA's FSSI program where if you're not on one of these IDC contracts, you're done in the federal market. But this is the exception, not the norm. By streamlining acquisitions has the government negatively impacted small business? Sure, in some manner. But if a company has a well planned and designed business development strategy, these changes are nothing more than the shifts companies have to make every year in the market. Just my two cents. Well, maybe four cents :)

Well thought piece on current contracting methodology and impact on Small Business. Makes you wonder how Small's survive the current process...

Although many small businesses are being driven from Government contracting due to the shift to IDIQ and multi IDIQ contracts there are some small businesses that have figured out the secret sauce and are experiencing phenomenal growth and graduating to larger business categories. I wish I had the recipe!

Brian you offer an interesting perspective. However, I believe the IDIQ contract is only one "tool" available to small business in the federal sector. While they must wait longer to gain access to those contract vehicles, they can still pursue business on the open market, using GSA schedules, bidding on set-aside competitive contracts, or subcontracting to large business. So, while it is certainly not beneficial to small business, I don't think the extended IDIQ awards will cause too many to walk away.

Great Observation.. Small Business is the focus of the issuing Government Contracting shop, however once awarded, we are no value added to the team.