Jerry Demony, a retired Army colonel, suffered back and other injuries during his tour of duty that left him more than 50% disabled. Veterans agency looks beyond EMC for multi-million storage deal Demony and cofounder Phillip Oakley, a 22-year Army veteran who retired as a Major, formed i3 Federal in 2005 to take advantage of a government set-aside program aimed at Service-Disabled Veteran-Owned businesses, dubbed SDVOs in federal contracting parlance. Today, Demony is a partner in i3 Federal, a Fairfax Station, Va., reseller that's winning millions of dollars in federal IT contracts each year because of this disability. Oakley is awaiting his own disability rating due to multiple injuries including skin cancer that he experienced during his military career. "We do $8 million to $10 million in sales a year," from an SDVO contract open to all federal agencies, Oakley says. "Other companies come to us to do deals because of our SDVO status.
Although federal agencies aren't meeting this 3% goal, they're still sending billions of dollars a year to firms with the SDVO designation. It definitely makes a difference for us." Since 2004, U.S. government agencies have had a statutory goal of sending 3% of their prime and subcontracts to SDVOs such as i3 Federal. The owners of SDVO firms have a range of disabilities, from having shrapnel in a leg to suffering from Agent Orange poisoning to having multiple artificial limbs. The federal SDVO program is big business. To qualify for SDVO set-aside contracts, firms must meet federal requirements as a small business and must be owned and controlled by one or more service-disabled veterans. In 2008, federal agencies awarded 215,806 contracts to SDVOs (across all industries, not just IT) for a total of $6.4 billion.
Not surprisingly, the two agencies that send the most business to SDVOs are the Department of Defense, which awarded $3.3 billion in SDVO set-aside contracts in 2008, and the Department of Veterans Affairs, which awarded $1.6 billion. The SDVO sales figure represents 1.5% of all federal contracting dollars, according to the Small Business Administration. "This program was amplified by the Bush Administration, which wanted to send more contracting dollars to small businesses whose owners were injured during active duty," explains Ray Bjorklund, senior vice president of FedSources a market research firm. The Defence Department's SDVO awards represent 1% of its overall contracting dollars, while VA's awards represent nearly 12%. "The VA has been quite successful at this program," Bjorklund says. "The VA has had an executive agent role to ensure that programs were in place to connect disabled veteran-owned businesses with government agencies." Many agencies purchase IT gear from SDVOs through a government-wide contract called Solutions for Enterprisewide Procurement (SEWP). SEWP has six SDVO firms, including i3 Federal, that are listed as prime contractors. "I3 Federal's sales are almost completely off the SEWP contract," Oakley says. To support SEWP, i3 Federal has grown to include 15 employees scattered around the country. I3 Federal resells equipment from Cisco, IBM, HP and others on the SEWP contract. More than 60% of i3 Federal's SEWP sales are to the VA. "The best thing that VA does is emphasize that 10% of all their printer purchases must go through the SEWP contract to SDVO firms," Oakley says. "The VA gets it.
The VA almost exclusively contracts with veteran-owned businesses." Another SVDO firm that's benefiting from set-aside contracts is Alvarez & Associates, a Washington, D.C., IT firm that was founded by Everett Alvarez Jr., a Naval aviator who spent more than eight years as a prisoner of war in Vietnam. What's the VA for but to support veterans? Alvarez & Associates is another prime contractor on SEWP. The VA recently awarded a $10 million storage deal off the SEWP contract to Alvarez & Associates, which in turn subcontracted the work to Vion and Hitachi Data Systems. Bob Bruce, vice president of federal sales with Vion, says winning the storage contract through Alvarez & Associates represents the company's first big deal with the VA. "It's a significant win for Vion," Bruce says. "We're Vietnam veteran owned. Vion is a systems integrator based in Washington, D.C., that is owned by Marine Corps veterans but doesn't qualify for SVDO status. The owners work in the company every day, and they are very proud of their service in the Marine Corps." The SVDO program is not without controversy.
Bjorklund points out that SDVO firms are entitled to bid on these federal set-aside contracts, even if most of the work passes through to the subcontractors. "For the large firms, it can be almost like a dating game where they are looking for an SDVO prime to pass their business through," Bjorklund says. "Sometimes, far more than 50% of the work is done by the subcontractors, and that is hurting the prime." Some observers complain about awards such as the VA's storage contract with Alvarez & Associates because the majority of the business goes to subcontractors such as Vion and Hitachi rather than to the winning SVDO firm. "When the big providers use SDVOs just to win the contract and do all the work themselves, the program works in some capacity but not the way it was intended to," Oakley admits.
0 comments:
Post a Comment