Smaller is Swifter
ALLIANCE OF SMALL COMPANIES WORKS TO MAKE DEFENSE PROCUREMENT MORE AGILE AND COST-EFFECTIVE.
Several systems/software solutions companies have formed an organization aimed at increasing the role of small business in military contracts while also transforming the defense procurement process to make it more agile and cost-effective.
Ignite Analytics, Execuspec and RIIS Inc. formed the Swift Alliance in May to influence the structure and process of government procurement. The firms all share a stake in the Army’s Future Combat Systems (FCS) program; due to their common background, an alliance between the businesses was a natural next step. Embedded Plus and Avaliant are also firms in the alliance.
The Swift Alliance will explore the relationship between small businesses and larger companies such as Boeing, SAIC, BAE Systems and General Dynamics. It seeks to establish better relationships, support, education and communication for the founding three companies, larger companies and the aerospace and defense industry as a whole.
“We saw that because of our small business status and the quality of our staff, our three companies spent more time working with one another and found more compatibility between our ideas,” said Ashley Raiteri, founder and chief executive officer of Ignite Analytics, which provides focused solutions for complex problem domains. “We were on the same page with one another. We leveraged those relationships over an 18-month period to bring spectacular value to the customer and to the Army.
“Working with the alliance will allow all the member companies to find a way to remain competitive through targeted cooperation instead of simply pursuing Hobbesian self-interest,” Raiteri continued. New relationships will give the members more insight when negotiating their contracts, as well as offer the larger companies a deeper pool of experience and talent to work with. Swift Alliance members will support each other as allies instead of only acting as competitors.
PROCUREMENT SOLUTION
The Swift Alliance looks to develop a solution that will lead to more effective spending. Companies involved in the organization vow to build products faster, better and in the long term cheaper than the larger companies in the industry. Alliance members are small and flexible, which they say allows them to produce products more efficiently than many much larger companies.
The Swift Alliance’s first meeting turned into a discussion about joint government contracts between the members involving FCS. The partnership they established will allow them to bid for larger contracts that were previously handled by larger companies.
“The alliance’s ability to bid for larger contracts and complete them at a faster rate will ensure an improved efficiency with taxpayers’ money,” said Raiteri. “This in turn will ensure that our men and women in uniform are getting the equipment they need in a timely fashion and national domestic proprieties are still being met.”
The group’s goals are to:
• Pull together increased buying power for access to market research or shared health insurance.
• Influence government procurement of military systems.
• Form strategic partnerships amongst one another so they can begin to bid on larger government contracts that would normally not be available to a small business.
“We can improve our own processes together, learn from each other and learn how to work with different large companies,” added Bob Bagshaw, president of Avaliant, a systemengineering, -architecture and -design company that works mostly in support of prime contractors on government programs. “Because we have some breadth together and we work in different parts of the overall system engineering process, we’re able to bring a broader understanding.”
With overall federal fiscal issues portending constraints on the defense budget in the years ahead, Swift Alliance members say they are hoping to set an example that will lead to alternative methods of military spending. The alliance is thinking strategically about current industry practices, procurement processes, contracting standards and efficiencies of military spending.
For the alliance, it’s about efficacy of spending. “The current military procurement process is kind of broken. We’re spending too much money to afford the kind of Army we want to have,” Raiteri said. “We believe that increased use of small businesses on government procurement programs is not just the way to empower small businesses, but also to reduce the cost and increase the speed at which military systems are developed.”
Currently, about 10 percent of total defense dollars go to small businesses. The alliance would like to see 35 percent or 40 percent of this spending allotted for small businesses. Instead of small businesses being limited to the role of outsourcing solutions for the prime contractors, they would like be included in the larger, strategic discussion about how to spend government money.
“As a nation, we have to figure out a way to pay for this army, if we’re going to continue with today’s op tempo. We hope that the alliance can help work strategically to ensure an improved efficiency with taxpayer money, so that our men and women in uniform are getting the systems and equipment they need and national domestic priorities are still being met,” Raiteri said.
It’s the small business that has the ability to rapidly realign itself to the current priorities, the current technology that’s available and an ability to look at risk in a way that’s a little bit more daring than the larger businesses, advocates contend.
“The prime contractors simply are not investing in capabilities inside of their engineering organizations. They’re not focused on bringing their engineers up to speed with current technology, or on training their engineers to be able to respond to this rapid development schedule that the government and armed forces are requiring of us,” Raiteri
said.
PRIME COMPETITION
A key challenge for small firms wanting to work in the government procurement process is that the majority of the process has been structured around working with larger companies. Small companies frequently face significant hurdles to being part of that procurement process.
“There’s a lot of due diligence that’s done in order to ensure the authenticity, credibility and viability of smaller companies in dealing with the direct government contracts or indirect through a LFI or prime contractor; you still have to provide the justification for the work you’re proposing to do on their contract,” Bagshaw explained.
“The government currently does a lot of work using the earned value management system, which maps dollars spent to accomplish the work you’ve planned on schedule, which can be a valuable approach to managing contracts,” Bagshaw said. “On the other side of that, there’s quite a bit of overhead to doing that for a small company in understanding how the earned-value management system works.”
The group is starting with some lobbying, trying to work with each congressional district where there’s a member of the alliance. They are looking at specific contracts and government programs where the alliance can join together and make a bid. The team is also looking at expanding membership, determining which companies might add value and complete the catalog of capabilities.
“We have to be careful not to have too much redundancy in the alliance membership. This is an invitation-only organization,” Raiteri said. “We’re looking at microsensor companies, fabrication companies and some other systems and software engineering companies whose specialties don’t overlap with the existing member companies.”
New members increase the viability of the alliance. “It will allow alliance members to collaboratively and collectively respond to government procurement opportunities that an individual small company may not be able to handle, but if Ignite Analytics or Avaliant decide to collaborate on something, that certainly makes us stronger and more credible,” adds Bagshaw.
With a successful collaboration between several small businesses, Alliance members believe it is possible that they could compete head to head with larger prime contractors. They argue that a relationship between smaller companies would be more costeffective, and the quality of the product and the speed at which it’s developed would be increased.
“The alliance will learn more about how to work with the government effectively than how to use existing approaches that the government has more effectively. The alliance will make huge changes in the way the government does business,” Bagshaw concluded.
Planned outreach activities include cooperative engagement with the National Defense Industry Association and joint publication of white papers for submission to the International Council on System Engineering. ♦
