Neil Albert, vice chairman of MCR LLC, oversees strategic operations at the McLean, Va.-based professional services contractor and led the company as CEO from 1999 to 2012.
Albert previously spoke to ExecutiveBiz one year ago to overview his 26-year career at MCR and discuss the evolution of the GovCon market during his almost three decades of experience in the sector.
In this conversation with ExecutiveBiz, Albert offers a forecast of what he thinks GovCon stakeholders should expect to see in 2015 and why he thinks MCR’s position on the OASIS contract vehicle could be a “potential catalyst” for the company.
ExecutiveBiz: What is the biggest change in the market that you’ve seen within the past five years?
Neil Albert: No question, it is the commoditization of the government professional services business. It has gone from being a major factor for ensuring the customer meets its mission goals, to the view of government leaders that we are too costly and cannot distinguish ourselves amongst our competitors. We and other companies have been categorized as no different as those who provide janitorial services or facility maintenance.
I certainly do not want to diminish that type of work but I do think there is a difference in how you buy janitorial services compared to technical and solution based services such as provided by MCR. The challenges we address are often complex and speak to the risk program managers face in executing their programs. By performing strategy development and performance improvement analysis, we help program managers be successful by providing critical solutions to help them make important acquisition and organizational decisions.
Clearly providing specialized technical expertise to solve highly complex problems must provide a distinctive difference. We do not bring commoditized support to our customers. We provide transactional or transformational capabilities, which require highly skilled and proficient individuals, many of whom the government find hard to hire because of their abilities.
Unfortunately, the government’s view is that acquiring services must be done through low price technically acceptable competitions, where measuring performance is not the evaluation factor, but who can get to the lowest price regardless of whether they can execute or bring real value. In my opinion, the government can use solution based factors to distinguish the competition and the results can be measured by the impact our efforts have on the results achieved.
On top of the commoditization, numerous government and industry reports are forecasting a reduction in contractor and civilian employee support over the next few years. I have to ask the question, who is going to get the job done? As the government loses their most capable individuals to retirement and reductions in force, fewer and fewer people will have the skills and knowledge to support each programs’ decision making process.
It is companies like MCR that can make a difference and can distinguish itself by providing the solutions necessary to meet these critical demands.
ExecutiveBiz: Where does MCR’s position on OASIS contract vehicle fall into the firm’s larger federal market strategy?
Neil Albert: It is an important part of our strategy moving forward. It will help us grow as an organization and add critical capabilities and functionality to increase our market share. We were fortunate to win all the pools we were qualified to bid — 5A, 5B and 6 — in the small business domain and pool 6 in the large business domain. As a mid-tier company, unable to compete in all small business set-aside opportunities, we see OASIS as a potential catalyst to extend our business base and enter the next level of business support.
Last year our pipeline of qualified opportunities expanded more than ten times its value than in previous years; a large portion of that was due to OASIS. We may not bid all of these opportunities but compared to the last four years, it’s a welcome change. We are establishing a program management office focused only on OASIS and the opportunities that come with it, for all pools.
At this point in time, other companies are not as fortunate to be a part of OASIS, but it does not eliminate the huge amount of competition vying for this work. We see OASIS as a means to transform our service offering and to open up a larger and broader market opportunity for us.
ExecutiveBiz: How do you see contract vehicles like OASIS evolving in the near future?
Neil Albert: OASIS is a means to an end and ultimately customers will find a way to use it. Unfortunately I see the low price technically acceptable type contracts, whether fixed price or cost-plus-fixed-fee, continuing for the foreseeable future. I believe they will have to start evolving into using a more mature approach to the evaluation and determination of the awardees. Government program managers are getting weary of seeing high turnover, lower-skilled, underpaid contractor support which hurts their program and their ability to get the required job done.
The first and most apparent change that I have seen recently is the addition of “cost realism” in the evaluation criteria. In some cases, you are seeing salaries bid that make McDonalds look like a better financial choice for which to work. This is a sad commentary on our industry. But the government program managers have caught on to the problem.
Although salary creep has occurred in many of the labor categories we provided in the past, this was as much perpetuated by government requirements as it was by contractors not maintaining a healthy environment where employees had a chance to work in multiple and diverse programs, while growing their skills.
I believe contract vehicles will start to find their so-called level of comfort where both industry and the government are meeting their needs at a fair price, with a reasonable assessment of their qualifications.
ExecutiveBiz: What attributes does MCR look for in small business partners?
Neil Albert: Even though in some cases we are considered a small business, teaming with small business partners is an important aspect of our culture. We look for companies that are confident and complement our skills so that together we are able to offer our customers the full range of capabilities to meet their needs. We want our relationship with partners to be cooperative, collaborative, and financially rewarding.
We hope to find partners who strategically and ethically match our goals and objectives, and look out for the future of the relationship. We do not want these relationships to be one and out. Instead we are looking for long-term relationships that we can depend on for the future of both companies. We have established a strategic sourcing process, where we can go-to market with our partners to support key opportunities.
Using this collaborative process. we are able to improve our market impact and potentially optimize performance, as well as increase our socio-economic goals. Vetting these companies is critical and we must also recognize that, at times, they may be competitors. But we recognize that together we will be a stronger and more viable contender for any chosen opportunity. We are fortunate to have numerous small companies as our primes and subcontractors. It is a major part of our success and we appreciate their contributions to our collective accomplishments.
ExecutiveBiz: What is the trend we should keep an eye on in 2015?
Neil Albert: We should keep an eye on two things – one is a trend and the other is a set of actions. The trend is the convergence of technology with the government professional services market. While we must continue to bring smart, innovative, and talented people to support our customers, we must also bring the tools and technology needed to increase scalability, deploy new services, and improve performance. This allows us to be more efficient and effective in solving problems.
The use of technology will benefit everyone in the long term by helping increase productivity and innovation which is so desperately needed in today’s environment. The government is continually looking outside our market towards commercial companies for new and creative ideas to solve their problems. We hear that our government customer does not want to use the same companies that have been in this market for years, but would rather go outside our market to more commercial companies who can potentially provide new ideas and processes.
Unfortunately, entry into the federal marketplace for commercial companies is mired with regulation and oversight. Commercial companies are not interested in being audited by DCAA or having reduced profits since contractors cost too much. However, we can help get the ideas and innovation the government is looking for in two ways.
First, bring more commercial companies on as subcontractors and, thereby, offering new and innovative ideas as part of the team. It also minimizes the barrier of entry for these companies. The second is to diversify and transform our companies to provide more technological solutions combined with specialized services. Either way the government will benefit from this convergence of technology and services.
This leads me to the discussion of actions that need to be taken in 2015. We cannot get new ideas or innovation in government without implementing “real” acquisition reform into the federal agencies. Last summer I fortunate to help lead the Professional Services Council’s effort to respond to the Defense Department and the House and Senate Armed Services Committees’ request for ideas and areas for improvement in the DoD acquisition process. PSC’s response was sent to the Hill as were other industry association responses.
This was the first time I have seen all sides of acquisition reform — government, Congress, and industry — working together to offer initiatives that will impact more than DoD, but all federal agencies. As a result, we may see legislation on some portion of those initiatives this year. If so it will lead to follow-on initiatives and more legislation to improve on the way DoD does business and ultimately extend into the civilian agencies.
PSC recently established a number of executive advisory boards to address this and ongoing acquisition business management and technology initiatives, in support of the DoD and Intelligence communities, civil agencies, and international development companies.
As chairman of the PSC Defense and Intelligence Executive Advisory Board, I, with other industry leaders, have been identifying where improvements can be made and new initiatives be identified so money can be saved, but also how we can streamline business processes using new techniques including the convergence of technology and services.
The “as a service” model could well be the vision of the future. If we can just start that process in 2015, we can truly help shape a better government and industry partnership for years to come.