Winning Task Orders on IDIQs is challenging and competitive enough. But, it is extremely challenging and competitive in the construction industry. As a Prime General Contractor you have to work with a vast sea of construction subcontractors, locally based, to deliver bids that are won on lowest price technically acceptable terms.
This article will describe how one construction General Contractor leveraged R3’s software and services to create a special-purpose system that would allow it to optimize their way of working and scale their AEC MATOC Task Order business.
The customer is a mid-tier division of a larger General Contracting construction firm. This division specializes in Federal Government construction projects. They do most of their business through specialty IDIQs referred to as AEC MATOCs (Architecture, Engineering, Construction (AEC), Multi-Award Task Order Contracts (MATOC)). The AEC category of Federal business historically is in the top 5 of all discretionary spending categories. The construction portion alone averages spending of $30 Billion per year.
They are a Prime on about 10 different AEC MATOCs. They had always managed this work manually. General Contractors have a different Task Order process because they need to work with a vast army of specialty subcontractors to get local bids for each element of the project. All of this GC bidding work needs to end up in a bid submitted on time and at lowest price to win.
The problem is that the Federal Government has a very big spike in AEC Task Orders at the end of their Fiscal Year. Our customer was not able to scale to meet the spike and maintain quality. At much as one-third of the opportunities that they could have bid just didn’t get bid or were bid under circumstances that jeopardized the quality (technical response, price, risk). They needed a way to automate the process, improve productivity and quality in order to be able to scale the business to bid more and win more.
Like most General Contractors they had an online Bid Room to provide subcontractors with the detailed information they needed to prepare formal construction bids. However, this system was provided by a third party vendor and was separate from the Task Order process where the work was done to prepare responses.
What they wanted was a single, integrated Task Order system that would merge the worlds of IDIQ Task Orders with the required General Contractor Subcontractor Bid Management processes. They also wanted the full system and information to be within their organization (on-premise). This way the subcontractor database and historical information would all be at their fingertips. It was envisioned that such a system would enable them to scale to meet the spike, capture more business, do it better, and of course beat the competition who would not be able to perform at this level.
In their search they found R3’s IDIQ Task Order Management system. It provides all of the core capabilities required to support the full lifecycle of Task Orders. This includes the all important part of building and efficiently conducting reviews and getting approval to submit the Technical and Pricing sections of the Task Order Proposal Response.
However, they needed changes to accommodate the needs as a General Contractor. They needed to replace the existing “Expression of Interest” partner survey process with a full featured “Invitation to Bid” (ITB) process to support the work with subcontractors. They also need support for the lifecycle of Bid Tendering – managing the many bids and selecting winning bidders. These needs met that instead of working with 5-20 teaming partners of a typical IDIQ, this system needed to support working with more than 200 construction subcontractors selected real time out of a database of more than 4,000. It also had to support the iterative cycle of bid tendering with ongoing updates to plans and specifications.
Even further, the customer wanted to add some “special sauce”. They wanted a much more open Subcontractor portal. Out of the box the R3 solution has a separate, secure partner portal requiring unique user authentication. So do almost all online General Contractor Bid/Plan Rooms from third party vendors. This limits the number of bids from subcontractors as they are not all “digital natives”. Think construction. Since this solution would be hosted by the customer, they instead wanted an intelligent “anonymous” subcontractor portal that would not require users to log-in but that would allow the system to target information to them individually. And, they also wanted to support the pre-registration of subcontractors via their portal. In their business, they are effectively building a database of subcontractors that is a major asset to the organization.
R3 was able to meet these requirements. The base solution was a combination of the R3 IDIQ Task Order Management system and the R3 Subcontractor Administration add-on. These were enhanced and extended in their production environment to meet their GC Bid Management and Subcontractor Portal requirements.
How We Did It and the Result
The implementation followed our standard three phase approach when we have significant custom enhancements to our solutions.
Base Solution. The first phase started with implementing the base solution within their existing on-premises SharePoint environment. The base solution was available within a week and ready to be used. The core team was then trained on the base system through a series of “workouts” which are focused sessions that target specific parts of the process. Each workout serves to both train the user and validate the requirements or decide on changes.
Enhancement Development. The second phase was the development to meet the custom requirements for Subcontractor Bid Management process and the Intelligent Anonymous Subcontractor Portal. We used the R3 Joint Development approach in which we share costs. This reduces the risk and cost of the customer and enables R3 to use the generic enhancement with other customers. The work was done in the production environment so that the customer could test iterations in real time and experience how the changes worked as part of its integrated process. The work lasted about 6 weeks.
Rollout Preparation. The third phase was the training in preparation of rollout. A selected team was trained and performed “work outs” of the system following their process. Out of this work they created their set of “protocols” (documentation/policies/procedures) for operations. This ranged from their security policies to handling exceptions in bid tendering. Then, we did Administrator training and Power User training which empowers them to be able to use the built-in configuration wizards to make changes to the system on their own.
The new system is now being rolled out to all Regional divisions, opened up to partners and commencing operations. This rollout is being conducted by the core team who will also provide ongoing user support.
The big peak of Federal Government AEC Task Orders won’t happen until the summer which is 6 months away. They have the time to work on Task Orders at low volume and perfect the system and their way of working internally and with subcontractors. When the spike hits this summer they are far more prepared to bid more Task Orders and submit higher quality bids that are both lower cost and less risky.
Click here to learn more about the R3 IDIQ Task Order Management system. If you are a General Contractor participating in AEC MATOCs you now have an off-the-shelf option for a system that integrates the General Contractor Bid Management processes with your Federal Government IDIQ Task Order response process.