Most large IT services providers sell Full Time Employees (FTEs). It’s great to have a team of ready-made, inexpensive(?), quasi-skilled workers at your disposal. But should you use the same provider to oversee and manage the teams?

Often, the primary goal of large IT services providers is to keep the chairs filled and churning. That is how they make money. To them, there is no end-result, it is a long-term services play. The longer the project goes, the better they do financially. If you want to innovate and get things done, though, you may want to consider having a smaller firm come in to execute special task orders to reach the finish line. These firms are often more knowledgeable, hungrier, and motivated to do more with less. They often have a much better track record of finishing on time, and on budget.

So Sorry, Not Sorry!

A few years back, we received a call from a large U.S. Department of Energy (DOE) site regarding their new “War” room. They had decked out this room with five 52” LCD touch screens, and they wanted to have a geo-visual map of their entire site. They needed to see all the structures, areas of interest, and work areas specifically defined and linked with legacy data that told the story of each specific site element. The DOE invited us to fly our team out, map out the requirements, and tell them what it would take to produce the solution. Of course, we were excited at the opportunity.

When we arrived, we found ourselves in a large room with a mix of DOE and large-contractor personnel. The requirements session went well; we fully understood the scope of what was wanted. We returned home, crunched some numbers, and offered a quote. Sounding a bit stunned, they immediately asked, “when can you start”? It was almost as if they didn’t think we could pull it off.

Five months later, we were back in that war room with the big touch screens, demonstrating the new geo-visual solution with all their schedule and legacy data integrated into the map. And once again, the room was filled with more than a dozen people including representatives from the DOE, the Prime contractor, and the Federal liaison between the two. As we went through the requirements list and demonstrated to the whole room that the solution was performing as specified, it suddenly became hard to read the room. Some people were clearly angry, others were happy, and others were confused – as were we. We asked, “Did we miss something?” After a brief silence, we were ushered into the hallway by the liaison. Somewhat concerned now, we asked what was wrong. It was then that they informed us that we were “Plan B.” The prime contractor had no belief that we could pull off the solution. Of course, we asked why.

We were informed that the Prime Contractor had been working on the solution for over 2 years(!) but were unsuccessful at even producing a prototype. They had recently asked for over another year and more budget to complete the solution. We had just completed what they had been working on and failed to produce for a fraction of the budget, and in a fraction of the time. We had the DOE confused, and now they were grilling the Prime Contractor over why a smaller vendor could complete something in 5 months that they couldn’t complete for 3 years. Naturally, the Prime was very angry with us because we had shown them up. Of course, that was not our intention; we were not let in on the “ruse” until we had already delivered the solution. But how do you think the situation was resolved?

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You would probably guess that the DOE would tell the Prime that they would be taking that portion of the project away from them and awarding it to the smaller company, right? In a rational world, that is what would happen, but not what actually occurred. Instead, the DOE thanked us for our work, paid us, and told us they’d call us if they needed us! They then proceeded to award the large Prime a six-month extension (and more money) and told them to finish the job. The Prime copied a large portion of what we did and delivered it, six months late, and over budget. Our solution, which was being successfully used was then torn out and replaced with the Prime Contractor’s version.

In many cases, large Prime contractors are often very poor at specific solutions, especially within large projects. Instead, they are good at placing FTEs and doing standard work, but specific innovative solutions are not their thing. They are not motivated to finish on time, and on budget. To them, that is leaving money on the table.

Often, smaller companies that can deliver innovative solutions on time, and under budget, are shut out of the process by the Prime contractors. Efficiency and innovation comes right off a Prime’s top-line revenue. When a smaller entity shows them up, it allows the DOE to see the Prime Contractor’s shortcomings. As a result, the Primes are disinclined to include the innovative smaller companies in their mix. If the DOE and Primes were smart, they would consider a different approach.

What if the Primes were required to identify each deliverable as a specific project within the overall contract and hire the smaller firms to project-manage each of those deliverables? They could help streamline better, more innovative, solutions and save a lot of money. In the meantime, the DOE could meet its small business contracting targets, often providing help to traditionally disadvantaged groups.

Just a thought. What do you think? We welcome any and all ideas.

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