Page 30 - FCW, August 15, 2016

NetCents-2
The remaining NetCents-2 con- tracts have combined to replace the Air Force’s original contract, which stopped taking orders at the end of fiscal 2013. The last day for delivering on NetCents-1 task orders was Sept. 9, 2015.
NetCents-2 is divided into Appli- cation Solutions, NetCentric Prod- ucts, and NetOps and Infrastruc- ture. Application Solutions and NetOps also have separate small- business contracts.
Liftoff for NetCents-2 was a bit bumpy. The first solicitations date to 2008, but successful bid protests and re-competes meant that some of the contracts were not awarded until spring 2015. But now that all five contracts have had time to gain momentum, agencies across gov- ernment are seeing the benefits.
The bulk of the business comes from the Air Force, which isn’t surprising because NetCents-2 is mandatory for relevant Air Force acquisitions. According to Robert Smothers, chief of the Air Force Enterprise Services Branch, the mandatory-use policy was the key to capitalizing on the service’s buy- ing power to drive down prices. It was also the best way to ensure that the service could manage IT requirements at the enterprise level, enforce network standard- ization, and ensure that future advances are interoperable with one another.
That standardization, in turn, generates operational and life cycle savings.
So even if a lower price can be found elsewhere, Air Force offi- cials decided a small price premi- um was worth the broader benefits. (See “No non-NetCents-2 vendors for you!”)
Other agencies have access to the contracts as well. NetOps and NetOps Small Business — which
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NO NON-NETCENTS-2 VENDORS FOR YOU!
A September 2014 memo decreed that there would be no waivers for Air Force buyers to use other acquisition vehicles for any product, service or solution offered through NetCents-2.The Air Force has anticipated and addressed the “But it’s cheaper!” objection in its frequently asked questions:
How is placing the order with the higher-priced NetCents-2 vendor rather than the lower-priced non- NetCents-2 vendor providing best value for the Air Force? How does this promote competition in the market?
The decision to make the use of Net- Cents-2 contracts mandatory, including the Products contract, was driven in part by the need to gain visibility and control of IT/net-centric product purchases. For example, the end-of-year spending rush
has sometimes resulted in the purchase of obsolete or near-obsolete equipment. The benefit of having visibility and con- trol outweighs the potential small cost increase for individual products.
However, part of the terms and con- ditions of the contract is that the con- tractors will not offer lower prices for products anywhere else. Furthermore, contractors are selected competitively and task/purchase-order awards will be made on the basis of competition within the pertinent NetCents-2 awardee pool. NetCents-2 also requires compliance with requirements such as theTrade Agreements Act and no gray market agreement.
That said, examples of lower pricing on \[commercial off-the-shelf\] items out- side of NetCents-2 should be provided to the program to help identify any needed changes in strategy.
NETCENTS-2 BYTHE NUMBERS Note: All numbers were calculated as of the first quarter of fiscal 2016.
$20.1 million
Value of the largest task-order award to date
75
Number of unique contractors awarded task orders
109
Number of task orders awarded by the Army, DHS, Navy and DOD agencies
$10.4 million
Value of those 109 task orders
166
Number of task orders awarded through the NetOps contract
276
Number of task orders awarded through the Applications contract
6,463
Number of task orders awarded through the Products contract
645
Number of task orders awarded by the Air Force Life Cycle Management Center
6,900+
Number of task orders awarded since the first contract was awarded in fiscal 2011
$233,000
Source: Deltek
Value of the average task order