Tumultuous Tulsa

Rev 1.1

Tulsa is the home of the Golden Hurricanes but that is not where the turbulence is. I was intrigued by several postings and circulating opinions that some event occurred up in ENGlobal’s Tulsa Government Office. I looked into those claims and now have some facts.

Tulsa, OK - ENGlobal Government Services

Several former members of the ENGlobal Government Group said that a massive resignation and walkout has occurred in the Tulsa, Oklahoma office by the Senior Program and Project Management Team, System Integration Department Head/Project Manager, several Systems Analysts and the Sr. Electrical Engineer. No details are revealed. The only fact known is that management fired one key manager which resulted in the resignation of multiple other key managers.

Any other details are really unnecessary anyway. Let’s examine just that basic information. The fact that one member was fired and many others left fairly quickly indicates several important psychological facts:

• There was sharp disagreement with management.

• The disagreement was deep enough to fore go fears of unemployment. There may have been a longer history of discord between management and the team indicating misunderstanding and poor relations. It is well known this team made high profit for many past years to present – you may draw your own conclusions.

• There is a strong emotional and support bond within this group – they stand together. This usually means they performed as a group well, which is typical for long-term government contracting. There is usually a great deal of respect between the government and long-lived groups.

The firing triggered a cascade of resignations that could impact performance on past and recently awarded contracts. Will ENGlobal eventually lose the contracts without the team? No one can be absolutely sure but with that much central talent gone it should severely impact performance. I will discuss my experiences. Having performed some government contracting in the past I know that if a contractor has not paid vendors and/or cannot perform work or convince the government of unfettered performance the contract will be cancelled for "non-performance" or "convenience". This happens rather procedurally and relatively fast once the government gets any red flags. If the government hears of this walkout it will be on alert and they will look for any performance issues. All government actions are based on performance on the contract.

If performance issues are noted the first step is for the government to issue “Cure” letters. If the issues from those letters are not remedied then the next step is reached. That step is “Show/Cause” notifications. If these are not actively engaged and solved then “Notice of Termination” results. This process is very procedural, paced and the government provides adequate time for reflexive action. Note: The opinion of the contractor that is having problems will always differ on the latter point. If you act slowly or ignore the government the termination comes justifiably quicker. The government pays on time and quickly (~ 10 days) – you should not waste their time or fair procedure with excuses or silence. 

When a government contractor loses team members it cannot simply replace any single team member with another Program or Project Manager, Analyst, Engineer, etc. Why? This is due to the fact that the government will not accept or approve of just any person filling those roles. The government has a serious responsibility to U.S. taxpayers to spend money wisely with tight controls. Contracting team members that they will approve of are very professional and have pedigreed resumes by working up to those positions under previous government contracts and have a history of accepted performance.

So what will ENG corporate do now?

One, they can refill those positions with government approved personnel and continue to service the contract. If ENG is able to refill the positions and continue to service the contract, it is doubtful that they would continue to receive the same quantity of work that the previous experienced team was able to win.  ENG still has to bid this work against other contract awardees and these other firms are likely to be a beneficiary of this situation.  If this occurs revenue from this group will start to decline.

ENG might try and pick up new work in other Government sectors, however their current financial situation will make this difficult.  It is doubtful other Government agencies will want to risk new contract awards to a company struggling financially.

If they cannot do the above then, two, they can sell the contract, before they lose it, to a group properly registered to do government work. Remember, there are other awardees on that same contract also.

Three, they can lose the contract with little value. The actual contract value to ENG is $8,333.00 with the huge balance not presently awarded. Yes, even though millions were touted those contract blocks have not been awarded yet! ENG may try to attract the group back with more money but the factors that led them to quit would remain.

Good luck to everyone.