Technical Assurance Business Plan for Overcoming Too Many Eggs in one Basket

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The following SWOT Analysis was created during a meeting held by the author of this paper, and Technical Assurance’s Officers Will Roess President and Jim Solether, Vice President/General Manager, and Founder/Owner and Visionary Edward Taylor on October 17th, 2016. The results are as follows:

STRENGTHS

Long-term Contracts

Quick pay contracts-good cash flow and growth capital

Excellent contract performance scores for services offered

WEAKNESSES

Limited exposure to new business

Long time line to secure new business

Ability to identify new business opportunities

OPPORTUNITIES

DOE has provided national exposure

Securing new Fed work based on DOE success

Expanded network with large federal work contacts

THREATS

Too many eggs in one or two baskets

Major expense increase to manage growth

It would be devastating if we lose large contracts

The SWOT Analysis provided relatively clear results as to what the Company should do to limit their risks. Although losing one of Technical Assurance’s large contracts would be devastating, the large contracts were long term agreements and there were new actions that could be taken to limit this risk. Furthermore, if the opportunities presented for growth could be implemented this would help the Owner’s long range plan for business sale/transaction.

The greatest strengths associated with the large contracts was the length of the agreements, which ran until 2019 and 2020 respectively, with 3-5 year renewal options. The key for successful renewals and re-competes for the contracted work is primarily related to Technical Assurance’s ability to service these contracts at high performance levels. From that perspective the future success of these contracts was in the hands of Technical Assurance’s service providers. So it is critical that these contracts be well managed and protected. The greatest opportunities presented in the SWOT was to build upon the current growth by maximizing the new federal contract work and national exposure. Unfortunately there are some weaknesses associated with how Technical Assurance was currently securing new business and this weakness must be fixed in order for sustainable growth to be realized. Lastly, it is recommended that the leaders of TA have a “rainy day plan” (4) in place should they lose their large client abruptly, and/or an alternate plan should their large client downscale work for a period of time.

Recommendations:

- The two largest contracts held by Technical Assurance are their Core Market FirstEnergy account, which represents 24% of their Fee Revenue and the Federal Market DOE Contract, which represents 54% of their fee revenue. The DOE Contract includes pass thru construction dollars, and this one contract represents 88% of all combined TA revenue (fee and pass through). As Andrew Carnegie says, “put all of your eggs in one basket, and then watch that basket.” The following recommendations must be implemented to limit the risk of losing these accounts:

- Maintain long-term agreements/contracts with 3-5 year terms.

- Make certain there is more than one client champion for the service cause at all times.

- Make certain the services being delivered are always considered to be highly valued by the customer. Make certain TA is receiving high service score card numbers.

- Go the extra mile always. Make TA indispensable.

- Secure expanded and additional service work beyond current contract service description for each client to become more and more integrated within their operations.

- Diversify TA’s Client base:

- Grow TA’s core market (commercial, utility, Higher-Ed, healthcare) services through continued marketing and sales efforts.

- Research the possibility of smaller service company acquisitions that would expand TA’s customer base and client base.

- Build off of the Federal DOE Contract to gain additional federal market contracts.

- Hire a high-level national sales executive to head up the national sales growth and client diversification effort.

- Engage Federal consultants/brokers to make inroads into the federal markets.

- Leverage expanded network and national exposure with DOE national work to secure more client introduction opportunities.

- Rainy Day Plan:

- Develop a strategic rainy day plan that would be implemented immediately should one of TA’s large contracts get cancelled or suspended.

- Future Business Sale-Transaction:

- The recommended items 1-3 shall greatly improve Technical Assurance’s position when seeking a sale of the business (5).

- The recommended items must be implemented if TA wants to recognize their future 100 million growth plan.

Timeline:

- Long-term contracts:

- FirstEnergy Contract currently set through end of 2019. Work for contract renewal and 3 year extension starting in 2018.

- DOE Contract is set through 2020. Contract is to be re-competed in 2020. Make certain TA service score card ratings are very high, as they are today and prepare for re-compete starting in early 2020. Push for one year extension and a revised re-compete during 2021.

- Secure separate agreements with each DOE Site outside current contract. Timeline-continuous.

- Expand services with FirstEnergy. Timeline-continuous.

- Diversify TA Client Base:

- Create a marketing