The Defense Department plans to embark on another multibillion-dollar information technology contract competition destined for a single contractor, according to materials released on Aug. 21.
This week’s Top 20 Opportunities will focus on the Pentagon’s proposed $11.7 billion Defense Enclave Services, which would merge a number of IT functions at the Pentagon’s civilian-led agencies, collectively known as the “fourth estate.”
DES’s sizable ceiling value and complex contract scope will likely spur interest from most major technology vendors and systems integrator in the DOD market. The proposed contract calls for consolidating IT services, such as network management, IT infrastructure, cloud computing, and help desk services, onto a single ten-year contract managed by the Defense Information Services Agency (DISA). The move will help the Pentagon cull duplicative spending, remove silos, integrate IT systems, improve access to the latest technologies, and enhance information security, according to a slide presentation DOD officials shared at a July 30 briefing to industry.
“Our role here is to migrate these Defense Agencies from their legacy commodity IT networks to a single network we’re calling DoDNet, which DISA will operate,” program manager Col. Chris Autrey, told attendees, according to a transcript released Friday.
The Pentagon plans to release a draft request for proposal as soon as the end of August, with a final draft expected in September, according to DOD officials at the industry day. Responses will be due sometime in the first quarter of fiscal 2021. An award is slated for early fiscal 2022.
Sizing Up Competition for DES
DISA hasn’t yet released the full details of the contract, but the industry day slides offer insights to the agency’s acquisition strategy. The Pentagon will use four yes or no criteria to screen proposals for acceptability: adequate personnel to staff the contract, authorization to operate on DOD networks, compliance with the DOD’s new Cybersecurity Maturity Model Certification (CMMC), and a plan to partner with small businesses for a large share of the total contract value. For bids deemed acceptable, DISA will use a combination of technical and management factors, past performance, and pricing to determine the single winner.
With DES, DISA appears to be testing out a novel approach to promoting small-business participation in such a large deal. All large businesses must complete a small business plan outlining how they plan to comply with “aggressive” minimum quantitative requirements (MQRs) for each socio-economic category based on the total $11.7 billion value of the contract. Large bidders must forge partnerships with small businesses if they have any hopes of winning the contract. Bidders unable to outline exactly how much business or what kinds of work they intend to subcontract to small businesses, and lack “acceptable rationale” for not meeting the MQRs, will have their bids immediately disqualified.
Since the start of the 2016 fiscal year, the Pentagon’s fourth-estate agencies have spent about $28.1 billion on IT products and services, with DISA responsible for about $13.3 billion, or 47% of those obligations. Small businesses have accounted for $9.4 billion, or about one-third of all fourth-estate IT obligations since fiscal 2016. The top small business IT vendors over that span include By Light Professional IT Services Inc. ($291 million), VAE Inc. ($249 million), Advantaged Solutions Inc. ($237 million), and Knight Point Systems LLC, a subsidiary of Perspecta Inc. ($218 million).
Another ‘JEDI’ in the Works?
The DES contract is already drawing comparisons to the contentious Joint Enterprise Defense Infrastructure (JEDI) cloud computing contract, another single-award acquisition valued at a maximum of $10 billion over ten years. JEDI procurement has been a lightning rod from the get-go: several contractors criticized the Pentagon’s winner-take-all approach, while others claimed its gate criteria excluded all but a handful of companies from competing. Separate legalchallenges by competitors Oracle Corp. and Amazon Web Services Inc. allege undue political influence over the contract. And although the Pentagon awarded the contract to Microsoft Corp. in October 2019, JEDI remains mired in federal court with an injunction preventing work from going forward.
DES’s $11.7 billion ceiling value, its single-award status, and its use of screening criteria, including use of the CMMC, will probably invite similar interest and scrutiny from the industry. Bloomberg Government subscribers can check the “Alert” icon on the DES opportunity page to stay informed on up-to-the-minute news and updates throughout the acquisition process.
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