The Homeland Security Department’s multi-billion dollar EAGLE II technology services contract is coming under fire by senior lawmakers.

Rep. Mike McCaul (R-Texas), chairman of the Homeland Security Committee, and Rep. Jeff Duncan (R-S.C.), chairman of the subcommittee on Oversight and Management Efficiency, wrote a letter to DHS Chief Procurement Officer Nick Nayak earlier this week questioning the agency’s entire solicitation process.

“DHS took too long to make the awards, failed to ask vendor companies to update their pricing with a best and final officer, neglected to consider successful past performance at DHS and made awards to some companies with questionable track records,” McCaul and Duncan wrote. “DHS took three years to award a contract that excludes many companies who have been working at DHS in favor of untested companies.”

DHS awarded 15 large companies a spot on the seven-year $22 billion Enterprise Acquisition Gateway for Leading Edge Solutions II (EAGLE II) program Sept. 30. DHS decided not to award many of the top companies under the current contract, including Raytheon, Northrop Grumman, Lockheed Martin and General Dynamics.

DHS spent more than $11 billion under the first EAGLE contract since 2006, including more than $982 million in fiscal 2011, the most recent data shows.

DHS already is facing the first of what many expect to be several protests under EAGLE II.

STG Inc. filed a protest with the Court of Federal Claims Nov. 1 saying DHS unfairly excluded the company from having a post-award briefing.

“Specifically, STG seeks a declaration by this court that the agency’s refusal to provide a debriefing to STG is arbitrary and unreasonable and an injunction requiring the agency to provide a debriefing to STG and suspend performance of any contracts awarded under the solicitation until it provides STG with such debriefing,” court documents stated. “Under the present circumstances, it is arbitrary, unreasonable and an abuse of discretion to deny STG a debriefing. The contracts in question have been suspended due to bid protests filed at the Government Accountability Office by three unsuccessful offerors, and there are likely to be additional protests as the agency concludes its debriefings of other unsuccessful offerors. Providing a debriefing to STG, therefore, will not delay the procurement or cause undue administrative burden to the agency. By contrast, STG would be substantially and irreparably harmed by the lack of a debriefing because STG, an incumbent contractor, would have no idea why it was not selected for award and would have no meaningful ability to file its own bid protest, should it conclude that sufficient grounds for protest exist.”

McCaul and Duncan are concerned that DHS is cutting out many of the key companies that have supported them for the last decade.

“A contributing factor to these questionable awards appears to be that requirements in the procurement were at such a high level and so poorly written that DHS put itself in a position where nearly every vendor company could meet the requirements,” the letter stated. “This makes it virtually impossible to distinguish the true capabilities among companies, and allowed untested companies to receive awards. Inexplicably, one of the awards went to a company that was previously suspended from federal contracting after wrongdoing in a FirstSource contract at DHS. The company submitted their EAGLE II proposal less than three months after they signed their Small Business Administration agreement allowing them to perform federal work again. This does not make any sense.”

The company McCaul and Duncan are referring to is GTSI, which SBA suspended in October 2010 and lifted it about a month later.

McCaul and Duncan asked DHS to answer 10 questions about how EAGLE II awards were made.

Among the questions are:

• Why did it take DHS three years to award this contract?
• Since it took so long to award, why did DHS not give vendors an opportunity to update their pricing with a beset and final offer?
• It appears DHS discarded past performance and went with lowest cost providers. Please explain why this is a good long-term acquisition strategy for DHS.
• The outcome of the source selection appeared to disproportionately negatively affect larger aerospace and defense companies. How does DHS believe that the companies awarded under EAGLE II can match the breadth, depth and performance on contracts of similar size, scope and complexity for IT work that many of these companies perform? What will DHS do to ensure taxpayers are getting the most for their money on these IT services?
• DHS has directed its component agencies to use EAGLE II for IT support services, however given the list of companies and their potential lack of ability to deliver mission-critical services, what is the incentive for a component agency to sue EAGLE II?

McCaul and Duncan also asked DHS to quantify how much money has DHS spent on preparing EAGLE II and how much DHS plans to spend through the contract in 2014.

“DHS will respond to the members of Congress directly,” said a agency spokeswoman by email. “Contract awards have been made in all nine EAGLE II award categories in an open and transparent process in accordance with best practices under the Federal Acquisition Regulation.”

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