27 vendors protest awards under DHS $22B IT services contract

Unsuccessful bidders of one unrestricted portion of the EAGLE II contract are taking their arguments to GAO to try to get a spot on the multiple-award contract....

A downpour of protests hit the Government Accountability Office this week over the Homeland Security Department’s decision to award 15 companies a spot under the one of the unrestricted portions of its EAGLE II IT services multiple-award contract.

As of Friday, 27 unsuccessful bidders filed bid protests with GAO with the goal of trying to get a spot on what could be a 7-year, $22 billion contract.

Ralph White, GAO’s managing associate general counsel, said it’s too early to determine any trends for why the companies filed protests. He said, however, all of the losing bidders have to be protesting DHS’ evaluation of their proposal and conclusion as to why they shouldn’t get an award.

GAO has until March 19 to decide on the protests.

DHS announced the awards to 15 large firms Sept. 30, the day before the government shutdown.

DHS EAGLE II Contract Award Winners under FC-1
Company Total Evaluated Price
Allied Technology Group, Inc. $358,463,816.05
Apptis, Inc. $475,503,008.19
Attain LLC $497,467,816.03
BAE Systems Information Solutions, Inc. $410,743,452.07
CACI, Inc. – FEDERAL $378,957,366.95
CSC NPS/ESI $498,676,620.56
GTSI Corp. $455,613,962.54
HP Enterprise Services $431,774,236.71
International Business Machines Corporation (IBM) $426,813,141.78
L-3 Services, Inc. $384,760,269.79
NCI Information Systems, Inc. $297,502,202.80
Perot Systems Government Services, Inc. $473,989,016.20
Phacil, Inc. $337,783,902.38
QinetiQ North America, Inc. $392,897,628.21
Serco Inc. $389,584,205.04
Source: DHS email to all EAGLE II bidders

“Contract awards have been made in all nine EAGLE II award tracks in an open and transparent process in accordance with best practices under the Federal Acquisition Regulation,” said a DHS spokeswoman by email.

The government shutdown delayed the debriefings to the unsuccessful bidders. In a response to questions from Rep. Mike McCaul (R- Texas), chairman of the Homeland Security Committee, DHS said it sent out “comprehensive written debriefings” on Nov. 29 to all those unsuccessful bidders who requested it.

DHS also told McCaul, “Each debriefing included a detailed summary of the evaluation of the offeror’s proposal, responses to the offeror’s questions and the rationale for why the offeror was or was not selected for award. Additionally, DHS has a procurement ombudsman and industry liaison within the DHS Office of the Chief Procurement Officer with an open door policy to meet with industry.”

McCaul wrote to DHS about the EAGLE II awards on Nov. 11, asking a series of questions about the agency’s decision-making process.

One vendor source who received one of those debriefs said DHS’ email was less than comprehensive. The source, who requested anonymity because their company still hoped to win work with the agency, said the debriefs didn’t provide any details of the company’s weaknesses. Instead, it just focused on the strengths.

“I think DHS’ goal was not to highlight any problems so you can’t protest the perceived weaknesses,” the source said. “This isn’t done a lot. I think the old Immigration and Naturalization Service did it years ago for an IT services contract.”

The companies protesting to GAO include many household names such as Unisys, Raytheon, CGI Federal, Lockheed Martin, SRA, Northrop Grumman and SAIC. The industry source said one reason many of these companies were unsuccessful could be tied back to the price they bid for the work.

A document obtained by Federal News Radio shows all 15 winning bids were under $500 million with NCI Information Systems coming in at more than $297 million on the low end and CSC coming in at more than $498 million on the high end.

DHS calculated the total price based on labor rates submitted by each vendor multiplied by the applicable evaluation hours over all seven years for both work at the contractor site and work at the government site. DHS also added the costs for materials, subcontracts and other direct costs, including travel, for all seven years to get the total price of the bid.

DHS pushed back against the idea that it was only after lowest price in its responses to McCaul.

“Proposals were evaluated on the following non-price factors in descending order of importance: corporate experience, past performance, program management, staffing, and small business participation approach (for other than small businesses). Past performance was the second most important non-price evaluation factor after corporate experience,” said DHS Chief Procurement Officer Nick Nayak in the letter to McCaul. “DHS conducted a comprehensive evaluation of past performance, including the receipt and evaluation of questionnaires from offerors’ references. The combination of these non-price factors was considered significantly more important than price; however, under all best value awards, price is a key consideration in assessing the value to the government and the taxpayer.”

McCaul also questioned DHS’ approach to EAGLE II, including how long it took and why the agency didn’t go back to the vendors and ask for best-and-final offers.

Nayak said in response to McCaul that, the “solicitation clearly articulated the intent to award contracts without discussions. Offerors were expected to provide their best possible pricing with the submission of their initial proposal. Based on the quality of proposals received, DHS determined that discussions were not necessary, therefore, final proposal revisions (i.e., BAFOs) were not requested. Offerors extended the acceptance period of proposals and proposed prices through signed bilateral agreements. Allowing offerors to resubmit pricing would have necessitated a reevaluation of all of the proposals in their entirety.”

In all, DHS evaluated 639 proposals, comprised of more than 20,000 pages of technical documents and past performance questionnaires and 2 million labor and indirect rates, across all nine distinct EAGLE II solicitations over the last 31 months. Nayak said it cost DHS an estimated $9.26 million to prepare for and execute EAGLE II. He said the agency expects to save more than $240 million through the use of the contract over seven years.

Even with all of these protests, a DHS official said several other parts to EAGLE II are available for use by the agency.

The official said out of nine competitions, six are moving ahead without any problems, and DHS or components have made task order awards to companies in all three functional service categories worth approximately $1.66 million.

“The EAGLE II contracts were awarded for IT services to support the homeland security mission,” Nayak said. “Several notable aerospace and defense contractors are among the EAGLE II contract holders within the unrestricted tracks, either as a prime or a core team member. DHS is confident that the pool of EAGLE II contractors will provide DHS programs with the capability to successfully perform homeland security IT projects of any size.”


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