The Defense Department will revise its final request for bids in a massive information technology services contract known as ENCORE III following months of industry complaints about the agency’s strategy for deciding the winning bidders, including two formal protests that were upheld by the Government Accountability Office last week.

The Defense Information Systems Agency said it would update the RFP to fix some of the problems pointed out by protestors Booz Allen Hamilton and CACI. GAO agreed with the companies’ protests on at least two points in a decision Wednesday, saying DISA didn’t provide any reasonable basis for evaluating contractors’ costs in the parts of the potential $17.5 billion multiple-award contract that were set to be awarded on a cost-plus basis, and lacked an adequate scheme for deciding whether bidders’ prices were reasonable.

“We will amend the ENCORE III RFP in accordance with the findings and decision of the GAO, which pertains only to limited aspects of the cost/price evaluation,” Douglas Packard, DISA’s procurement executive said in a statement Friday afternoon. “It is the mission of the Procurement Services Directorate and Defense Information Technology Contracting Organization (DITCO) to be the premier DOD cyber procurement workforce. It is always our goal to obtain global and mobile information technologies and capabilities on behalf of our national defense mission partners through timely, quality, and ethical contracting. In doing so, we fully embrace the tenants of Mr. Kendall’s Better Buying Power.”

The reference to Frank Kendall, the undersecretary of Defense for acquisition, technology and logistics, and his Better Buying Power initiative appeared to be a nod toward the concerns federal IT vendors have been expressing about the ENCORE solicitation since at least last fall, after DISA made it clear that it wanted to award the contract on a lowest-cost technically acceptable (LPTA) basis.

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The Coalition for Government Procurement was the first large industry group to raise concerns about ENCORE III, saying in a letter directly to Kendall last October that DISA’s strategy seemed to contravene his memos and statements that instructed DoD to only use LPTA when contracting organizations had firmly-established, well-understood requirements.

The Professional Services Council and the IT Alliance for Public Sector followed suit with a similar letter to Kendall  in April, just before the final ENCORE III RFP was released.

GAO has yet to release the full text of last week’s ENCORE III decision. Based on the short statement it issued last week, it’s not necessarily saying DISA can’t stick with its fundamental  plans to use LPTA as its main criteria for evaluating prospective vendors for spots on the IDIQ contract. But it has more work to do if it’s going to use price as its main basis for picking up to 20 large contractors over up to 10 years, especially since it’s been unwilling to tell prospective bidders how much the department plans to spend on those services.

Read more of the DoD Reporter’s Notebook.

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