Two major technology contracts are ready to enter their next steps in the acquisition process.

The Veterans Affairs Department is evaluating bids for its $5 billion commodity IT hardware contract and expects to make awards by Sept. 30.

The General Services Administration any day now will release a request for information for a blanket purchase agreement on how best to offer continuous monitoring tools to other agencies.

Both of these significant contracts, coupled with what some in industry are calling the busiest fourth quarter buying season in recent memory, are showing that despite budget pressures and the potential for sequestration cuts, agency spending is healthy and active.

For instance, GSA’s AMCOM EXPRESS contract, which is only available to the Army at Redstone Arsenal, Ala., is on pace this year to equal last year’s $1.5 billion in sales, said Eddie Mills, the program’s customer service director.

GSA’s FEDSIM Assisted Acquisition Service also is expected to award about $1.5 billion in contracts, including $900 million for the Defense Department, said Pete Burr, FEDSIM’s director of the civilian sector.

VA to do most buying through two MACs

The VA soon will add another multiple award contract (MAC) to the mix. It will buy most of its technology services and hardware from its two MACS, T4 and the Commodity Enterprise Contract (CEC).

“Right now the Technology Acquisition Center is in the evaluation phase of our CEC acquisition, looking to establish our enterprise vehicle as it relates to some of our IT hardware commodities the department routinely buys,” said Kevin Loesch, the VA’s customer liaison representative at Technology Acquisition Center, during a panel discussion at the Multiple-Award Government and Industry Conference in Arlington, Va. Thursday. “This includes end-user device level, laptops, mobile tablets, severs, networking gear, servers, routers and security platforms.”

CEC is a five-year contract with a ceiling of $5 billion. Loesch said the VA expects to make an award in the fourth quarter of 2012.

VA recently held a fiscal 2013 forecast day for T4 as well. Loesch said the VA is looking to expand the use of T4 by letting other agencies use the IT services contract. He said the Army is among the first to test how the interagency agreement would work.

GSA is just in the beginning stages of its latest BPA for cybersecurity tools.

“We’re working with DHS on its cyber program. We’re looking at a Schedule 70 buy for a couple of things,” Burr said. “They want state and local to play, and they will want small business participation. Depending on how we craft the BPAs there may be a small business set-aside on those.”

He said the request for information for the continuous monitoring tools should be out this week. The eventual request for proposals will come only through Schedule 70 and GSA plans to award the BPA by the end of November for a several continuous monitoring tools.

Acquisition spending peaked in 2011
But not every agency is expecting to keep on spending.

The Defense Department is seeing a change in how much funding it has for contracts.

“We’ll not have the amount of money we’ve had before. We’ll not have these increases in the budget,” Richard Ginman, the DoD’s director of defense procurement and acquisition policy, said during another panel. “Overseas Contingency Operations is not going through the roof. I think our actual expenditure rate peaked in 2011, and we are now starting to drop. The actual amount of money going out to industry is starting to drop. It’s going to be less.”

No matter what an organization’s current budget looks like, nearly every agency is trying to figure out how to move money from contracts or back- office IT to mission critical needs.

The Transportation Department is one of the agencies starting to find some success in doing that.

Nitin Pradhan, the DoT chief information officer, said the agency spends about 81 percent of its $3 billion IT budget on business systems, 10 percent on business support systems and 9 percent on infrastructure.

Pradhan said the DoT needs to find a way to be innovative in the business systems area.

“So we need to really figure out how to create our own budget to do that. The only way you can really go out and do that is to reduce the steady state funding, take some of that original funding that is available because of that and then go out and do innovation or modernization and development,” he said. “That is where a lot of activity is happening. There is significant amount of activity on the steady state side trying to push the pricing down and really push the costs down, and really putting all that money into innovation and modernization.”

Deciding on the value of a system
Pradhan said DoT wants innovations to increase public value, increase business value and increase the total cost of ownership for the agency.

One way the department is heading down the path is by creating an inventory of all their systems. Pradhan said this is part of a portfolio optimization approach DoT has been using over the last few years. And he said his office created a service catalog with more than 400 systems across the department.

“Each system now gets equal visibility. People know where they can find all the services. Now we can quickly find which services are being used more, and which services are being used less because they have equal opportunity to get access,” Pradhan said. “Then people can rate them; think Amazon-like rating with feedback. If a particular system is not being used at all, or is not being used and is rated low, or it is being used and rated low, my team can look at it and go to the business owner and say, ‘You are spending so much money on that. It really isn’t rated well and really nobody is really using it, let’s do something with that money.’ ”

Pradhan said it’s too early to say how much money the agency is saving and where it’s moving the savings to mission areas. But he should have more details in the fall.

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