Moving to the cloud for DoD becoming a complex acquisition affair

The Pentagon awards a contract to REAN Cloud that could be worth up to $950 million while also facing a protest of a supporter services contract.

The Defense Department’s more aggressive move to the cloud will not be without some ups and downs.

Wednesday was the perfect example of those trials and tribulations. Within a matter of hours, DoD’s Defense Innovation Unit — Experimental (DIUx), expanded a third pilot into a full-fledged effort to make it easier for services and agencies to obtain cloud computing services.

DIUx awarded a contract that could be worth up to $950 million to REAN Cloud. The five-year deal will let DoD buy cloud services from REAN through a new streamlined process. Under the contract, REAN will provide access to Amazon Web Services using an automatic pricing and procurement model.

While at the same time, the Pentagon learned its $6.7 million contract for support services for its Cloud Executive Steering Group came under protest at the Government Accountability Office. DoD launched the steering group in September and then reshuffled its members in January.

The Interoperability Clearinghouse, a women-owned 8(a) firm, submitted a complaint to GAO, attesting the award to Eagle Harbor Solutions on Jan. 24 was improper.

ICH Managing Director John Weiler said the protest is based on several points, including the lack of past performance for Eagle Harbor Solutions, and the contention that DoD said in the October request for information that there was no plan for set aside, while listing some of the same services that the company will be performing, including cloud migration services. He said Part 9 of the Federal Acquisition Regulation prohibits a previously announced competitive effort from being awarded sole source.

An email to DoD seeking comment also wasn’t returned.

Eagle Harbor Solutions declined to comment on the protest.

Concerns over the award began to surface from industry experts soon after DoD decided to go with a sole source award to an Alaskan Native Corporation.

Eagle Harbor Solutions is a subsidiary of Koniag Development Corporation. Eagle Harbor says in a fact sheet distributed to press that it has six employees and five subcontractors working on five different contractors to government, and the current revenue in the fiscal year is $2.5 million. The General Services Administration just awarded the company a schedule contract in December and it joined the 8(a) program in October 2016.

NextGov first reported the background of Eagle Harbor Solutions and the questionable decision by DoD to award a contract to a company with limited past performance.

Under the deal, Eagle Harbor would devise and oversee a strategy to accelerate DoD’s adoption of cloud architectures and cloud services.

It’s unclear if the contract award will be paused during the protest.

GAO has until May 16 to make a decision.

Meanwhile, DIUx’s award to REAN Cloud is to take an approach first tested by U.S. Transportation Command last year and expand it DoDwide.

A DoD source said the USTRANSCOM pilot demonstrated “a semi-automated and repeatable framework of tools, processes and methodologies for securing, re-hosting, refactoring, and/or re-developing legacy applications into a government-approved, commercial cloud environment.”

DIUx awarded REAN Cloud a $6.5 million to help with the pilots including USTRANSCOM.

The source added that the pilot proved to provide DoD with cost savings, a more efficient and resilient IT infrastructure and the ability to take advantage of the agile methodology to improve mission applications.

“This production other transaction (OT) contract leverages the full capabilities of REAN Cloud to provide not only the infrastructure-as-a-service (IaaS) that commercial cloud provider offer, but also a full-service solution to migrate an organization’s IT systems to an approved cloud environment and modernize its systems,” the source said. “The benefit of DIUx’s unique production OT contract now allows any DoD organization to quickly initiate a simple task order for REAN Cloud’s services and leverage the same benefits and outcomes that USTRANSCOM achieved.”

Sekhar Puli, REAN Cloud managing partner, said in a release that the USTRANSCOM experience will serve them well with this broader contract.

“With firm fixed-pricing (FFP) and automated procurement, we are changing old mindsets of typical vendor relationships. Our DoD customers can now achieve the same efficiencies available to the commercial sector as they seek to design, migrate, automate, manage and scale systems and databases running in the cloud,” Puli said.

DIUx and the Army Contracting Command, New Jersey, are overseeing 61 pilots and so far have transitioned two to follow-on production contracts. The USTRANSCOM was one and DIUx also awarded a $750 million contract to Tanium and systems integrator World Wide Technology in November.

Congress gave DIUx authorities to use other transactions in 2016 to make it easier and quicker to pull in commercial innovations.

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