DHS puts finishing touches on $22B opportunity

For months, contractors large and small have fixated on the Homeland Security Department’s plans for a new departmentwide contracting vehicle for information technology services, named the Enterprise Acquisition Gateway for Leading Edge Solutions II.

Now, after a lengthy drafting period, DHS is putting the final touches on an upcoming request for proposals for the indefinite-delivery, indefinite-quantity contract. Companies are contemplating how to best position themselves to be part of the action that’s projected to be worth as much as $22 billion.

Contractors are far from flying blind on EAGLE II. After all, it’s a follow-on to EAGLE I in which more than 50 companies — big and small — received billions in task orders.

However, EAGLE II does have some major differences from EAGLE I. Under EAGLE II, DHS plans to realign and reduce the functional categories in the contract from five to three. In addition, under the new vehicle, DHS plans to set aside pools for different categories of small businesses and make it easier to adjust the pool of small-business contractors if companies lose their status during the life of a contract.

Soraya Correa, director of DHS’ Office of Procurement Operations, which is running the procurement, said the planned changes reflect lessons learned from EAGLE I. 

"It really was about efficiency, effectiveness, incorporating our lessons learned and having an opportunity to work even closer with industry on getting a good program up and running," Correa said.

Correa said there are several reasons for putting forward EAGLE II now. EAGLE I is nearing its end, and DHS' agencies want to be able to award longer-term task orders. There are also lessons learned about how to use labor and functional categories more efficiently, she said. Correa added that DHS needs to replace the nine small businesses whose status changed during the contract because they were bought by larger companies or merged with them. The department didn't want to issue a new vehicle solely focused on small businesses.

"We’ve really focused very hard — as we did in EAGLE I — to make sure that we’ve involved industry, that we involved our user community, that we have a transparent process, that everybody understands what we’re doing, how we’re doing it and why we’re doing it," Correa said.

Businesses seem to like what they’ve seen so far from the draft request for proposals that Correa said includes about 95 percent to 98 percent of the data that the final RFP will have.

Ray Bjorklund, senior vice president and chief knowledge officer at market research firm FedSources, said he thinks DHS learned a lot from EAGLE I, and those experiences helped it significantly simplify EAGLE II.

"The ways it makes it easier [for contractors] is that there’s less to respond to," Bjorklund said. "There’s less complexity in responses itself. So writing the proposal, deciding how to approach the capture, how to strategically structure the labor rates and the categories and response — it becomes a little bit simpler."

However, Bjorklund said DHS’ more streamlined approach means contractors will need to be more inferential and strategic in crafting their responses. He also praised DHS for lowering the ceiling for EAGLE II to $22 billion from the $45 billion for EAGLE I that the department never came close to meeting.

EAGLE II's three functional categories are:

• Service delivery, including integration, software design and development, and operations and maintenance.
• Program support.
• Independent verification and validation.

Each functional category is split into two tracks: a small-business track and unrestricted track.

The category realignment took care of organizational conflicts of interest and category overlap, Correa explained.

The small-business set-aside program for the service delivery functional category will include set-aside categories, such as Historically Underutilized Business Zone companies, 8(a) businesses and service-disabled veteran-owned businesses, to ensure that those businesses are represented.

Jay Carroll, director of governmentwide acquisition contracts and IDIQ programs at STG Inc., a privately held IT business based in Reston, Va., that is on DHS’ EAGLE I contract, said his company likes the way DHS plans to streamline functional categories in EAGLE II.

"In EAGLE II, I think that the distribution of the small-business tract and the streamlining of functional categories is going to be to a competitive advantage," he said.

Meanwhile, executives at Lockheed Martin Corp., a large contractor on the EAGLE I contract, also seem pleased with changes that DHS plans to make.

Two Lockheed business units were included on EAGLE I across the three functional categories that are now being rolled into the service delivery functional category for EAGLE II.

"It’s very neat and efficient the way they are realigning it," said Janice Fitts, director of business development at Lockheed Martin Information Systems and Global Solutions, the business unit that’s handling DHS’ bid for EAGLE II.

Correa said that although some people want changes, the industry response to EAGLE II’s draft RFP and the process her office used to develop the solicitation has been positive.

Correa added that although her office is putting together a package that is representative of DHS' agencies needs, she doesn’t anticipate that EAGLE II will be a complete solution for all of DHS’ agencies IT needs.

EAGLE II will be mandatory for consideration but not mandatory for use, and Correa encouraged DHS agencies to use all the vehicles that best meet their needs.

"EAGLE is part of the toolkit," she said, explaining that in some cases, DHS agencies might find what they need on other government contracts that are open to them. "I have every confidence that we will get very good vendors, but I never dare say it’s a 100 percent solution."

Correa said she hopes that the final RFP will be ready by the end of September.