Expect rough times ahead for Eagle II

One of the nice things about going to a industry party is the opportunity to talk to a lot of people and get the pulse of the market.

Last night’s Deltek holiday party was no exception. The mood was definitely upbeat, but contractors across the board are still anxious; even if the fiscal cliff is avoided, they know the next couple of years are going to be tough.

One common theme among several of the conversations I had were concerns about some large government procurements, particularly Homeland Security Department’s $22 billion Eagle II and to a lesser extent the $11 billion Technical, Acquisition and Business Support Services contract, known as TABSS.

The news about the Eagle II awards broke just before I left for the party. In a nutshell, six awards were made in the full-and-open portion of the category 3, which covers independent test, validation, verification and evaluation. There are other tracks in the category 3 to be awarded, as well as categories 1 and 2 and their tracks.

But the issue is when these awards will be made. Several small business protests have been filed, and aren’t expected to be resolved until February. It’s unusual for protests to be filed even before an award is made but objections have been raised over how the small-business portion of the solicitation is structured.

A question is how the protests will impact getting the awards out. The current Eagle expires in September. What will happen if Eagle II isn’t up and running? Where will DHS turn for IT support?

It seems to be a very real possibility that Eagle II won't be fully in place by the September. That scenario could create a great opportunity for the TABSS contractors. TABSS is geared toward the Coast Guard but can be used across DHS. Many of the same services can be acquired through TABSS as can be purchased through Eagle II, so it makes a logical plan B for DHS IT buyers.

One issue with TABSS is that the recent awards in the full-and-open portion of the contract went to 12 companies, but that is out of 47 bidders. Do you think there will be more than one protest filed? So there will likely be delays getting that one off the ground, but it should still be ready before Eagle I expires. Of course, there is a short window for filing protests and I haven't found any yet.

I also heard from three different people last night that the procurement shop handling Eagle II has been very aggressive in looking for ways to eliminate primes from the competition. Reasons for being knocked out include problems with teammates and how your proposal is structured.

It seems no one is being given the opportunity to make up for deficiencies.

In a way, I’m sympathetic to the government, particularly if the high number of bids that came in for the TABSS contract is becoming the norm. Imagine being flooded with that many proposals. But at least of the stories I heard had a very easy fix -- fire the sub -- but DHS said nope.

Of course, the government brings some of that on itself because these contracts are so sprawling with multiple categories of work and each category having multiple tracks. They practically beg companies to bid as a prime because it is easy for them to find a niche where they can fit into the contract.

While no one called DHS a mess or a nightmare, many people are bracing for a rough ride until these contracts are up and running, particularly Eagle II. So there will likely be delays and protests ahead, a much too familiar refrain in the market.