DHS plans fresh look at Eagle II bids

Faced with 25 protests, the Homeland Security Department has decided to take a fresh look at the proposals for largest portion of its $22 billion Eagle II contract.

The agency has been besieged by protests with each block of awards it has made over the last year for the broad, multiple-award contract.

Eagle II has three functional categories, and then multiple business designations under each category for large business and various small business types.

The latest and largest group of protests is for the functional category for service delivery. The agency made 15 large-business and 15 small-business awards just as the government shut down on Oct. 1. By late November, the protests started flooding in.

Right now, the number of protests is at 25 for service delivery category, and 49 for all of Eagle II. Of the 49, there have been only four denials by the Government Accountability Office, where the oversight agency ruled in favor of DHS. Two denials involved protests by ICF International and two denials involved Burke Consortium Inc.

There also have only been two withdrawals: one by Systems Engineering Research Development Institute and one by Technica Corp. Withdrawals occur when the protesting company decides for whatever reason to no longer pursue the protest.

So, that leaves 43 protests that have either been dismissed by GAO or are about to be dismissed, according to my source, because DHS has said it wants to re-evaluate the bids, taking a corrective action.

As I wrote in an earlier blog, DHS was quickly approaching the 30-day deadline to file its response to the protests filed since late November.

If it filed responses, that would mean the agency was going to fight the protests. Generally, if an agency is going to voluntarily take a corrective action, then it makes that decision before the 30-day window has passed.

It appears that DHS has made the decision not to fight in this instance -- or at least, not fight yet.

It’s important to note that just because DHS has told GAO that it is going to take a second look at its award decisions, doesn’t mean that the protestors are going to automatically get an award.

DHS could decide to award contracts to some companies and not others, who retain the right to re-file their protests.

But what it does do is continue the delays Eagle II has suffered through. The delay gives more time for incumbents who lost the recompete to solidify strategies to move work off of Eagle I, and onto other contracts.

And because of the delays, DHS components that used Eagle I are more likely to move their work elsewhere because the work still needs to get done.

So, the likelihood and the need to move work from Eagle I to other vehicles only grows with the delays, weakening Eagle II as a vehicle.

And we aren’t talking insignificant amounts of work, either.

According to information from the market research firm Deltek, Eagle I incumbents who lost the recompete for Eagle II have done billions in business under Eagle I.

Among the protesting incumbents are:

• SAIC/Leidos with $1 billion in task orders since 2005.
• Lockheed Martin with $490.9 million
• Unisys Corp. with $380.3 million
• Northrop Grumman with $117 million
• SRA International with $91 million
• Electronic Consulting Services with $88.2 million

Interestingly, some large businesses -- such as AT&T and General Dynamics -- that did significant business on Eagle I, but didn’t make the cut for Eagle II, haven’t filed protests.

It’s not clear to me how DHS’s decision to relook at the bids impacts them. Presumably, because they didn’t protest, they may have missed the opportunity to get a second bit at the apple.

Either way, the delays to Eagle II only make the anticipated success of the contract harder to attain.