Army needs extension for $5B ITES contract

The Army needs some extra time as it prepares for the third iteration of its $5 billion IT Enterprise Solutions 3 Hardware contract.

The service is extending ITES-2H for another year to ensure a smooth transition to the new contract.

The Army uses the hardware contracts to buy a wide scope of technology including servers, desktops, notebooks, workstations, thin clients and storage systems as well as networking capabilities. Government users can also purchase support services such as configuration management, installation and warranty and maintenance services.

Contract awards are expected by the third-quarter of 2015, according to Army documents posted on Deltek.

The Army also expects to make eight awards with four awards reserved for small businesses.

Here is where it might get interesting: the current contract also has eight winners, and five of those are what most people would consider large businesses – World Wide Technology, Iron Bow, CDW, Unicom and Dell.

World Wide Technology and Iron Bow have won more than $1.2 billion each in orders over the life of ITES-2H. CDW has pulled in $851.2 million. Unicom, formerly GTSI, has brought in $775.9 million, and Dell stands at $688.3 million. All according to data collected by Deltek.

So will one of those companies not make the cut if the Army only makes four large business awards? Of course, depending on the codes used for the contract, one or two of those might qualify as a small business, but that will raise some eyebrows.

The Army will likely face bid protests, especially if one or more incumbents don’t win awards.

Another complicating factor is that the extension of ITES-2H is only to June 23, 2015. The extension and the proposed award dates are pretty close together.

If there are protests, the Army will likely need to issue another extension.

Which brings me to another point. This contract is another example of how the government can be so disconnected from commercial best practices.

The solicitation for ITES-3H was issued Sept. 25, 2012, and proposals were submitted Nov. 28, 2012.

By the time awards are made, the proposals will be two and a half years old, and that doesn’t count the impact of the inevitable bid protests.

Won’t most of the technology bid in those proposals be obsolete?

It doesn’t make much sense to me why this kind of procurement takes so long. After all, this is a contract for commercial technology products.

Shouldn’t there be a way to evaluate and arrive at good prices in less than 30 months?

The surely wreaks havoc with company business models and decisions on investments and pricing strategies. But the Army doesn’t seem to care about that.