Army moves to Phase 2 awards for $34.5B RS3 contract

Several incumbent contractors missed the initial cut for the Army’s $34.5 billion Responsive Strategic Sourcing for Services contract but they apparently are going to get a second shot.

RS3 is one of the biggest contracts of 2017 and is a 10-year multiple-award vehicle for professional services related to C4ISR systems. It combines several contracts into one, including Strategic Services Sourcing or S3 and Rapid Response 3rd Generation or R2-3G.

CACI International, Leidos, Northrop Grumman, Raytheon and Science Applications International Corp. are among the 15 incumbents who did not win spots on RS3. Click here to see a list of the winners.

But all is not lost for them.

The RS3 solicitation contains a provision that the Army can move to what it calls "Phase 2" awards if they didn’t make a sufficient number of awards in Phase 1. The Army wanted to make 15 small business awards and 25 large business awards for Phase 1.

In Phase 1, 39 small businesses made the cut but only 16 large, so it appears that the Army fell short on the large business goal.

The Army has told Deltek they are moving into Phase 2. And one of the incumbents who didn’t win an award also told me they have been informed by the Army that they were moving to Phase 2.

UPDATE: Friday morning a small business contacted me and told me that they had received notice. They only need to make cosmetic changes to their proposal to be considered for a Phase 2 small business award.

According to solicitation documents, companies competing in Phase 2 can only submit proposal revisions after discussions with the Army. The Army will not be accepting new or amended solicitations.

To win an award in Phase 1, bidders had to meet the following requirements:

• Acceptable corporate experience
• Acceptable small business participation
• Past performance rating of satisfactory or substantial confidence
• Maximum fee of 7 percent or less; 12 percent or less on experimental, developmental or research
• Proposed costs that are fair, reasonable and realistic.

I’m sure the debriefings and discussions for Phase 2 will center on those five factors.

So we’ll have to hold tight for now and see. All told, there were 15 incumbents from predecessor contracts that failed to make it onto RS3 in Phase 1. There also were 387 bids and 55 awards, so that is a lot of companies that need to be debriefed. That might take some time.

Another interesting tidbit I found in the procurement documents posted by Deltek is that RS3 is not divided into small business and large business pools. Instead, small businesses can compete for both set-aside task orders and full-and-open task orders.

Small businesses also don’t need to worry about losing the vehicle if they grow too big. The contract lets small businesses transition out of the designation during the life of the contract, while continuing to bid on full-and-open task orders.

And finally, for companies who failed in Phase 1 and then fail again in Phase 2, there is one final hope. Army plans an on-ramp in year three and again in year six of the 10-year contract.