Air Force's $1B cloud award part of the 'invisible IT market'

Earlier this week, Dell EMC and its team of General Dynamics and Microsoft announced that they had won a $1 billion contract to migrate the Air Force’s email and other collaboration applications to the cloud.

The Army Corps of Engineers and the Defense Logistics Agency also will use the contract -- technically a task order -- known as Cloud Hosted Enterprise Services. The companies claim this is the largest cloud migration project the government has ever undertaken.

Obviously, this is a big win for these companies. They will move 776,000 users to the cloud. And it follows a smaller contract called Collaboration Pathfinder, where they moved 140,000 Air Force users to the cloud.

The new contract is unusual for a few reasons. It was awarded through multiple General Services Administration schedules held by the three companies. They formed a Contractor Team Arrangement with Dell in the lead. Known as a CTA, the arrangement allows the companies to offer a solution that is crafted from each company’s individual GSA schedule contract.

But the main reason I find this contract unusual is that has been no public disclosure. Zero transparency. And this is a $1 billion contract. It’s huge.

But the Air Force and GSA didn’t violate any procurement rules. Unlike most other contract awards, they were not required to publicly post any notices about the solicitation or the awards. Nada.

Why?

The solicitation was not posted on FBO.gov where anyone could see it. Instead, it was only sent to contract holders under the GSA E-buy program. According to FAR Subpart 5.301, the government doesn’t need to disclose anything if it is awarded under a GSA IDIQ contract or the GSA schedules.

One source told me this is the “invisible market." At a time when most want more government transparency, “the IDIQ market is going in the opposite direction. It is hiding behind a set of special rules where they don’t have to disclose task requests or post more than a modicum of information about task awards,” the source said.

To see the task request, you have to be a contract holder. “This drives market researchers crazy,” the source said. He can add journalists to that crazy list as well.

As more of the market has moved toward these vehicles, billions of dollars in IT awards have gone underground.

And that’s wrong on multiple levels.

First, this is taxpayer money and public disclosure should be the default with only national security considerations creating exceptions.

There can be very little accountability or oversight with the task orders being hidden away.

When this award announced by Dell, a rumor circulated that the Air Force awarded the contract without running a competition.

The rumor turned out to be false but the lack of disclosure creates the atmosphere where those kinds of thoughts flourish.

And the rumor still might not be 100-percent false because we don’t know how many companies competed against the Dell team. Dell referred that question to GSA and GSA has declined to comment on the award.

A Dell spokesman did give me a statement that said the contract was competed. The solicitation was posted on the GSA E-Buy site on Dec. 29, 2016, and responses were due Jan. 31, 2017. The contract was awarded by the Air Force on June 15, according to the spokesman.

But the award only became public this week when Dell put out a press release. There has been no other announcement.

So I’m still left wondering, did the Dell team face one competitor? Two? Three? Or none? We don’t know.

At least the Defense Department generally announces the number of bidders when it publishes contract awards on its Defense.gov site. But while this was a contract awarded to support the Air Force, it isn’t an Air Force contract but a GSA contract, so there was no disclosure.

It is hard for me to imagine why the writers of the acquisition regulations gave a pass to the schedules and GWACs. It just doesn’t make sense.

Perhaps the burden of publishing the solicitations and award notices is too great. But you can set a threshold on when disclosure should be made.

But it is plain wrong that a $1 billion contract award just pops up out of nowhere.