IBM fights on for lost DHS data center contract

IBM has filed a protest over a data center services contract that the Homeland Security Department has awarded to Accenture.

This contract is a consolidation of five predecessor contracts and IBM is an incumbent on one of those.

Interestingly, IBM captured the work in 2014 after it won a protest over awards to Leidos and Agilex, which was later acquired by Accenture.

For the new contract, U.S. Customs and Border Protection wants to consolidate the existing contracts into a single contract and move the work from a cost-plus and labor hour structure to fixed-price.

Deltek data shows the five incumbents as IBM, CSRA, Presidio, Vencore and Mythics. IBM is the only one of the five so far to file a protest.

Known as the Data Center Support Services contract, the vehicle covers multiple DHS data centers including the CBP National Data Center Complex in Springfield, Va.; the Stennis Data Center in Mississippi; and DHS Data Center 2 in Clarksville, Va.

The contractor also will support the use of public cloud service providers.

According to solicitation documents, CBP wants to create what it calls a “stable, predictable business environment” that will lead to costs savings for the agency and the contractor as the work moves to a fixed-price structure.

DHS has used a two-step process to pick a winner. Step 1 required an oral presentation and a written submission.

If company cleared Step 1, they moved to Step 2 where they were required to submit another written proposal.

Companies were required to participate in Step 1 in order to move to Step 2.

After Step 1 was completed, DHS only shared amendments and other information with the companies participating in Step 2. So FBO.gov notices and other public disclosures stopped. See Lisa Pafe’s commentary for more on this.

For the oral presentation part of Step 1, companies could bring six people but four had to be current employees. The other two could subcontractors or consultants.

Companies were giving advance questions but on the day of the oral presentations they were given a second set of questions and 60-minutes to prepare a response. They then had 90 minutes to present, followed by 30 minutes of government questions.

No laptops or other electronic equipment could be used during the oral presentations.

There were two advanced questions. One was whether the bidder had moved a federal client to a firm-fixed price structure that resulted in reduced annual costs. How did you do that?

The second question was about moving an application to two different public cloud providers. DHS wants the application to have an active failover capability to minimize disruption in case there is an outage with one provider. And again the follow up was: How did you do that?

I’ve heard different things about the value of the contract. Deltek lists its value at $100 million. But other sources have indicated that it is higher.

When IBM protested the 2014 contract, its bid was $144.3 million. That was compared to Agilex’s $112 million bid and Leidos’ bid of $107.5 million. Presidio bid $178.9 million.

IBM filed its protest of the new contract on Oct. 17. A decision from GAO is expected by Jan. 25.

We’ll watch to see if other bidders join in.