Why ITES-SW2 is the key to selling software to the Army

If you currently sell (or want to sell) to the Army and your products are not on the Information Technology Enterprise Solutions - Software 2 contract, you may be missing an important part of the process.

It is estimated that nearly 3% of DOD IT contract spending in fiscal 2020 flowed through an ITES contract. While this may sound like a small percentage, when you’re talking about $54.7 billion of DOD’s IT spending, 3% translates to approximately $1.64 billion. The Army anticipates that this spending will continue to increase over the next couple of years.

The ITES-SW2 contract is part of the Army’s Computer Hardware, Enterprise Software and Solutions (CHESS) program. This program was established by the Army’s Program Executive Office for Enterprise Information Systems. It is a mandatory source for commercial IT hardware and software purchases. To understand the ITES-SW2 contract, it’s important to first understand more about CHESS.

Why CHESS matters

To guarantee Army readiness as well as network and data security and accessibility, the CHESS program was created to provide flexible contracts that enable government customers to meet their critical requirements. It also allows industry partners to offer cutting edge technology to the Army. 

The CHESS program’s mission is to be the primary source to “support the Warfighter’s Information Dominance Objectives” by developing, implementing and managing commercial IT contracts that provide “enterprise-wide net-centric hardware, software and supporting services to the Army.” 

CHESS contracts provide IT products and services that comply with U.S. Army Network Enterprise Technology Command, Army and DOD policy and standards. According to the Army Federal Acquisition Regulation Supplement, Army purchasers of commercial hardware and software must satisfy their IT requirements by utilizing CHESS contracts first, regardless of dollar value or financial appropriation (See AFARS 5139.101-90).

In addition, purchasers of IT requirements for the Army through a third party – such as a system integrator – must also ensure that solicitations and contract vehicles include the requirement to purchase through the CHESS select agreements. To purchase outside of the CHESS program, the Army customer must seek an exception to the AFARS regulation by being granted special permission, and by going through both a formal request and waiver process. This creates more work for your Army customer, inserting additional cycles into the acquisition and procurement processes and introducing risk and delay into your Army opportunity.

With all that background, why is the ITES-SW2 contract so important? 

ITES-SW2: Improving software for a better acquisition process

ITES-SW2 is a firm fixed price ID/IQ contract vehicle for software products and maintenance (with related incidental hardware and services). It is a follow-on to the original ITES-SW contract awarded in 2015. 

With a $13 billion contract ceiling, the new ITES-SW2 contract was awarded in August 2020 with a five-year base and an option for an additional five-year period. The contract comes out of Army’s PEO EIS under its Enterprise Services Mission Area. It is focused on improving software development to speed up the acquisition process by utilizing commercial-off-the-shelf products and agile approaches to software development.

Despite being used mostly by the Army, the ITES-SW2 contract is in fact open to all DOD and federal agencies. Given that there is no fee to use this contract, ordering is decentralized. The ordering contracting officer is responsible for requesting, obtaining and evaluating proposals/quotes and for obligating funds for delivery orders issued, utilizing the CHESS e-commerce portal, IT E-mart. This satisfies the Army customer’s competition requirements making this contract a straightforward and efficient vehicle option for Army customers. 

Through the ITES-SW2 contract, software categories increased from four in the previous contract to 14 today – providing manufacturers, resellers and partners more opportunities to offer their products to their government customers. 

In addition to providing a no-fee, flexible procurement option for your government customers, the ITES-SW2 contract also allows for quick turnaround times to add new products to the contract. That is because product groups (rather than individual products) are approved, and pricing is set at the opportunity (rather than the catalog) level. 

This means your government customers can have access to your newest technology in a matter of days, instead of the month-long wait times we see with other contract vehicles.

If you sell to the Army, the ITES-SW2 mandatory source contract checks all the boxes for a no-fee vehicle with quick product additions that satisfy agency competition requirements, helping you minimize risk, shorten your sales cycle, and bring your opportunity to closure.