WT Business Beat

By Nick Wakeman

Blog archive

Code-shopping anyone?

An audit of the Information Technology Enterprise Solutions 2-Services contract criticizes the Army's coding of the contract in a way that made it nearly impossible for small businesses to compete for the $20 billion vehicle. Click here to read the article.

The Army, of course, denies they did anything wrong and technically they didn't. They picked a code that allows for the largest possible small business definition. The auditor's issue is the code - for a telephone company - doesn't reflect the actual work to be done on the contract.

I agree. That no telephone companies bid on this contract is evidence enough that this is the wrong code.

Six of the winners of ITES2-H met the definition of a small business according to the code. I think though that most of these six - Apptis, NCI Information Systems, Multimax, QSS Group, STG Inc. and Pragmatics - are really mid-sized businesses. Two have since been acquired by large businesses: Multimax by Harris Corp. and QSS by Perot Government Services.

The Army used the same code when bidding the ITES2-Hardware contract. When the small business awards went to GTSI Corp. and World Wide Technologies Inc., many voices cried foul. Neither company fits most definitions of a small business. World Wide in fact issued a press release with days of the award bragging that it had broken the $2 billion revenue mark. Click here for our story on ITES2-H. By the time the ITES2-H was awarded little could be done but complain.

With the latest controversy, part of the Army's defense is that the ITES program will be for large projects with broad requirements. So they picked a code that was very broad in scope.

Another part of their defense is that no one objected when the request for proposals went out. The contract was cleared by DOD's Small and Disadvantaged Business Utilization Office, and the Small Business Administration approved the code. The House and Senate small-business committees did not disagree with the selection either.

When you look at the choices the Army made the obvious conclusion is that they believed a true small business couldn't do the work. That is what they said when they picked that code.

Because of the code the Army picked, a lot of small business were never given the chance to argue that they could do the work.

That's sad.

Posted by Nick Wakeman on Aug 14, 2007 at 9:54 AM

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