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By Nick Wakeman

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Nick Wakeman

Budget woes doom $250M small business contract

The Homeland Security Department has killed off a $250 million small-business software contract.

DHS began developing the Software Requirements, Architecture and Design and Software Development Services contract as a blanket purchase agreement over a year ago. But the plug was pulled on the contract, known as SD2/RAD, last week.

The department sited budgetary constraints, as well as less-than-anticipated usage for its decision.

DHS said in its announcement that future work will be handled on an individual basis.

My question is whether there are more cancelled contracts on the way. It seems each time we write about large, multiple award contracts, we get several comments from people questioning the need for them.

After all, there are the General Services Administration’s schedules, and a plethora of large IDIQs from GSA and other government agencies are already available.

I’ve heard Deltek’s Ray Bjorklund say more than once that if you added all the contract ceilings together, you’d never be able to spend that much money.

Sometimes, I get the feeling that some of these large contracts are let by agencies as a means of justifying the existence of their contract shops. At least, that is a common complaint.

So, I applaud DHS for their decision to cancel the contract. They did spend money on an industry day, and companies did submit white papers, but that’s better than continuing on with a contract that would have wasted more money, and been of little use to the government or to contractors.


Posted by Nick Wakeman on Nov 27, 2012 at 9:52 AM

Reader Comments

Thu, Nov 29, 2012

The small business needs to be wary of federal government announcements for such large contracts simply because the small business must invest dollars in the form of resources and administrative functions that will never be repaid. Just a few of these false trails will put a small business company in jeopardy.

Thu, Nov 29, 2012

Why doesn't the government look at some of the bigger contracts with large companies? They can cancel a few, save money and meet their mission requirements?

Wed, Nov 28, 2012

I agree with Rob. Without limited competition opportunities, your putting small businesses head-to-head with large companies and that really is not giving small businesses a chance to get established. If there are budget problems, they can keep the number of RFPs to a level that is within budget.

Wed, Nov 28, 2012

Interesting observations and rationalizations however, again the field is slanted to the advantage of the large prime contractors. Why not modify some of the contracts favoring the large primes instead of shrinking potential business opportunities for small business? There is a plethora of smaller companies that are definitely capable of doing much of the work more efficiently and less costly than many of the larger companies.

Wed, Nov 28, 2012

I agree with your comment. DHS is currently reviewing EAGLE II IDIQ proposals that have very wide scope of work, including the scope that was proposed under SD2/RAD.

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