EAGLE II Build on Success

EAGLE II Builds on Success

Key changes in DHS’s new agency-wide contract for IT services offers more value to users, more opportunities for industry

By Steve LeSueur

The Department of Homeland Security’s (DHS) new $22-billion EAGLE II contract incorporates lessons learned and innovations that will enable agency components to procure even more expeditiously IT services from contractors who are attuned to their individual cultures and emerging requirements.

“The contract is set up to make sure that these contractors fully understand DHS policies and procedures,” said Soraya Correa, director of the DHS Office of Procurement Operations, which oversees the EAGLE program. “Once the contractors come on board, they have the advantage of understanding our CIO community, and can bring an agency-wide perspective of the department’s IT infrastructure and how it’s set up.”

Soray Correa “People really wanted to use this vehicle and we’ve been able to put through some very important and critical work for the DHS infrastructure using [the EAGLE] contract.”

Soraya Correa, director, Office of Procurement Operations, DHS

The Enterprise Acquisition Gateway for Leading Edge Solutions II (EAGLE II) is an Indefinite Delivery/Indefinite Quantity (IDIQ) contracting vehicle that all DHS component agencies can use to purchase information technology services and solutions. EAGLE officials have announced that the follow-on contract to EAGLE I will have a $22 billion ceiling and consist of two tracks: EAGLE II Unrestricted for large businesses and EAGLE II Small Business.

EAGLE officials released the draft Request for Proposal (RFP) for EAGLE II on May 21; they expect to issue the final RFP in the fourth quarter of fiscal 2010. The contract award will be made before EAGLE I for large businesses expires in June 2011.

DHS officials could have exercised options to extend EAGLE I until 2013, but moving to EAGLE II now enables them to strengthen the contract in a number of ways. First, they can replenish the shrinking pool of EAGLE small businesses; of the original 28 EAGLE small businesses, nine have been purchased by larger companies. In addition, EAGLE II will make it easier for DHS organizations to achieve their small-business contracting goals. Moving to EAGLE II also will enable DHS officials to refresh contractor labor rates and structure the rates to accommodate the different levels of security clearances. Overall, EAGLE officials will apply lessons learned to make the new contract more flexible and easier for component agencies to use, giving them ready access to the latest technologies and solutions. “The technology and the marketplace are continually evolving, and we want to ensure that our RFP reflects those changes and improvements for our customers to reap the benefits,” Purnell Drew, the EAGLE II Contracting Officer, told industry officials at a March 30 pre-solicitation conference.

EAGLE I sets the stage
The first EAGLE contract was created to serve the needs of the newly formed DHS, which combined 22 departments and agencies. EAGLE I was awarded to 25 large businesses and 28 small businesses in 2006 with a ceiling of $45 billion over a five-year base and two one-year options. The contract was divided into five functional areas, and contractors were awarded spots on one or several of the categories.  To date, DHS organizations have used EAGLE I to generate more than 400 orders totaling $8.2 billion. Although this amount falls well short of the $45 billion ceiling, government and industry officials consider the program a great success.

“We’ve given work to small businesses and large businesses. People really wanted to use this vehicle and we’ve been able to put through some very important and critical work for the DHS infrastructure using this contract,” Correa said.

Among the major task orders issued through EAGLE are the U.S. Citizenship and Immigration Services’ Transformation Solutions Architect Acquisition, a $491 million contract awarded to IBM; Primary Data Center Managed Services, a $391 million contract awarded to CSC; and the Homeland Security Information Network – Next Generation, a $62 million contract awarded to General Dynamics.

“People vote with their dollars,” said Kevin Plexico, senior vice president of research and analysis services with INPUT, who estimated that about 25 percent of DHS’s annual spending on IT services goes through EAGLE. “DHS components are showing a strong preference for EAGLE.”

Ray Bjorklund, senior vice president and chief knowledge officer at FedSources, agrees. “I give DHS a lot of credit for taking an orderly, disciplined approach to building out a contract vehicle that is relatively flexible for both agency customers and contractors,” he said.

Bjorklund said EAGLE I helped to standardize procurement practices and processes across the agency’s disparate components. He also praised the EAGLE program for adhering to the intent as well as the letter of procurement regulations, such as those requiring contractors to have a fair opportunity for consideration on contracts. “They have put in place a rigorous set of processes and procedures for managing programs through EAGLE and FirstSource,” Bjorklund said. FirstSource is a companion-contracting vehicle for purchasing IT hardware and software.  [For more on FirstSource, see page s10.]

EAGLE II Emerges
The draft RFP for EAGLE II incorporates many lessons learned from the first EAGLE procurement. Among the most significant, EAGLE II has reduced the number of functional categories from five to three:

*Functional Category 1: Service Delivery, which includes integration, software design and development, and operations and maintenance

*Functional Category 2: Program Support Services

*Functional Category 3: Independent Verification and Validation (IV&V)

Contractors can bid on any or all three functional categories; but unlike EAGLE I, they can win a spot on only one functional category. This will help avoid potential organizational conflicts of interest. But given that the largest portion of work likely will go through Functional Category 1, contractors will have to plan carefully how they bid. “It sets up some interesting gaming strategies for companies who have to decide which category they want to win, and which category they would accept as a win,” Plexico said.

In addition to eliminating organizational conflicts of interest, consolidating the functional categories will make it easier for component agencies to use EAGLE, Correa said. Under EAGLE I, contracting officials were sometimes uncertain which functional area addressed their requirements. The restructured categories in EAGLE II should eliminate this confusion. “We think this change will simplify EAGLE, making it easier to manage and easier for our folks who are placing the orders,” Correa said.

EAGLE II also includes a number of changes to help agencies find capable small businesses in each of the small business socioeconomic categories. “We want to see EAGLE II contribute to our small-business program by identifying task orders that can be set aside by category and by encouraging large businesses to have meaningful subcontracting participation,” said Kevin Boshears, director of the DHS Office of Small and Disadvantaged Business Utilization. As with EAGLE I, EAGLE II will not charge DHS organizations a fee to use the vehicle. The EAGLE program office awards and manages the contract, but each individual component is responsible for placing and managing its own orders. Similarly, EAGLE II, like EAGLE I, will be “mandatory for consideration” within DHS. This means that DHS procurement officials must consider using EAGLE, but they are not required to use it. “We don’t believe that one size fits all, and so we don’t require that the components use EAGLE,” Correa said. “We just ask that they consider EAGLE first; and if it doesn’t work for them, just document the file.”
Correa’s office also oversees other agency-wide contracts such as FirstSource, an IT products contract for small businesses, and the Program Management, Administrative, Clerical and Technical Services (PACTS) contract, a non-IT professional support services contract for service-disabled veteran-owned small businesses. Correa and her staff will continue educating DHS program and procurement executives about the advantages of using EAGLE II, but their experience managing EAGLE I also has given them greater insight into the types of programs and requirements for which the contract is best suited. Consequently, they do not balk at sending components in a different direction if another type of contract would better fit their needs.

“We’re a lot smarter than when we first started EAGLE. We have a more disciplined requirements management process,” Correa said. “I want EAGLE to be the vehicle of choice, but I want our components to use the vehicle correctly.”

DHS Enterprise Acquisition Gateway for Leading Edge Solutions II

*$22 million ceiling

*Agency-wide IDIQ contract for IT services and solutions.

*5 years, plus one two-year option

*Task orders types available are fixed-price, cost reimbursement, time and materials, and labor-hour.

*Contains two separate contracts: EAGLE II Unrestricted (large businesses) and EAGLE II Small Businesses

*EAGLE II Small Business will include 8(a), HUBZone, Service-Disabled Veteran-Owned, and Small Business

Contractors compete in three functional categories:

*Service Delivery (including integration, software design and development, operations and maintenance)

*Program Support Services

*Independent  Verification & Validation (IV&V)

Contractors can bid on any or all functional categories, but contract award is limited to one category to avoid potential organizational conflicts of interest.

Source: DHS Pre-Solicitation Conference Presentations