The DIA’s $6.6B SITE I.T. Contract
The US Defense Intelligence Agency is managing the maximum $6.6 billion, multiple-award Solutions for the Information Technology Enterprise (SITE) contract, on behalf of a number of agencies in the USA. The goal is a single umbrella contract, whose terms support the USA’s global intelligence and Command-and-Control needs. The contract will serve The DIA and other agencies within and beyond the US Department of Defense who have intelligence missions, or use C2 (Command & Control) and DoD intelligence systems. That includes US national command authorities, all branches of America’s armed forces, Combatant Commands, Joint Reserve Intelligence Program, and others.
SITE has some similarities with other umbrella I.T. contracts within the US Department of Defense, and some unique features…
On SITE, Under the Umbrella
SITE is the second in a series of DIA Enterprise IDIQ contracts, following on the heels of its December 2007 “Solutions for Intelligence Analysis” umbrella agreement. It replaces SIA, as well as the Pentagon’s DODIIS Intelligence Information System contract, the DIESCON3 Integration and Engineering Support Contracts; and the Air Force’s longstanding ICE2 Intelligence Information, Command and Control, Equipment and Enhancements single-award contract.
The Scope of Work is divided into 2 Service Areas. Both areas’ 5-year contracts use a base year with 4 one year options, and a 6 month option to extend services clause. Winning firms earn the opportunity to compete for specific task orders as they come up, with each task order as a mini-competition of its own, under pre-agreed umbrella terms.
The basic concept behind these kinds of umbrella contracts is to lower both individual contract costs, and the time required to negotiate and approve those contracts. In a military environment that needs what it needs right now, the second goal is often more significant than the first.
By creating a set of common contract terms, performance measurements, and approved suppliers, a government agency effectively builds an arena in which a limited set of firms can compete. Participating agencies need not re-invent the wheel every time they want to run a chariot race, and firms with footholds under the contract can still introduce innovation by making changes to their associated teams of firms. Common performance benchmarks may even help participating agencies compare performance across boundaries that would normally be impervious to such comparisons, and allow agencies to more readily learn from one another.
That’s the theory, and frequently the practice as well. It’s the thinking behind the DIA statements that:
“DIA is expecting SITE to facilitate cost efficiencies, innovative technical solutions, and enhanced competitive opportunities for industry.”
“… designed to enable streamlined execution; simplify purchase requests; standardize acquisition documentation; improve enterprise program management for customers; provide better reporting capability; improve contracting performance and data integrity; and make the agency’s overall IT acquisition processes more efficient.”
There are also some flip sides to these types of contracts.
One potential issue is that umbrella contracts are also only as good as the umbrella. Flawed contract language can make provision of service difficult, or even have unintended effects in excluding whole categories of firms. Performance benchmarks built in to the contract may be appropriate for some needs, but not for others. In which case, the all-encompassing nature of these contracts becomes a trap for subscribing agencies, who are under strong pressure not to use independent alternatives. Even if they becomes necessary, in order to do one’s job properly.
Unless major problems manifest immediately, the actual performance of an omnibus contract’s drafters is not generally obvious until the contract has been running for a while. Even then, it is generally obvious only to insiders. A good omnibus contract has ancillary processes that look at the performance of the contract itself over time, as well as the contractors.
Another, ever-present issue with umbrella contracts is that they are also only as good as the agencies using them. In theory, a common set of contract terms and performance standards allows ready comparison and learning across agencies. In practice, the agencies, and the people within them, have to be interested in making the comparisons, then actually learning from them. Nor does even a good umbrella contract turn an agency that manages its resources poorly into anything except… an agency that can manage its resources poorly under omnibus terms.
As a final note, the growing tendency of defense contractors to protest the loss of significant contract awards has had the effect of excluding many small firms from competitions, precisely by pushing the government to deal with small rosters of approved suppliers, under large omnibus contracts. The $20 billion ITES-II I.T. contract is a prime example. Against the constant grind of competition among the winners of a multiple-award contract, one must also set the ability of system gatekeepers (for example, a winning firm) to restrict access to that system, and collect “rents” in return for their favored position. Over the long term, these gatekeeper firms will also generally favor more complex and onerous terms, since their own ability to deal with the arcana acts as a competitive barrier to entry.
SITE’s FedBizOpps solicitation did state that:
“…large business offerors shall include small businesses as team members, to include partnerships and mentor-protege arrangements. Small business goals will also be reportable on an annual basis to ensure goals are being met.”
That note was more about meeting generally-unmet federal quotas than it was about this kind of gatekeeper trap, but it can be part of a counterbalance to these natural tendencies. The other counterbalance relies on the lead contracting agency itself to resist complication in its contract vehicles, and relentlessly work to simplify. Needless to say, this is not a common trait in bureaucracies.
DID does not expect to update this section as individual awards are announced. Competition among the listed firms for task orders under the SITE contract vehicle will begin in the summer of 2010. The US Defense Intelligence Agency manages these contracts.
- BAE Systems Information Technology, Inc. in McLean, VA (HHM402-10-D-0013)
- General Dynamics Information Technology, Inc. in Chantilly, VA (HHM402-10-D-0014)
- Lockheed Martin Corporation in Gaithersburg, MD (HHM402-10-D-0015)
- Northrop Grumman Systems Corporation in Fairfax, VA (HHM402-10-D-0016)
- Science Applications International Corporation in San Diego, CA (HHM402-10-D-0017)
- Systems Research and Applications Corporation in Fairfax, VA(HHM402-10-D-0018)
- Blue Canopy Fed Group LLC in Reston, VA (HHM402-10-D-0019)
- CenTauri Solutions LLC in Alexandria, VA (HHM402-10-D-0020)
- Enterprise Information Services, Inc. in Vienna, VA (HHM402-10-D-0021)
- Red Arch Solutions, Inc. in Vienna, VA (HHM402-10-D-0021)
- Worldwide Information Network Systems, Inc. in Seabrook, MD (HHM402-10-D-0023)
Note that each of the winning firms above is actually the leader of a team of firms. Work can include:
- Program and Project Management Services
- Technology Assessment and Evaluation Services
- Systems Engineer Services
- Operations Support Services
- Network Operations and Administration
- Storage Services
- Web Services and Content Management
- Acquisition and Property Management Services
- Maintenance and Remote Diagnostic Services
- Administrative and Special Services
- Information Assurance Services
- Security Management
- SCI Personnel and Information Security Support
- Risk Management
- Testing and Verification Services
- Training Services
Additional Readings & Sources
- US DIA – Solutions for the Information Technology Enterprise (SITE)
- Federal Business Opportunities (#HHM402-08-R-0150, Aug 4/08) – Solutions for the Information Technology Enterprise (SITE)
- US DIA (March 14/10) – Solutions for the Information Technology Enterprise Aawards [PDF]
- DID – The US GAO’s Bid Protest Process
- DID – The US Army’s $20B ITES-2 Contract.
- DID – Small Businesses Succeeding As USAF’s $9B NetCents Contract Receives Promo Push. Includes a section with best practices for government designers of these umbrella contracts. Note, too, the subsequent tension over the contract’s definition of ‘small firm,” and the different imperatives and concerns driving the players involved.