Homeland Security cancels technology services contract

The Homeland Security Department on Friday canceled a major technology services contract in pursuit of a fresh acquisition strategy.

Department officials announced the cancellation of SPIRIT, the Security Planning and Integrated Resources for Information Technology contract, on FedBizOpps. The move allows DHS to adopt an integrated departmentwide strategy for procuring IT services, the announcement stated.

Next year, the department still plans to award "many" technology support contracts, the announcement said. DHS will streamline procurement systems for most of the component agencies, and will award technology work through an Acquisition Center of Excellence.

SPIRIT, worth an estimated $5 billion, predated DHS. The Coast Guard announced the contract in November 2002. Under the agreement, the agency planned to award multiple contracts in four categories: information management, engineering and design of information systems, systems operations and systems security.

Industry observers said they were not too disappointed or surprised to see the SPIRIT contract canceled.

The agreement was tailored to the needs of the Coast Guard when that agency belonged to the Transportation Department, said Bob Welch, a partner at Acquisition Solutions Inc., an IT consulting company. SPIRIT, for instance, focused on creating small business contracting opportunities, an area where the Transportation Department was weak. Homeland Security, on the other hand, is exceeding small business goals, Welch said.

The cancellation of the SPIRIT contract isn't particularly surprising, said Alicia Cudd, a federal analyst with INPUT. At first, the contract appeared promising, but the department went through numerous modifications to the original announcement and repeatedly pushed the timeline back, she said.

FedBizOpps lists 18 modifications to the original announcement, excluding the July 30 cancellation. The department provided scant specifics for potential technology services providers, Cudd said. In addition, the department did not require component agencies to buy off of SPIRIT, "so there was no guarantee that anybody was going to use this," she said. These actions proved discouraging to potential providers, Cudd said, and prompted numerous questions and comments on the contract. Welch said the comments will come in handy as DHS develops a new integrated acquisition system.

Cudd said companies would benefit from a clearer idea of the department's technology services needs. The new system should put in place "easy to understand, easy to use ordering vehicles that streamline procurement," according to Welch. SPIRIT was "just a cumbersome contract," he said, adding that the Coast Guard is not to blame for the cancellation.

"I think what the Coast Guard did was really commendable," Welch said. "[Agency officials] went out of their way to be supportive of the department."

The only unfortunate part about the cancellation of SPIRIT is that companies invested time in the contract, thinking the agreement "was the only game in town," Welch said. But eventually the contract started "fizzling out" and created confusion, he said, making the switch to a new integrated approach appropriate.