Intelligence contract recompete could be lucrative for several firms

The recompete of a lucrative Air Force intelligence contract could benefit multiple vendors and force a wide-open competition for information technology equipment and services, according to a new report issued by INPUT, an industry consulting firm.

The Warner Robins Air Logistics Center at Robins Air Force Base in Georgia is planning a sequel to its Information, Command and Control Equipment and Enhancement (ICE2) contract. The indefinite delivery-indefinite quantity contract supports global intelligence and command-and-control systems and networks for U.S. defense and civilian operations through a range of IT services.

And while the Air Force has yet to tip its hand regarding its procurement strategy, INPUT, of Reston, Va., suggests that pressures from a handful of interested parties will steer ICE2 toward a multiple-awards vehicle.

"The recompete of a global contract with a broad range of product and services requirements opens up a new opportunity for many vendors to reach the fastest growing, and most difficult to enter, federal technology market -- the intelligence community," said John Slye, manager of federal industry analysis for INPUT and the author of the report. "If the new competition takes the form of a multiple award contract, then that could change the fundamental playing field."

The follow-on contract will replace the original $1.95 billion ICE2 vehicle, which was awarded to General Dynamics Corp. in June 2003. That award had option years through 2013, but the contract reached its ceiling value last June.

The Air Force raised the ceiling in August, allowing agencies to continue placing task orders from ICE2 through next June, at which point the Defense Department hopes the new procurement effort is completed. INPUT expects the follow-on contract to reach as high as $2.25 billion and that the Air Force will likely replicate its aggressive 40 percent small business goal.

General Dynamics has been the incumbent on the ICE contract for 26 years and reviews of its work generally have been positive, the report found. Nonetheless, the Air Force is facing pressure to compete the new vehicle as a multiple-awards contract.

"These pressures are emerging from two camps -- one, based on interpretation of the [Federal Acquisition Regulation] that points the acquisition strategy in the direction of a multiple award, and two, the vendor community, which would like to have a higher probability of obtaining task orders under a multiple-award ICE2 versus competing for a single award against an entrenched incumbent," the report stated.

The ICE2 pie also could be split in other ways. Among the ideas being considered, INPUT said, is using separate awards for specific functional areas of tier 1 support, or individual awards based on geographic coverage. ICE2 provides support to more than 950 customer sites at 500 locations.

INPUT found, however, that there could be some barriers to disrupting the legacy contract. General Dynamics has an estimated 2,300 employees on the ICE2 contract with high-level Sensitive Compartmented Information clearance, and a successor likely would have to match that capability.

In addition, the follow-on contractor or contractors would need to replace General Dynamics' information management system, which tracks funding requests, task orders and materials. The report also suggests that some ICE2 users prefer the "single belly button" level of service provided by using only one contractor and that some agencies may look elsewhere if a multiple-awards strategy is employed.

Plans call for the new ICE2 contract to support 40,000 intelligence customers at multiple agencies, including the Office of the Director of National Intelligence, Defense Intelligence Agency, National Ground Intelligence Center, Office of Naval Intelligence, Counterintelligence Field Activity, Joint IED Defeat Organization and all combatant commands. The performance-based contract also will support intelligence activities at the Coast Guard, the FBI, and the Energy, State and Treasury departments.

It is unclear at this point how quickly the Air Force plans to move on the recompete. During an online question-and-answer session with interested vendors last June, Air Force representatives indicated they wanted to pursue a "very aggressive, very accelerated" contracting strategy. At the time, the Air Force said a request for proposal for ICE2 would be issued by mid-October and a contract award by April 2008.

According to a pre-solicitation notice posted on FedBizOpps in September, however, "the original acquisition timeline is being revised."

"The Air Force is working with the Office of the Secretary of Defense to define the appropriate acquisition strategy for the ICE2 contract, which services multiple Defense and non-Defense customers," Lt. Col. Bill Ferro, chief of ICE2 program said in an e-mailed statement to Government Executive. "We are not still on the quoted schedule."

With the program office at Robins Air Force Base not yet fully staffed and a handful of top-level Defense procurement positions still in flux, a decision on an acquisition schedule for ICE2 could move slowly, INPUT suggested. The "cautious and risk adverse" strategy, the report said, is also designed to avoid a post-award protest.