Some of you may be tracking a long-term and fairly large IT services opportunity called the Information Technology Capabilities Contract II (ITCC II). This is a broadly scoped IT services contract currently held by CSC. ITCC services U.S. Strategic Command (STRATCOM) headquartered at Offutt AFB. Even with expected budget cuts – and the fact that we really don’t know what will be cut – this is an interesting opportunity, but different than what I’ve typically examined. This is a winner-take-all contract. Even in a winner-take-all scenario there are multiple “winners” in both the victorious prime contractor and any teammates. All things considered, ITCC II is an interesting and attractive opportunity.
Let’s start with what ITCC II will do. The scope of ITCC II is incredibly broad so I’ll keep it to the highlights:
- System engineering, integration, operational, logistical, maintenance, configuration management and system administration services for IT infrastructure at United States Strategic Command (USSTRATCOM)
- IT infrastructure consisting of several separate Local Area Networks (Commercial, Unclassified, Secret, Top Secret, and Top Secret Extremely Sensitive Information (ESI)) currently comprised of around 13,000 PCs / workstations / servers on fixed and mobile platforms utilizing commercial off the shelf (COTS) hardware and COTS & GOTS software
- System administration will need to be provided for all systems and applications connected to the LANs, plus standalones and/or laptops
- Systems engineering processes consistent with industry standards are to be implemented and the provider will be expected to continually evolve the IT infrastructure to a common architecture through the technical solution process
What does STRATCOM advertise about their expectations?
- Systems engineering processes consistent with industry standards are to be implemented and the provider will be expected to continually evolve the IT infrastructure to a common architecture through the technical solution process
- Earned Value (EV) analysis and management for each discrete Work Breakdown Structure (WBS) element must be provided
- USSTRATCOM is seeking a partnership that will permit the service provider maximum flexibility in implementing IT infrastructure services through performance-based Service Level Agreements (SLA) satisfying cost, schedule and performance parameters while achieving a balance between service provider accountability and government insight
- The contractor must have personnel (number is undisclosed) with Top Secret clearances
Yet more generic statements but at least you begin to understand expectations. STRATCOM states that it is interested small businesses that can potentially perform all services, but the small business needs to be able to perform at least half of the work themselves. Consider the NAICS code 541512 with a size standard of $25.5M against the historical spending on ITCC below.
First things first, don’t assume the ITCC sky is falling because obligations appear to have dropped off in FY2012. Contracting data can be delayed by as many as 90 days. The FY2012 chapter is not over yet. Above all consider ITCC II in terms of $478,459,745 in obligations against a $700 million ceiling. It doesn’t take much analysis to know this contract is too large for most small businesses to act as a prime contractor. This condition of “too large” may be changed if the business in question fits one of those specific and “funny” virtual exceptions (such as an Alaskan Native Corporation). Whether or not you can lead a head-to-head competition with CSC there is a significant opportunity to work on a team that can challenge the incumbent CSC. The acquisition strategy behind ITCC II still appears to be forming with a competition unlikely to occur any time before late 2013.
Takeaways:
- Funding has been strong each year and the contract is broad enough to provide opportunities for small businesses if they can hitch themselves to a credible competitor to CSC (unless you can get on CSC’s team which is probably ideal)
- The acquisition strategy is still forming thereby allowing you to provide input or to have time to make an intelligent (e.g. not panicked and reactionary) pursue decision
- Along the same fact of a yet-to-finalize acquisition strategy is some risk…will this contract migrate over to a centralized management such as DISA? This is a risk (or opportunity) to consider in terms of how the contract may be re-shaped
- The scope of work is incredibly broad which means there are not only many teaming opportunities but many areas where some smaller business can both expand its portfolio of experience but have a real chance to credibly pursue a traditionally well-funded program
- Expect to see the “special” classes of small businesses pursue this as a prime contractor…the scope of work does not appear to be highly differentiated…however an IT company with enough depth in total capabilities could make a credible run at ITCC II
- While funding each year has been solid and the customer (STRATCOM) has a solid mission the trend of consolidation of IT services (see above on how the contract may be issued) may create a risk (or again opportunity) which may in turn impact how this program changes
- Building on the previous point, anyone in the federal contracting market has to wonder what the future holds in terms of future funding. Anyone can make some broad claims about what will happen, good, bad or indifferent. However, it is too early to tell if ITCC II will continue or change based on the incredible uncertainty in terms of future funding and consolidation of programs forced by the need to cut costs. ITCC II looks good today, but it’s far from a sure thing.
Keep tuned to STRATCOM to learn more about the opportunity as it unfolds.
Stay focused. Do your capture homework. There are some great opportunities out there. Good hunting!