DHS procurement office eyes contract hybrids

Contracts would blend approaches

The Homeland Security Department’s Office of Procurement Operations is considering using hybrid contracts that include some performance-based provisions as a way to reduce high-risk acquisitions, according to a senior DHS procurement official.

In July, the Office of Management and Budget issued a memo that states that agencies should try to reduce by at least 10 percent the money they spend in fiscal 2010 -- this fiscal year -- on noncompetitive, cost-reimbursement, time-and-materials, and labor-hour contracts.

Although agencies are supposed to be using performance-based contracting as much as possible, that approach is not suitable for all procurements, said Soraya Correa, director of DHS's Office of Procurement Operations. Speaking at a breakfast Dec. 2 hosted by the American Council for Technology and the Industry Advisory Council, Correa said her office is looking at hybrid contracts as a solution.

“A lot of our contracts that you’re going to see going forward are going to be hybrid contracts where there will be line items that are performance based, hopefully moving toward 100 percent performance based down the pike, but recognizing that not everything is ready for performance based,” she said.

Correa said she agreed with the initiative to reduce high-risk contracts and called it a smart move. However, she said it needs to be done in an efficient way that doesn’t hurt the acquisition community — both contractors and agencies.

Meanwhile, Correa said any contract that’s not managed effectively is high risk, and her office is reviewing its inventory of contracts to identify contracts that are high risk and methods to curtail that risk.

In addition, Correa said DHS plans to issue a draft solicitation for the follow-on to its Enterprise Acquisition Gateway for Leading Edge Solutions contract. The agency plans to issue the draft request for proposals for the EAGLE II procurement by the end of March, and the two final RFPs — one for small businesses and one that’s unrestricted — are planned for the third quarter of fiscal 2010.

Correa said that after gathering feedback from industry and from EAGLE's government users, officials are meeting to determine a strategy for EAGLE II. She said they have not yet made a decision on what the draft RFP will include, and DHS hasn’t started writing it yet.

About the Author

Ben Bain is a reporter for Federal Computer Week.

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Reader comments

Tue, Dec 8, 2009 Peter G. Tuttle, CPCM

Ms.Correa's comment that ".... any contract that’s not managed effectively is high risk..." is on-target. Whether it be FFP, T&M, cost reimbusement or a hybrid with a mixture of contract types, the key, perhaps the most important key to effective contract forumation, evaluation, award & execution is to manage the contract correctly. I know, this is easier said than done, but most of the issues all come back to this - effective management and decision-making.

Fri, Dec 4, 2009 Jim Vann

Hybrid contracts constitute a perfectly sensible approach and it is good to see DHS acknowledging their potential. I never understood why so many in the contracting community tend to view PBA and contract types as strict 'either-or' decisions. Care needs to taken, however, to ensure that internal controls are in place for contract billing, reporting, and cost charging purposes.

Fri, Dec 4, 2009 Jon Weiss Radcliff, Ky

How quaint, the DHS wants "hybrid" contracts. That way they can have a contract that isn't really a contract, I suppose that next they will make commitments that aren't really commitments. Does this administration EVER plan on doing ANYTHING that is not an equivocation?

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