Deja vu - $3B DEIS II

The Defense Information Systems Agency last week awarded the five-year, $3 billion DEIS II program, which could become the largest systems integration contract ever, to the same six prime contractors who held the original Defense Enterprise Integration Services pact.

The primes - BDM Federal Inc., Boeing Information Services, Computer Sciences Corp., Electronic Data Systems Corp., Lockheed Martin Corp.'s Services Group and Unisys Corp. - represent a huge slice of the federal information technology vendor community. Together they employ 245 subcontractors, with the number of subcontractors per team ranging from 32 to 48.

DEIS II offers federal customers a broader scope of services than its predecessor. DEIS was designed to focus on business process re-engineering, legacy systems migration and prototyping services. DEIS II, however, covers full-scale applications development, installation and support.

This will broaden the program's appeal to the CINCs (commanders in chief) and military services looking to roll out applications to users in the field, according to DISA. Defense Department agencies and centralized development centers such as the Joint Logistics Systems Center were the major buyers under DEIS.

The key DEIS II mission is to "build the Defense Information Infrastructure around the guidelines and standards that are DOD policy," according to Michael Mestrovich, deputy director of DISA's Joint Requirements Analysis and Integration Directorate.

DEIS II will create applications using the Common Operating Environment, the Defense Message System and the Defense Information Systems Network, he said.

DEIS II was awarded just as DEIS closed in on its $1.185 billion ceiling. DEIS will hit the $1.165 billion mark by the end of this month and will reach its ceiling in August, DISA said.

The agency expects to start processing task orders on DEIS II later this month and will meet with its contractors today to go over ordering guidelines.

DEIS II's ceiling is $2.5 billion for the Defense Department and $500 million for civilian agencies.

DISA received a surprise seventh bid for DEIS II in addition to the bids from the DEIS primes, though it declined to identify the additional bidder.

The pact was awarded in 337 days from the date DISA's acquisition strategy was approved - six days earlier than the July 8 projected award date.

Increased Competition

DEIS was a trend-setting pact when it was awarded in 1993, but DEIS II enters what is potentially a much more competitive landscape. In the years following DEIS, a number of indefinite-delivery, indefinite-quantity multiple-award contracts have been awarded. Those include the General Services Administration's $830 million MAIQ support services pact and the Transportation Department's $1 billion Information Technology Omnibus Procurement (ITOP).

The National Institutes of Health, meanwhile, plans to launch its Chief Information Officer Solutions and Partners services program later this year.

Bob Dornan, senior vice president of Federal Sources Inc., said the growth of IDIQ services pacts has left buyers with "an exploding set of [solutions] at their immediate disposal."

Mestrovich, however, said he does not believe DEIS II is in competition with the other vehicles. "I don't see a DEIS clone out there that I can recognize," he said. "We don't see ourselves in competition."

But DISA wanted to make sure DEIS II offered labor rates comparable to, or lower than, those offered on other vehicles. A DISA press release said the six awardees offered prices that "compare favorably or are lower than other similar contracts." The press release cited ITOP and DISA's Center for Information Systems Security - Infotec Technical Services deal.

A labor category comparison chart provided by DISA shows that DEIS II contractors are offering rates lower than ITOP in many categories, such as computer systems analyst, systems operator, training specialist, communications network manager, computer security systems specialist and technical writer/editor.

DISA officials and vendors believe that DEIS II's Defense Information Infrastructure orientation set it apart from other services contracts.

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