ITES-2S protest settlements reached

The Army has settled with five companies that successfully protested the Information Technology Enterprise Solutions-2 Services (ITES-2S) contract awards. The Army will allow the previously excluded companies to join the contract, Army officials said today.

ITES-2S is a $20 billion, nine-year contract vehicle meant to be the cornerstone of the service’s IT procurement for the next decade. It is a follow-on to the $1 billion ITES-Enterprise Mission Support Services Solutions contract issued in 2003.

Settlement agreements with five companies -- BAE Systems North America, Northrop Grumman, NCI Information Systems, Multimax and Pragmatics -- were signed last week, and individual contract documents will be signed this week, said Kevin Carroll, chief of the Program Executive Office for Enterprise Information Systems. PEO-EIS and the Army’s IT, E-Commerce and Commercial Contracting Center administer ITES-2S.

As full participants in ITES-2S, the companies will compete for task orders throughout the life of the contract, Carroll said. Army customers could begin ordering services using ITES-2S early next month, he said.

As part of the settlement agreements, the Army will not reimburse the protest companies for legal fees and other costs associated with the protest process, Carroll said.

The settlement will create increased competition for task orders, which is good, said Lee Harvey, Carroll’s deputy at PEO-EIS. However, administrative and logistical challenges will increase, he said.

The Army originally issued ITES-2S awards to 11 large and small contractors April 14. The five companies protested to the Government Accountability Office in May. Later that month, the Army withdrew the awards, making the protests moot. On July 13, the Army reissued the awards to the same 11 companies.

The same five companies filed new protests in July. Last month, GAO sustained the new protests and recommended that the Army re-evaluate the awards.

GAO agreed with the protesters’ assertions that the Army’s evaluation of proposed labor rates was unreasonable and that the contracting agency failed to conduct meaningful discussions with bidders, according to GAO documents.

The original ITES-2S large-business awards went to Booz Allen Hamilton, CACI-Information Systems Support, Computer Sciences Corp., EDS, General Dynamics, IBM, Lockheed Martin Integrated Systems and SAIC. Apptis, QSS and STG won the small-business prizes.

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