Army whittles ITES2 competition

Army officials have chosen 17 companies to compete for the new Information Technology Enterprise Solutions 2 Services (ITES-2S) performance-based contract — a seven-year deal worth $20 billion, said an industry official whose company received notification this week from service contracting officials.

Companies selected to compete for ITES-2S include:

• BAE SYSTEMS IT
• Booz Allen Hamilton
• Computer Sciences Corp.
• EDS
• FC Business Systems
• General Dynamics Network Systems
• IBM Business Consulting Services
• Information Systems Support
• Lockheed Martin Integrated Systems
• Multimax
• NCI Information Systems
• Northrop Grumman IT
• Pragmatics
• QSS Group
• SETA
• Science Application International Corp.
• STG

ITES-2S will come with a financial ceiling of $20 billion. Contract awards cover three years, with two, two-year options, said David Gardner, senior vice president for sales and marketing at STG. He confirmed the 17 companies and the contracting details.

Army officials expect to launch the ITES-2S contract soon, said Kevin Carroll, program executive officer in the Army Program Executive Office for Enterprise Information Systems, which recently held an industry event where Carroll spoke. A draft request for proposals is expected in May, followed by contract awards in the summer. Four large and four small businesses will receive indefinite-delivery, indefinite-quantity deals, Gardner said.

"STG is honored that the Army has selected the company as a premier small business provider to compete for ITES-2S," Gardner said.

The Army needs a new contract for enterprise IT services because they expect to exceed the $500 million ceiling for the services portion of the ITES contracts awarded in 2003, which also included a $500 million portion for hardware. Officials say the program helps them in managing IT assets, conducting performance-based contracting and supporting soldiers.

Analysts have criticized the dollar cap on the service portion of ITES. The Army cannot do anything enterprisewide related to IT services for $500 million over five years, many observers said.