IC4I vendor addition protested

A recent Air Force decision to add a third vendor to a $929 million small-business contract that provides security products and services surprised and upset the current contract holders and their industry partners.

The Air Force announced its decision to add Systems Research and Applications Corp. to the Integration for Command, Control, Communications, Computers and Intelligence (IC4I) contract last week, more than a month after the last protest against the original IC4I awards was dismissed by the General Accounting Office.

On Friday, Infotec Development Inc. filed a challenge to SRA's small-business status with the Small Business Administration. Infotec could not be reached for comment.

The Electronic Systems Center (ESC) at Hanscom Air Force Base, Ohio, the manager of the IC4I program, declined to comment on why a third contractor was added. IC4I was always designated a multiple-award program.

"We are pretty disappointed" about the new award, said Jack Littley, vice president and director of corporate development at BTG Inc., one of the two current IC4I contractors. The award "changes the whole dynamics" of the contract, he said. "[But] they are a valued customer, so we are going to do what we need to do."

A spokesman for Cordant Inc., the other IC4I contractor, said only that "we are looking at this as business as usual. It is not really going to affect our strategy at all."

IC4I is a small-business set-aside program that provides products and integration services to the Defense Department intelligence community and select civilian intelligence agencies.

SRA brings the largest team to the program. Its members include powerhouses Computer Sciences Corp., Unisys Corp. and Government Technology Services Inc. The team also includes Van Dyke and Associates, Synectics and Betac, three small companies with extensive experience in the intelligence community.

"It was clear going into this that [ESC] viewed this as 80 percent services and 20 percent products, and they really wanted a systems integrator to lead the team," said Michael Fox, director of advanced programs at SRA. "This is Integration for C4I, a systems integration job."

However, SRA, which markets tools for the Internet, networking and business process re-engineering, also qualifies as a manufacturer under the IC4I program, Fox said.

Several sources on both teams expressed concern that the addition of a large team will exacerbate existing problems at the program office.

"They have been very slow processing contract actions, like changing a [contract line-item number, or CLIN]," one vendor said. "It's going to get even worse now with three contractors."

A spokesman at ESC said the program office had experienced no problems processing actions. In fact, the office was turning around work faster than normal, the spokesman said.

Several industry sources disagreed. In fact, slow turnaround has already cost vendors several jobs, sources said.

"There were some customers who withdrew money they had allocated to the contract and put it against other contracts because they had time-sensitive jobs...and IC4I was not working quickly enough," one source said.

The problem has been especially intense in the opening months of the program. ESC has to process up to 2,000 updates to the product list, including current product numbers and current prices, sources said. These changes result from the 11-month lag between the solicitation and the award. Also, ESC preferred to make these administrative changes after the award rather than deal with them as part of the final bid evaluations.

Program participants predicted ESC's backlog of contract updates will continue. Under the task-order deal, the contractors need the flexibility to tailor task orders to meet the customers' needs, such as adding or modifying CLINs.

Adding a third contractor—with a team as large as SRA's—will mean more changes need to be processed, vendors said.

"In order to make the contract work, something has got to happen to streamline the whole process," one vendor said.

But the problem may get worse before it gets better. The Air Force reportedly plans to formally compete each task order among the three vendors. The program office initially planned a less formal approach, giving the firms more flexibility to work with customers to create task orders.