Transportation readies $10B ITOP follow-on procurement

The Transportation Department released Friday a draft solicitation for a seven-year, $10 billion multiple-award services contract that will be open to agencies throughout the government.

The Information Technology Omnibus Procurement-II contract is a follow-on to the popular ITOP, a 2-year-old contract that has almost reached its $1.13 billion ordering ceiling. Like its predecessor, ITOP-II covers nearly every aspect of information resources management-related services.

The significantly higher dollar figure for ITOP-II reflects the demand for IT services in the government, said Richard Lieber, manager of DOT's ITOP program.

Under ITOP-II, DOT wants to make it easier for small businesses to get government work. "We want to dispel the perception that once [governmentwide contracts] are awarded, small companies are at a disadvantage," Lieber said. As a result, DOT will award a minimum of two 8(a) and two small-business subcontracts per functional area to encourage these companies to participate.

Also, prime contractors will have the flexibility to add subcontractors as needed. "The primes can identify the best company to provide the best mix of people and skills for the job," Lieber said. Unlike the original ITOP, DOT will no longer guarantee a minimum of $3 million to each contractor per year.

"These methods are intended to force competition," Lieber said. He added that despite General Accounting Office statements maintaining that agencies misuse multiple-award contracts to circumvent competition, as of the end of March, 71 percent of the dollars awarded under ITOP had been competitively awarded.

ITOP-II will be one of the largest governmentwide contracts available, said Bob Dornan, senior vice president of Federal Sources Inc. "I don't see anything that comes close to this magnitude other than FTS 2000, which is averaging about half a billion a year," Dornan said.

Government agencies estimate they will spend about $11 billion in fiscal 1998 on services, Dornan said. However, competition for this business will be stiff. "There will be head-to-head competition among similar contract vehicles, but competition will also come from radically different [vehicles, such as the General Services Administration's] seat management contract," Dornan said. "There are a lot of people counting on those same bucks."

Agencies will need to be creative, Dornan added, as they compete for the same customers. "Agencies will do what it takes to drive business through their contract."

Under the first contract, DOT awarded 20 contracts to 17 companies, which compete for business within three functional areas. Similarly, there are three functional areas under ITOP-II: information systems engineering, such as software engineering; systems operations and management, such as network support; and information system security, including disaster recovery and virus detection. Lieber declined to say how many vendors would get awards.

Although ITOP is primarily a services contract, hardware and software are also included. Under ITOP-II, DOT removed the 25 percent limitation on hardware and software purchases, but those purchases must be critical and related to the services to be performed, Lieber said. "We don't want this to turn into a hardware and software contract," he said.

A final solicitation for ITOP-II is expected this summer, with an award in the fall. An industry day is scheduled for May 12.