What Went Wrong with DHS' Agile Contract?

A Homeland Security Department effort to make agile services easier to buy appears to be over.

DHS recently filed a motion with the Government Accountability Office noting its intent to cancel a new $1.54 billion contracting vehicle that pre-approved certain vendors selling agile software services. The system, called Flexible Agile Support for the Homeland, or FLASH, has been halted over the past several months by protests from multiple vendors that didn’t make the cut.

In a May 26 letter to GAO obtained by Washington Technology, a DHS attorney-adviser requested open protests be dismissed because the department intended to cancel the contract altogether. FLASH “no longer represents DHS’ needs” and was dogged by “significant errors and missteps,” the letter noted.

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The contract’s cancellation is “sad news,” Michael Fischetti, executive director of the National Contract Management Association, a trade association for acquisition professionals, told Nextgov. Instead of using existing systems like the General Services Administration’s Schedule 70 for IT services, DHS attempted to create a new contracting process that featured young tech companies that don’t traditionally sell to the government, and aimed to reduce the time it takes to issue task orders.

“Here’s an agency trying to do the right thing,” he said. But FLASH’s cancellation is a signal that acquisition reform is very difficult in practice, “a validation of things we don’t like to see” in government. He suggested DHS might be under White House pressure to cut down on expensive contracts with operational challenges.

Thirteen companies had been awarded spots on the contract and DHS officials have said there were about 114 applicants. Those companies were subjected to a technical challenge to demonstrate skills and specialize in an incremental software development methodology labeled “agile.”

Nextgov has requested comment from DHS and GAO about next steps.

DHS’ letter to GAO outlined a litany of problems with FLASH including that:

• The criteria DHS staff used to assess applicant companies didn’t allow them to “reasonably evaluate the offerors,” potentially resulting in an “unequal treatment of offerors’ weaknesses and risks.
• DHS did not require offerors to provide sufficient information to assess whether the prices proposed were realistic to perform work on task orders.
• DHS’ price evaluation report doesn’t make it clear how the team evaluated price realism.

DHS may ordinarily have re-evaluated proposals or revisions to those proposals instead of cancelling the awards altogether, but “the information in the record does not permit such a re-evaluation,” the letter noted. The department’s video recordings of the technical challenge are of “varying quality” so it is “infeasible to re-evaluate every offeror based on those recordings." DHS also doesn’t have the source code from at least two offerors, nor the “particular knowledge” needed to evaluate agile software services, the letter stated.

DHS plans to look for a “new set of requirements that better meet DHS’ needs” so it could improve the evaluation process “sometime after this calendar year.”

The FLASH contract followed GSA’s agile blanket purchase agreement, another acquisition experiment. GSA’s internal tech consultancy 18F pre-approved a handful of vendors to sell agile development services to all agencies but was soon halted by protests by companies not selected and argued the technical challenge evaluation process was unfair.

DHS’ FLASH was "intended to be a pilot," DHS Chief Information Officer Luke McCormack said during an AFCEA event in Washington last year. “We’re going to put FLASH out there … and will probably have a FLASH 2.0.”

Critics argue DHS should have used existing contracting systems instead of attempting to build a totally new large-scale vehicle. FLASH’s cancellation is likely a reflection of the challenges agencies have setting up new initiatives, and observers should not take it as a sign agencies don’t have an appetite for agile software development services.

“What it really says is agencies need to step back and think about how they are going to market for these kinds of [agile] services,” Brian Friel, founder of Nation Analytics, a data firm tracking contracts, told Nextgov. “Does DHS, does EPA really need its own blanket purchase agreement? Or could they use existing services like Schedule 70?”