Public/private team wins Energy IT services deal

The Energy Department has awarded a competitive sourcing contract potentially worth about $1 billion to a joint venture of federal workers and private-sector companies to manage information technology services.

It is apparently the first time that federal employees have teamed with private industry to win a competitive sourcing deal. Under the President’s Management Agenda, departments must open many activities deemed not inherently governmental to outside competition. The goals are to improve services and cut costs.

This deal could potentially save DOE about $300 million and reduce 1,172 positions –- 172 federal full-time equivalent employees and 1,000 contractor employees –- by about 40 percent. The length of the contract is not known.

“The solution provides for consolidation of IT infrastructure services across the enterprise, as well as support for other IT life cycle services including cybersecurity,” states an e-mail announcement to DOE employees, who were notified of the award yesterday afternoon.

The announcement also states that the department will work with employees and union representatives “to mitigate the impacts of potential staff reductions through attrition and staff reassignment to job vacancies to the maximum extent possible.”

“Specific employee assignments and impacts will not be known until management and human resources staffs have applied all relevant law, regulations and procedures,” the announcement states. “Management will continue to meet its bargaining obligations throughout this process.”

Competitive sourcing, which is governed by the Office of Management and Budget’s Circular A-76, typically pits a private-sector vendor against a team of federal employees, which is referred to as the most efficient organization (MEO). In this situation, the two sides decided to partner on the effort. DOE’s deal teams federal workers with 1 Source Consulting, RS Information Systems and several other small companies, collectively known as Energy Enterprise Solutions (EES).

William Teel Jr., president and chief executive officer of 1 Source Consulting, heads EES. He said the deal could be the largest civilian contract ever awarded to small business.

“We have a 100 percent small-business team as the first-tier primes that work with the federal government,” he said, adding that DOE also gets full small-business credits for the deal.

Teel said the government will still oversee the delivery of IT services while the contractor team will have overall responsibility for delivering those services. He said the residual organization -- a team of federal managers that is not part of the MEO -- will monitor the MEO and EES and oversee the contract’s performance.

“And 1 Source, EES and our partners will have very strong service-level agreements that we will have to work toward,” Teel added.

He said his team will sit down with DOE officials to hammer out some details in the next few days, adding that a 120-day transition period will follow a 30-day protest period.