DHS woos small businesses for new IT buying programs

Homeland Security Department officials are urging industry and small businesses to participate in two new information technology procurement programs.

DHS released draft requests for proposals for First Source, which would cover IT commodities, and Enterprise Acquisition Gateway for Leading Edge (EAGLE), which would cover IT support services.

To encourage small-business participation, only companies with 150 employees or fewer can bid on First Source. EAGLE will have open bid solicitations in addition to those only for small businesses.

DHS spends $6 billion a year on IT and wants to spend as much of that as possible through those programs during the next five years, said Greg Rothwell, DHS' chief procurement officer, at an industry day presentation last week in Washington, D.C.

EAGLE contracts will have a five-year base with two one-year options for renewal, said Bill Thoreen, DHS' contracting officer in charge of the EAGLE procurement. Vendors can submit proposals for any or all of the five categories, he said.

But bidding will be competitive, Thoreen said. "This won't be an 'everybody gets a contract' type of procurement," he said.

First Source will take advantage of DHS' buying power to get the best prices and service possible, said Michael Smith, First Source's contracting officer. The department wants a fast, easy, effective way to access vendors' online catalogs and pay with government purchase cards, he said.

One expert, however, fears that DHS hasn't considered some significant repercussions of limiting First Source to small businesses. Few small companies have the management and financial infrastructure in place to handle the multimillion-dollar contracts that DHS generates, said Bob Guerra, principal at Guerra, Kiviat, Flyzik and Associates.

"I defy anybody to show us a private-sector best practice where a company of 186,000 employees is going to 150-person companies for their PC and IT fulfillment," Guerra said.

Another potential hitch is that if small companies can get the best prices from IBM, Hewlett-Packard and other IT manufacturers, CDW Government and other large integrators that already do millions of dollars of business with the manufacturers can demand lower prices, too, Guerra said.

A better solution for DHS would be to open First Source to large businesses, too, he said. DHS could work like the Army and Air Force by directly approaching small businesses it liked or have the large businesses compete, Guerra said.

DHS plans to issue the First Source and EAGLE RFPs early next month and award contracts in early 2006. Rothwell said he expects to finish both programs within nine months.

Once the RFPs are released, DHS anticipates holding two preproposal conferences for EAGLE within 10 days of the final RFP release, including a conference only for small-business owners.

DHS will accept written comments for both RFPs at dhsfirstsource@dhs.gov and dhseagle@dhs.gov until Aug. 26.