DHS FLASH 2.0: Should you invest in this procurement?

After the Department of Homeland Security cancelled the $1.5 billion Flexible Agile Support for the Homeland (FLASH) procurement May 26, the vendor community was irritated, and rightfully so. This Small Business (SB) set-aside, procured through the DHS Procurement Innovation Lab (PIL), required time, money, and expertise to undertake a technical challenge. Bidders had to demonstrate specialized skills in the incremental Agile software development methodology with rapid prototyping and better user interfaces.

Numerous protests and a cancelled procurement

After 111 companies applied for a spot on this IDIQ through a process that included limited written proposals, a three-minute initial video, and a four-hour live technology demonstration, DHS made 11 awards that were quickly the subject of 35 separate protests by 10 bidders. Protests centered around numerous mistakes made in the evaluation process. When DHS subsequently cancelled the procurement after six months, the Government Accountability Office (GAO) dismissed the protests. Industry outcry was heated, and rightfully so as 111 small businesses wasted valuable resources responding to the technical challenge and preparing source code.

The technical challenge was indeed an innovative procurement approach, but apparently DHS did such a poor job in recording the live challenges, that they could not go back to review results to fully compare and discriminate offers. Inexcusably, they also did not have enough qualified evaluators to review the source code. These and other problems with the conduct of the price evaluation related to cost realism made it more feasible to cancel the procurement, as DHS noted in a letter to GAO.

PIL issues data center consolidation procurement

The same month, the PIL was busy issuing the U.S. Customs and Border Protection (CBP) Data Center Support Services (DCSS) RFP, a data center consolidation effort that would combine five contracts, the largest of which is held by IBM. Those interested in participating were required to submit a Notice of Intent to participate in Step 1, an orals presentation. This “innovative” procurement had some interesting elements—interesting, but not particularly innovative.

The Step 1 orals presentation centered on Mission Suitability. Bidders submitted presentations on up to five relevant projects (these could include both prime and subcontractor efforts) as well as answers to two advance questions. Bidders were told to also expect additional technical questions at the live orals; however, sources say these were very minimal. Post-orals, bidders awaited word on Step 2. Despite nine amendments and three sets of Q&A through June 27, the Lab subsequently limited transparency on this procurement.

In other words, there were no further FBO postings. Those companies participating received Advisory Notice as to whether they were viable for Step 2, and only those companies participating in orals received the final RFP and the subsequent four amendments and clarifications. CBPP issued Advisory Notices on July 31. The final RFP was released directly to Step 2 vendors on August 8 with a three-week turn, but was not posted to FBO. The award, made to Accenture for an undisclosed sum, was not posted to FBO nor publicly announced.

No past performance evaluation

Interestingly, the Step 2 written submission included both technical/management and cost/price factors, but DHS never requested any past performance references. The orals in Step 1 asked for corporate experience but did not require that bidders provide points of contact for past performance checks, and neither did the Step 2 submission. Corporate experience is not the same as past performance. Corporate experience covers what work the bidder has done, but past performance focuses on how well they performed.

It is highly unusual for a best value trade-off procurement not to require past performance checks. In fact, FAR 15.304 requires that the evaluation process for negotiated competitive acquisitions include past performance except as follows: “Past performance need not be evaluated if the contracting officer documents the reason past performance is not an appropriate evaluation factor for the acquisition.” Unsuccessful bidders may be wondering whether the reason for not evaluating past performance was indeed documented in the contract file. It would be unsurprising if protests ensue as a result.

Even though the PIL is part of DHS’ Acquisition Innovations in Motion (AIiM), “a series of initiatives and industry activities focused on reciprocal learning between DHS and industry,” the DCSS procurement has been rather hush-hush. This lack of transparency runs counter to other AIiM initiatives including Reverse Industry Days, SB Outreach sessions, and DHS Strategic Industry Conversation events to name a few.

PIL’s website states that they strive to increase efficiency and effectiveness of procurements by experimenting and then sharing results. They are indeed experimenting, but sharing and institutionalizing best practices has been limited.

Should you participate in FLASH 2.0?

Which brings us back to the possibility of FLASH 2.0. DHS announced last summer that they are considering issuing FLASH 2.0 in FY18. They plan to review lessons learned from the cancelled acquisition and revise the procurement accordingly. FLASH 2.0 is now on Deltek’s list of top 10 SB opportunities. Deltek estimates that the new RFP will be issued in third quarter of FY18.

The 11 winning bidders sent an open letter to DHS in late July urging the agency to learn from FLASH and push forward. The letter includes recommendations for improving the next procurement, and encourages DHS to continue seeking innovative ways to procure software. Clearly, at least the winners want a second shot at winning this vehicle.

It is a sound idea for SBs in the Agile space to watch this procurement closely and do what they can to shape the future of FLASH 2.0. However, proceed with caution as the PIL’s experiments do not always have a happy ending.

This article appeared in Washington Technology on October 18, 2017.

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