Recompeting existing contracts will drive the value of the largest federal technology contracts up 50 percent, with few new ideas being introduced.
Information technology spending at civilian agencies should climb significantly next year, but much of the money will be spent renewing or replacing existing contracts, according to a market research firm.
The total value of the 20 largest federal IT projects in 2010 is 50 percent higher than the previous year, increasing from about $120 billion to $180 billion, according to a list compiled by INPUT and presented in a webinar on Tuesday.
All but two of the projects are contracts that will be recompeted or are consolidations of existing pacts.
"The prevalence of recompetitions and contract consolidations are dominating the list," said Kevin Plexico, senior vice president of research and analysis at INPUT. "There are really no large systems integration contracts to build something new, most of the contracts are recompetes of existing contracts that are really task order-based vehicles."
He attributed much of the increase in spending to $113 billion in contracts at the largest civilian agencies, which are choosing more often to compete their own task-order vehicles instead of making use of the General Services Administration's contract offerings.
"It becomes a matter of shaping the contract to suit their needs and situation versus relying on GSA and paying fees to use GSA vehicles," Plexico said. "We've generally seen dollars increasing for agency-specific task-order based contracts, which is keeping spending with GSA relatively flat."
For example, the Homeland Security Department's EAGLE II contract will replace the EAGLE contract as DHS' preferred vehicle for procuring IT services. Plexico said he expects DHS to award EAGLE II during the second quarter of fiscal 2010 with a ceiling of $45 billion. The original contract had about $2.8 billion in business during fiscal 2007 and $3.3 billion during fiscal 2008.
DHS is choosing to recompete EAGLE II rather than exercising the original contract's two option periods because many of the small business vendors originally awarded under EAGLE have outgrown their small business and disadvantaged designations. DHS is looking for a new set of small business vendors for EAGLE II. The contract will include separate tracks for different classes of vendors, including small, businesses, service-disabled owned companies and firms located in HubZones, among others.
The Army also will renew its S3 strategic sourcing vehicle sooner than expected. The existing contract has a $19 billion ceiling, but INPUT forecasts the Army will hike the new vehicle's cap to $30 billion when the contract is awarded next fall. Plexico said the contract will offer engineering, logistics and systems support. The National Institutes of Health also will recompete its CIO-SP3 governmentwide acquisition contract in 2010, which is expected to have a ceiling of $20 billion. The contract will include a significant set-aside component for small businesses in the health IT field.
Noticeably absent from the list of top opportunities is any mention of cloud computing, despite the Obama administration's focus on embracing the procurement model. Plexico said it's probably too early to expect much spending in this area.
"There's a lot of attention paid to emerging technologies at the policy and strategic level, but when you talk about brass tacks and where dollars are spent, relatively few dollars are spent on those technologies," he said. "Most are on routine services contracts that keep the government's wheels moving."