Army merges two programs to create hefty new contract vehicle

The Army, like many agencies, is consolidating and streamlining programs in search of ways to cut costs. Later this year, the Army plans to combine two major contract programs into a sizeable new program and open it to competition.

The existing Strategic Services Sourcing contract provides the Army with engineering, logistics and business operations support for command, control, communications, computers, intelligence, surveillance and reconnaissance. But rather than compete a second-generation version, which was estimated to be worth up to $30 billion, the agency is combining it with the Rapid Response Fourth Generation program.

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This contract vehicle, dubbed R2-4G, provides services and equipment to research, develop, install and maintain information technology systems across the federal government. The ceiling value for the original R2-3G contract, the precursor, was $16.4 billion.

The new, yet-to-be-named effort will combine the services of the two contract vehicles and create a sizeable target for contractors looking to win work.

Though the Army hasn’t identified the estimated value of the consolidated effort, its value is likely to be less than the $46 billion reached by combining the existing efforts, assuming there will be some cost savings achieved.

Still, contractors can expect serious competition, as the combined contract vehicle could have 25 incumbent companies.

The Army intends to put a team in place to manage the procurement this month. The solicitation is expected in late 2014, with awards anticipated early in 2015. However, no procurement milestones have been finalized.

Consolidation of the two contracts should create heightened competition between incumbents and newcomers alike. Services will be modified, and there will likely be fewer spots to win.

Vendors — existing and potential — may want to consider teaming up to improve their chances and strengthen their bids.

Ashley Bergander is research manager at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.

 
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