Spy Agency Multiple-Award Contracts Bring 80 Companies $20 Billion

Bloomberg Government (bgov.com)

November 20, 2012

BGOV Insight

Spy Agency Multiple-Award Contracts Bring 80 Companies $20 Billion

By Brian Friel

Intelligence agencies are ordering at least $20.5 billion in technology and professional services through 2017 from 80 companies using 20 classified multiple-award contracts, a Bloomberg Government analysis found.The Defense Intelligence Agency, the National Geospatial-Intelligence Agency and other spy agencies use multiple-award contracts, or MACs, to purchase billions of dollars in classified technology and professional services work.

Only ceiling amounts, rather than actual spending on the MACs, are reported in publicly available databases.

Companies seeking intelligence contracts can compete for positions on the MACs when they expire, usually every five years, or reach their ceilings. The 80 prime contractors also may need subcontractors to help them fill orders.

It’s unclear how much of the estimated $50 billion in fiscal 2013 intelligence contract spending will go through MACs.

The four defense intelligence agencies that run the 20 classified MACs are preparing to award in fiscal 2013 at least six new ones worth up to $2.6 billion.

SAIC Inc. participates in eight of the 20 intelligence agency MACs identified, the most of any company. Booz Allen Hamilton followed with seven MACs; BAE Systems and CACI International each have six; Northrop Grumman has four; TASC, OGSystems and Lockheed Martin have three each.

Positions on MACs don’t guarantee revenue. Intelligence agencies first select companies to participate. Those companies then compete to win orders, and through them, revenue. One in four unclassified federal procurement dollars flow through MACs, a March 27 Bloomberg Government Study found.

The 20 intelligence agency MACs have eight prime contractors each, on average.

A separate Bloomberg Government analysis found that about $7 billion, or 14 percent of estimated intelligence contract spending in fiscal 2013, probably will be for personnel who perform “core intelligence” work, including collection and operations, mission management and scientific and engineering projects. MACs appear to be a primary means of acquiring those services.

The largest MAC by potential value is the Defense Intelligence Agency’s Solutions for the Information Technology Enterprise, or SITE. DIA and other intel agencies can place up to $6.6 billion in orders on SITE from May 2010 through May 2015.

The 11 SITE contractors perform systems integration and other technology work. Through the end of September 2011, agencies placed 23 SITE task orders worth up to $872 million. General Dynamics won the most, $327.6 million. In fiscal 2012, DIA stopped publicizing the value of awarded task orders.

This summer, SAIC Inc. won a SITE task order for Army intelligence technology support services with a $150.7 million bid, according to a bid protest decision in SAIC’s favor. The Army picked SAIC over General Dynamics, which bid 10 percent higher, $165.8 million.

Half the 20 active intelligence agency MACs are administered by DIA. The second largest is the $5.6 billion Solutions for Intelligence Analysis II, which was awarded this year to 11 companies and runs through 2017. The predecessor contract ran from 2007 to 2012 and had a ceiling of $2.3 billion for eight prime contractors.

The increase in the number of prime contractors follows a government-wide trend of selecting larger numbers of companies to compete for MAC orders.

The National Security Agency has made public the existence of two MACs. Four large companies compete for technology services orders on NSA’s Agency Extended Information System Services, or AXISS, contract.

NSA issues orders for professional services to 34 small businesses through the $800 million, six-year Set-Aside for Small Business II, or NSETS II, contract. It’s slated to expire in late 2013, when competition for a follow-on contract may give small businesses a new chance to win access to NSA work.

The National Geospatial-Intelligence Agency also is recompeting several MACs. Only small businesses will win slots on the Enterprise Support for Administrative Services, or ESAS, contract.

ESAS will replace the $102 million Administrative Services, or AdminServ, contract, due to expire by the end of fiscal 2013. Three small companies plus SAIC compete for AdminServ orders.

Setting aside MACs for small businesses is a government-wide trend. By law, the government is supposed to award small companies 23 percent of all contracts by value.

NGA is seeking bidders for a suite of contracts called Geospatial Intelligence (GEOINT) Data Services, or GDS. GDS will include both single-award and multiple-award contracts, which will replace the Global Geospatial Intelligence MAC. The six companies on that MAC won the right to compete for up to $750 million in orders from 2003 to 2013. The largest GDS multiple-award contract is expected to have a ceiling of $1 billion for five years.

The geospatial agency will award several other MACs worth $100 million or more each by the end of fiscal 2013, according to a February 12 presentation by NGA officials. These contracts will cover technology hardware, systems engineering and intelligence analysis.

NGA also operates the $1 billion, five-year Total Application Services for Enterprise Requirements, or TASER, MAC. TASER runs through May 2015; 18 companies hold slots.

The National Reconnaissance Office, which manages spy satellites, doesn’t provide much information about its MACs. One is the $2.6 billion Rapid Operational Multi-INT Omnibus, or ROMO.

There are at least four ROMO prime contractors working on “the development of next generation architecture to permit the large scale interoperability of applications within the intelligence community,” according to a Textron Systems presentation.

The U.S. intelligence community includes 16 agencies overseen by the Office of the Director of National Intelligence. Some of those agencies issue unclassified contracts, while some provide no public information about their MACs.

Spy Agencies With MACs

Bloomberg Government identified classified MACs at four intelligence agencies, all part of the Defense Department.

Defense Intelligence Agency — Coordinates intelligence support for the military (Joint Base Anacostia-Bolling, Washington, DC)

National Geospatial-Intelligence Agency — Analyzes maps, photos and geospatial information for intelligence purposes (Ft. Belvoir, Virginia)

National Reconnaissance Office — Designs, builds, launches and maintains intelligence satellites (Chantilly, Virginia)

National Security Agency — Analyzes signal intelligence, which is voice, data and other communications (Ft. Meade, Maryland)

Source: DIA mission, DIA HQ, NRO HQ, NRO mission, NGA HQ, NGA mission, MSA mission, NSA HQ

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