DHS’ RFP could do away with competition: PSC

As you know, FFRDCs were established and authorized over 60 years ago to perform specific tasks that could not be performed by government organizations or by for-profit contractors. The Homeland Security Act of 2002 authorized the establishment of one or more FFRDCs to provide independent analysis of homeland security issues. PSC supports an appropriate utilization of FFRDCs to meet required needs where the required needs are not prevalent in the private sector. Our view is supported by language in this DHS RFP stating that FFRDCs should only perform functions “that cannot be performed as effectively by in-house or contractor resources.”³ However, we are concerned by terminology within the RFP that appears to represent a broad scope of work for the awarded FFRDC operator. The RFP states that, “the HSOAC refocuses the existing Homeland Security Studies and Analysis Institute (HSSAI) FFRDC with comprehensive and renewed core competencies in operational analysis, but does not change the fundamental purpose or mission of the HSOAC as DHS’s sole studies and analysis FFRDC with continued support for all DHS components…” The core competencies include FFRDC performance of acquisition studies; organization studies; and regulatory, doctrine and policy studies. These are capabilities that are widely available within non-FFRDC private sector entities. Thus, we question how DHS could have conducted comprehensive market research in determining that only an FFRDC could perform the scope of work within the solicitation.

Furthermore, it is unclear why a ceiling value of $500 million has been established under the solicitation, particularly given the fact that obligations under the predecessor HSSAI contract were well below the $286 million ceiling associated with that single award contract. It is difficult to discern how such a dramatic increase in the estimated contract value ceiling is not tied to an anticipated expansion of the scope of work. If this is the case, there should be significant concern that the solicitation is solely designed to shift vast amounts of work away from federal employees or from non-FFRDC contractors that routinely compete for, and successfully perform, similar tasks under a wide range of contract vehicles.

Over the years, the DHS FFRDCs have performed, and continue to perform, valuable and important work for the department. At the same time, as the result of the changed dynamics and realities of the department’s budget and the industrial base that supports the department, it is important to reassess the proper role of FFRDCs to ensure that they continue to serve the unique functions they were designed for and to enhance competition for those portions of work now performed by FFRDCs that are more appropriately performed by other entities.

Frequent competition is the department’s best tool for ensuring it has such access. Thus, DHS should ensure that all work that can be performed by independent, for-profit, tax-paying contractors be opened to full competition rather than sole-sourced to an FFRDC.

We strongly encourage you to review this solicitation and DHS FFRDC policy to ensure that DHS is appropriately utilizing FFRDCs generally before committing DHS to another five year single award Indefinite Delivery, Indefinite Quantity (IDIQ) arrangement with an FFRDC.  That review should focus on these core questions:

1. Does DHS Management Directive (MD) 143-04 from May 25, 2007 need updating?
2. Is the FFRDC charter consistent with the unique and special purpose of FFRDCs as designed?
3. Are there elements of the work contemplated under the charter that are appropriately competed among private sector providers? Is there thorough market research to support the analysis?
4. What are the actual costs associated with FFRDC performance? How do those costs compare with other appropriate sources, including for-profit contractors, and where are there other opportunities for cost control?
5. To what extent are individual FFRDCs performing work for other than their sponsoring agency that exceeds the initial purpose of the FFRDC and could be competed among the broader private sector?

Continuing down the current, myopic path will fail to increase competition in the DHS marketplace, reduce departmental costs, or provide the best services available to the homeland security enterprise.

Thank you for your consideration of this issue. If you have any questions, please do not hesitate to contact me or Alan Chvotkin, PSC’s Executive Vice President and Counsel.

¹ PSC is the voice of the government technology and professional services industry, representing the full range and diversity of the government services sector. As a trusted industry leader on legislative and regulatory issues related to government acquisition, business and technology, PSC helps build consensus between government and industry. Our nearly 400 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Many of our member companies provide services of all kinds to DHS and its componentagencies.
² FedBizOpps solicitation #HSHQDC-15-R-00089, September 14, 2015, available at https://www.fbo.gov/index?s=opportunity&mode=form&id=fac22c9b4e44434abc2c013768725e7a&tab=core&_cview=1
³ FedBizOpps solicitation #HSHQDC-15-R-00089, Section C.1.1.4, pg. 8. However, the regulations do not sanction use of FFRDCsfor“effective”performance;rather,thestandardtobeassessediswhethercapabilityexistsintheprivatesector.

Sincerely,

Stan Soloway, President & CEO

cc: Soraya Correa, Chief Procurement Officer, DHS