Army Information Technology Enterprise Solutions-2 Services Contract

Contracting personnel from the Army and other Federal agencies who are involved in information technology service acquisition decisions should read this report because it provides an assessment of how the Army can improve small business participation in indefinite-delivery, indefinite-quantity IDIQ contracts. The Inspector General IG, DoD initiated the audit of the Army Information Technology Enterprise Solutions-2 Services ITES-2S contract because of the material impact this contract will have on the acquisition of information technology resources within DoD and the Federal Government. The ITES-2S contract has a ceiling price of 20 billion, a 3-year base period, and three 2-year option periods. The purpose of the ITES-2S contract is to support the Army enterprise infrastructure and infostructure goals with information technology services worldwide. The U.S. Army, DoD, and all other Federal agencies will be authorized to fulfill requirements under the ITES-2S contract. The Army Information Technology, E-Commerce, and Commercial Contracting Center contracting officials did not justify consolidating contract requirements for the ITES-2S contract. Also, the officials selected an inappropriate North American Industry Classification System NAICS code in the solicitation of the contract. As a result, ITES-2S is a bundled contract that improperly restricted small business competition and was unsuitable for small business award. Bundling a contract without justification violates U.S. Code and Federal regulations. The Army Contracting Agency internal controls were not adequate. The IG identified material internal control weaknesses on the adherence of the ITES-2S contract NAICS code to the Federal Acquisition Regulation requirements. The IG requested that the Assistant Secretary of the Army for Acquisition, Logistics, and Technology halt all ITES-2S contracting activity and future task orders until after the problems identified in this report are resolved.