$1.5 billion DHS FLASH Cancelled

In the aftermath of the cancellation of the Department of Homeland Security’s (DHS) Flexible Agile Support for the Homeland (FLASH) contract, the Government Accountability Office (GAO) spent time analyzing what went wrong in the procurement process. Eight of the original winners, on the other hand, wrote a letter last week instead seeking to focus on what went right for DHS FLASH, in what they deemed an “ambitious experiment to transform the often-flawed model of how the government buys software development services.”

FLASH started out in May 2016 as a 100% small business, indefinite delivery/indefinite quantity (IDIQ) opportunity worth $1.5 billion over a 3-year period of performance.  With a NAICS code of 541519, for “Other Computer Related Services,” the contract sought “Agile design and development services” which would allow for DHS to “be quicker in the design, development, and deployment of secure critical services that impact citizens and internal government users.” This was developed out of a 2012 White House Memorandum, known as the “Digital Government: Building a 21st Century Platform to Better Serve the American People,” which outlined a plan for Federal agencies to provide and maintain better digital service.

Specifically, as outlined in the scope of work, DHS sought to put together “Agile teams” of up to 10 contractors which would use “a group of software development methods based on iterative and incremental development and deployment, where requirements and solutions evolve through collaboration between cross-functional teams that include the government and contractor communities,” using Agile methodologies as well as the strategies described in the “U.S. Digital Services Playbook.” The proposals for such services would be evaluated under a number of factors with a Best Value methodology, through the DHS Procurement Innovation Lab (PIL), a virtual collaboration platform under the Office of the Chief Procurement Officer (OCPO) dedicated to enhancing and accelerating DHS procurement practices.

The final RFP was released on August 3, 2016. On November 28, DHS announced that out of 114 submissions, 13 awardees were selected for FLASH. By the first week of December, companies filed protests against the decision. In February 2017, rather than award more contracts in response to the protests, DHS announced that 2 of the original awardees were removed from the IDIQ, leaving a total of 11 awardees. At the time, DHS emphasized that FLASH would include on-ramp opportunities in the future. That promise did not dissuade more protests, and the second round of hold-ups lead DHS to cancel the entire opportunity.

In it’s own report sent to GAO, during the effort to cancel the procurement, DHS gave two big reasons for cancelling the procurement. Firstly, DHS admitted that it’s evaluation criteria for the best value process was flawed, and did not allow for proper decisions to be made. A particular point for DHS was that the agency failed to obtain enough information from companies in order to properly evaluate pricing for tasks completed at the Top Secret/Sensitive Compartmented Information (TS/SCI) level. Secondly, DHS determined that in the time it took to complete the solicitation and move through the protests, DHS’ needs have already changed, and would be better served through a brand new procurement initiative rather than a modified FLASH.

GAO reported these same findings in it’s cancellation of the second round of protests, but gave particular emphasis to another DHS admission: falsification of documents by the agency. As DHS self-reported, the agency altered documents used in the Best Value Tradeoff Analysis (BVTA) and Technical Evaluation Report (TER) after awards were made, but submitted the altered documents as original evaluation criteria.

While 8 of the 11 awardees were obviously dismayed by the cancellation of a $1.5 billion contract “with the potential to transform some of the firms,” they expressed gratitude for the opportunity to participate in a procurement process which focused more on hands-on, face-to-face evaluations rather than the long and technical written reports which so often accompany a large IT-related opportunity like this. Even though the awardees lost the contract in the end, they  still believe that “FLASH represents the future, even with a few minor tactical flaws.”

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