Government Contracting First Quarter Review and Second Quarter Projection

The first quarter of fiscal 2012 got off to an all-too-familiar start, with federal agencies operating under a series of short-term continuing resolutions, instead of year-long budgets. Still, that didn’t stop agencies from awarding contracts worth more than $45 billion.

With budgets now in place, that pace likely will speed up. 3,500 solicitations worth up to $325 billion have been identified planned for release early this year.

First, let’s take a look at some of the more notable contract awards from the first quarter:

The General Services Administration awarded more than 20 contracts under its $5 billion Connections II contract vehicle. A re-competition of the original Connections contract, the program provides telecommunications infrastructure equipment and services.

Air Combat Command awarded almost 30 contracts under its $4.7 billion Contract Advisory and Assistance Services IV vehicle, which covers technical assistance and systems engineering.

The Office of Personnel Management awarded contracts to CACI, U.S. Investigations Services and KeyPoint Government Solutions for background investigation fieldwork services worth $2.5 billion. These contracts pay for the investigations needed to clear government employees and contractors for sensitive work.

Naval Air Systems Command awarded its $2 billion Training Systems Contract III program, which supports Navy training systems, to more than 25 companies.

Now agencies are readying to release thousands of solicitations in the second quarter of fiscal 2012. While it’s possible to predict release dates relatively accurately using historical trends and current data, it will never be perfect, expects several major solicitations:

The Army is planning to release a solicitation for logistics related services under a $23 billion program called EAGLE.

The Air Force is readying a solicitation for training systems under the $20 billion Training Systems Acquisition III program.

Space and Naval Warfare Systems Command is planning a $16 billion acquisition of secure single-channel tactical software-defined handheld radio systems. Under existing contracts, this equipment has been provided by Harris and Thales.

The Navy is readying solicitations worth up to $10 billion for services related to implementing the Next Generation Enterprise Network. NGEN replaces the existing Navy network, NMCI, provided by HP Enterprise Services (formerly EDS).

The Army is planning a $5 billion solicitation for computer equipment and related services under the ITES 3H program, which is meant to be the primary vehicle the Army uses to buy IT equipment.

The Department of Homeland Security is set to release its $2 billion FirstSource 2 solicitation, which will replace First Source in providing the agency IT equipment, software and related services. First Source 2 will be set aside for small businesses.

Already this fiscal year, there have been several pieces of legislation and policy relevant to government contractors:

Most noteworthy was the passage of two appropriations bills, providing funding for federal agencies for the full 2012 fiscal year.

In November, President Obama released a memorandum pushing for making federal records management more cost effective and transparent and for moving from paper to electronic records.

That same month, Obama called on agencies to develop plans to reduce by 20 percent (from 2010 levels) their costs in areas like travel, mobile devices and printing.

In December, Obama issued a memorandum directing agencies to implement energy conservation measures with a payback of less than 10 years. Specifically, he challenged them to award at least $2 billion in performance-based contracts designed to implement energy efficiency measures in government buildings.