DHS scraps $10B small business IT and software contract
The Department of Homeland Security is canceling a $10 billion IT and software contract, a move that comes amid the Trump administration’s push to route all deals through the General Services Administration.
In a posting Friday, DHS said the decision to scrap all existing IT value-added reseller deals under its FirstSource III contract aligns with recent executive orders and was made following “a thorough analysis of active contract awards and solicitations to assess mission-criticality and continued needs.”
The cancellation also includes solicitations and evaluations of proposals submitted via a second category for software, per the posting, and no additional awards will be made.
“The Department would like to express its sincere appreciation to the offerors who have participated in the FirstSource III program, along with our industry partners who have been involved in the FirstSource program throughout its history,” DHS wrote in the posting on Sam.gov.
The FirstSource III contract encompasses IT valued-added resellers and software, and includes 8(a) business, historically underutilized business zones; service-disabled veteran-owned small businesses; women-owned small businesses; and all small businesses.
Even before its cancellation, the contract faced numerous challenges, with offerors frequently issuing bid protests that required DHS to pause and restructure the contract several times. Though DHS initially issued awards to more than a dozen companies in different socioeconomic categories under the IT reseller function last September, the department put the contract on pause earlier this year to sort out continued protests and evaluate the future of the procurement in light of President Donald Trump’s executive orders.
Also Friday, DHS said its decision to terminate the evaluation of proposals submitted under its Program Management, Administrative, Clerical, and Technical Services III (PACTS III) departmentwide contract vehicle solicitation was also done following an analysis that determined the contract to be “non-mission critical” and would “provide redundant offerings available through existing” GSA solutions.
“The Department intends to leverage existing contract solutions such as GSA’s One Acquisition Solution for Integrated Services+ and the GSA Multiple Award Schedules to support its requirements for these services in the future,” the posting stated.
The cancellations follow a thematic shift in the Trump administration to centralize almost all government procurement under GSA, including commodity IT, rather than giving agencies the authority to execute their own procurements. Through its OneGov strategy, GSA said it will work to negotiate deals with IT vendors, rather than resellers, for the entirety of government.
