EAGLE II is a strategic sourcing suite of contracts designed to fulfill the majority of DHS's needs for information technology services. For example, EAGLE II is intended to provide computer-based information systems and other forms of information technology to produce, manipulate, store, communicate, and/or disseminate information and enhance mission-critical functions. As one of DHS's strategic sourcing initiatives, EAGLE II is intended to increase the efficiency of the department's acquisition and mission support capabilities, as well as improve fulfillment of socioeconomic contracting goals. To promote the use of EAGLE II, DHS's strategic sourcing policy requires that its components use this contract vehicle when procuring information technology services. In fact, all DHS strategic sourcing contract vehicles, including EAGLE II, are mandatory for use unless the procurement meets a specific exception. DHS's efforts are in response to OMB's strategic sourcing memorandum that requires agencies to identify commodities that could be purchased through strategic sourcing, which helps optimize performance, minimize price, increase achievement of socioeconomic goals, and improve vendor access to business opportunities. EAGLE II is the successor to EAGLE, which DHS used to procure information technology services from 2006 through 2013. The period of performance for EAGLE II includes a 5-year base period, from 2013 through 2018, and one 2-year option period, from 2018 through 2020. EAGLE II contracts are structured as multiple-award Indefinite Delivery Indefinite Quantity (IDIQ) contracts.used when the government needs flexibility in the timing of orders within a specified period of time. Indefinite-quantity contracts provide for an indefinite quantity, within stated limits of supplies or services during a fixed period. Multiple-award refers to the fact that more than one prime contractor is awarded a contract. After award of a base IDIQ contract, products and services are procured through individual task orders during the contract period. DHS's CPO was responsible for awarding the EAGLE II IDIQ contracts, while DHS components, such as the United States Coast Guard or Transportation Security Administration, can issue task orders based on their needs. Indefinite delivery contracts can be A broad range of DHS IT service requirements are covered through EAGLE II's three lines of business, which DHS refers to as functional categories, such as software design, program support, and verification services. Within each line of business, DHS established at least two business tracks, or pathways that will distribute business opportunities, including tracks reserved for small businesses. These categories include small disadvantaged businesses such as those in the Small Business Administration's (SBA) 8(a) Business Development Program, Service- Disabled Veteran-Owned Small Business (SDVOSB) program and in the Historically Underutilized Business Zone (HUBZone) program.also has tracks in which both large and small businesses can compete (unrestricted track). See table 1. Congress has set an annual government-wide goal of awarding not less than 23 percent of prime contract dollars to small disadvantaged businesses and SBA negotiates specific goals with each agency to help ensure that the federal government collectively meets this statutory goal, including those for various socioeconomic categories of small businesses. DHS's small business goal for fiscal year 2015, as negotiated with SBA, is that 32 percent of its prime contract dollars will be awarded to small businesses department wide with no less than 5 percent to small disadvantaged businesses, including Section 8(a) small businesses; 5 percent to women-owned small businesses; 3 percent to SDVOSB small businesses; and three percent to small businesses in HUBZones. Within DHS, the Office of Small and Disadvantaged Business Utilization (OSDBU) assists with negotiating DHS's small business goals with SBA, participates in small business outreach events and hosts vendor outreach sessions. In addition, the OSDBU director makes recommendations to contracting officers as to whether particular contract requirements should be set aside for small businesses. DHS has not set a specific goal for the percent of EAGLE II contracts that should be awarded to small businesses. As explained by DHS CPO officials, however, the value of EAGLE II task orders issued to small businesses contributes to DHS's department wide small business goals. Federal regulations require agencies to perform acquisition planning activities, including market research, for all acquisitions to ensure that the government meets its needs in the most effective, economical, and timely manner possible. Development of the EAGLE II contract award was overseen by the DHS CPO. Within the DHS CPO, the Strategic Sourcing Program Office is responsible for the DHS Strategic Sourcing Program, including development and implementation of EAGLE II. In 2009, DHS CPO staff began acquisition planning for EAGLE II which included publishing a request for information from small businesses to gain insight into how best to structure EAGLE to provide opportunities for small business participation and publishing an additional request to gain similar perspectives from larger businesses. In addition, DHS's CPO sponsored a lessons-learned assessment of EAGLE by obtaining feedback from DHS contracting staff and EAGLE contractors on a range of topics including the procurement process for task orders, small business participation, as well as communications between prospective contractors and DHS staff. DHS made its initial EAGLE II source selection decisions in 2012 and 2013, but its final round of source selections was not finalized until 2014 because of a series of bid protests filed by businesses, large and small, objecting to the selection decisions.award or proposed award of a contract for procurement of goods and services or a challenge to the terms of a solicitation for a contract. Contractors filed a total of 56 protests with GAO regarding the EAGLE II procurement, which were ultimately dismissed, withdrawn, or denied. GAO dismissed most of the protests because DHS took corrective action by reevaluating its source selection decisions for the affected business A bid protest is a challenge to the tracks. As a result, DHS's final source selections were delayed. See figure 1 for EAGLE II's acquisition timeline and see appendix II for more information on the bid protests. In our past work, we have assessed how strategic sourcing initiatives affect small businesses, including small disadvantaged businesses. In January 2014, we found that OMB, the General Services Administration (GSA), and selected agencies, including DHS, had taken steps to consider small businesses, including small disadvantaged businesses, in their strategic sourcing efforts. However, data and performance measures that would provide a more precise understanding of the level of inclusion were limited. We recommended the agencies, including DHS, collect baseline data and establish performance measures on the inclusion of small businesses in strategic sourcing initiatives. DHS concurred with the recommendation and has implemented it. According to DHS CPO and OSDBU officials, three key steps enhanced EAGLE II small business opportunities. Specifically, DHS established (1) specific competition tracks for small businesses, including those with specific socioeconomic characteristics, (2) mechanisms to maintain a steady pool of eligible small businesses, and (3) opportunities for small businesses to participate as core team members. As of March 31, 2015, DHS had issued almost all EAGLE II task orders to small businesses, but it is too soon to determine the full extent to which DHS's key steps have enhanced small business participation as only about 3 percent of anticipated EAGLE II spending has occurred. A key outcome of the acquisition planning process and lessons-learned was DHS's decision to combine three of EAGLE's five functional categories into a single functional category (termed functional category 1) that incorporates a larger range of information technology services, such as software design and development. Users of EAGLE had experienced difficulty in determining which functional area related to their requirements because of overlapping categories. DHS CPO officials estimated that about 80 percent of EAGLE II spending would go through this new category. DHS then established tracks to set aside competition for task orders for small businesses within each functional category, including those with specific socioeconomic characteristics. Specifically, DHS created three individual socioeconomic tracks within functional category 1 for qualifying 8(a), HUBZone, and SDVOSB small businesses and a general small business track. An OSDBU official told us that the creation of socioeconomic business tracks was the single most important step that DHS took to enhance small business participation. Small businesses can compete for task orders within the small business tracks or compete against larger businesses within the unrestricted business track. As part of its lessons-learned from EAGLE, CPO officials concluded that small businesses were able to successfully compete with large businesses. Table 2 depicts the number of EAGLE II IDIQ awards by functional category (line of business) and business track. Each of these contractors has the potential to compete for task orders placed by DHS contracting staff for specific requirements. To further enhance small business opportunities, DHS also established procedures in the EAGLE II ordering guide--used by component contracting staff to issue task orders under the contracts--to facilitate the use of small business set-aside opportunities. For example, after the contracting officer determines into which functional category a requirement falls, the contracting officer and the component's small business specialist are required to determine if the competition should be set aside for small businesses. In the case of functional category 1, this determination expands to whether the procurement should be set aside for competition within one or all of the small business socioeconomic tracks. In addition, a DHS small business specialist told us that the DHS Office of Procurement Operations sponsored meetings between awardees within each of EAGLE II's small business tracks and DHS program managers to promote use of the small business tracks. According to DHS CPO and OSDBU officials, a second key step in enhancing small business participation was creating an "on ramp/off ramp" mechanism as a means of maintaining an eligible pool of small businesses throughout EAGLE II's performance period. DHS CPO officials explained that, during the course of EAGLE, 9 of 28 small business IDIQ awardees had been acquired by larger firms and consequently lost their small business status, effectively shrinking the pool of small businesses to compete over the contract period. EAGLE did not have a mechanism to replace these vendors with other small businesses. To avoid a similar situation on EAGLE II, DHS developed a mechanism referred to as an "off ramp," which according to DHS requires businesses that have outgrown or otherwise lost their small business status to leave the EAGLE II program after completing any ongoing task orders. In contrast, according to DHS CPO officials, under EAGLE, these businesses were permitted to compete for orders in the unrestricted track. In addition, DHS created a new mechanism known as an "on ramp," which according to DHS, permits DHS to replenish the pool of small businesses by reopening the EAGLE II solicitation to award additional IDIQ contracts to small businesses. DHS CPO officials reported they have not yet needed to use the on ramp/off ramp mechanisms to maintain an eligible pool of small businesses because there has been no reduction in the number of small businesses as of March 31, 2015. A third key step that DHS CPO and OSDBU officials considered significant to enhancing EAGLE II small business opportunities was specifically permitting all prime contractors to formally team with subcontractors, referred to as core team members, to compete for contract awards. As part of the EAGLE II solicitation process, DHS permitted prime contractors to designate up to four core team members in their proposals to more fully meet the broad array of information technology service requirements. DHS also instructed that businesses competing for IDIQs in the small business tracks may team only with other small businesses. CPO officials also noted that the use of teaming on EAGLE II allowed prime contractors to designate team members for the purpose of strengthening their offers. For example, the solicitation allowed prospective contractors to provide information on the core team members--such as past performance--that DHS would evaluate and consider as part of the award decisions. According to DHS OSDBU officials, teaming was a way to allow small businesses that did not receive an EAGLE II award to still participate at the task order level in meeting DHS information technology services requirements, as a team member. Further, DHS CPO officials said that the success of teaming arrangements in performing task orders was a lesson-learned from EAGLE, in which teaming arrangements with subcontractors were encouraged, but only after award of the IDIQ contracts. Our analysis of DHS CPO teaming data indicates that 127 of the 150 IDIQ contracts included teaming arrangements. Almost all of the small business prime contractors--60 of 64--used teaming, as did many of the 86 large businesses in the unrestricted business tracks. According to officials, DHS requires the original core team to remain together for the life of the contract including the base and option periods except for extraordinary circumstances and with the DHS contracting officer's consent. As of March 31, 2015, DHS issued 74 EAGLE II task orders with a total estimated value of $591 million, almost all of which--about 94 percent-- was issued to small businesses. Over half of the total amount went to HUBZone businesses. However, this amount represents only about three percent of EAGLE II's potential value of $22 billion. Figure 2 depicts the total value of EAGLE II task orders issued by functional category and business track from fiscal year 2013 through March 31, 2015 and the percentage of task orders issued by business track. DHS CPO officials stated the high percentage of task orders issued within functional category 1 is an early indication that the steps they took to enhance small business utilization are working as intended. However they also noted that the trend of awards to small businesses was unlikely to continue at the same levels over the life of the contract. They explained that delays in awarding some of the contracts within the unrestricted portion of functional category 1 may have contributed in particular to the high level of HUBZone task orders. DHS did not make its final source selection decisions for IDIQ awards within functional category 1's unrestricted business track until April 2014 due to a series of bid protests. In the meantime, according to DHS CPO officials, DHS contracting officers made greater use of functional category 1's small business tracks, especially the HUBZone track which was available as early as July 2013. DHS CPO officials reported that they anticipate an uptick in EAGLE II task orders later in fiscal year 2015 and that with the availability of functional category 1's unrestricted track, they expect large businesses to win a higher amount of task orders going forward. At the same time, however, the officials expect the overall percentage of task orders issued to small businesses to be higher for EAGLE II than for EAGLE. DHS officials reported that about 10 percent of EAGLE's obligations were issued to small businesses over the 7 years of that contract vehicle. DHS set five goals and objectives for EAGLE II and set performance measures for most of the goals, as shown in Table 3. DHS has not fully set performance measures for two of DHS's stated goals for EAGLE II: fulfillment of socioeconomic goals and enhancing DHS mission performance capabilities. According to DHS strategic sourcing guidance, staff are to collect and review performance data to ensure program objectives are met. Further, federal internal control standards state that the ability to compare actual performance to planned or expected results can help managers identify and analyze significant differences in expected outcomes. However, as reflected in table 3, DHS does not have performance measures or collect information that would allow them to assess the extent to which: (1) use of core team members may be furthering EAGLE II's socioeconomic goals and (2) the activities of teaming coordinators may have furthered DHS's goal of enhancing its mission capabilities by finding subcontractors with new and innovative services. DHS CPO officials explained that they considered inclusion of core team members and teaming coordinators in the EAGLE II solicitation to be sufficient to meet goals. At the same time, however, they recognized that tracking team member use at the task order level would be difficult. For example, the officials noted that almost five years have passed since the time of the original EAGLE II offers in 2011, and that the contractors may now not have the same relationships with their core team members. In terms of teaming coordinators, DHS CPO officials told us they have received informal feedback that teaming coordinators are helpful in locating subcontractors with innovative technologies. However, as indicated by the market research during acquisition planning for the unrestricted business track, vendors reported mixed views to DHS as to whether companies should be required to have teaming coordinators, for example, questioning the additional costs. Without establishing performance measures to gauge progress, and collecting needed information, DHS will not be able to fully assess if its goals for EAGLE II are being met. We also identified a potential barrier to DHS's ability to measure the full extent of small business participation. DHS does not consistently record the use of set asides within FPDS-NG, which may limit DHS's ability to accurately track results. Within FPDS-NG, the government's procurement database, the "type of set-aside" field is a key data element that contracting staff are supposed to check to indicate a small business set- aside award. In our assessment of contract documentation, we found that contracting staff did not correctly record the use of set-asides for seven of the eight task orders awarded to small businesses in our sample. Without correct FPDS-NG data, DHS and others will not be able to correctly assess the extent to which DHS has used its small business tracks to set aside task orders for small business competition. Based on the results of our assessment, data in the FPDS-NG understates the extent to which DHS staff have set aside task orders to promote small business participation. During the course of our review, DHS CPO officials corrected the errors in the seven contracts we identified after we brought this issue to their attention. The officials agreed to take additional steps to correct this problem going forward by creating an automated process to check for coding errors. CPO officials are also planning to issue additional guidance. In addition, one DHS component reported that it was providing additional training to contracting officers, including step-by-step instructions on how to report set asides, to avoid future reporting errors. DHS took a number of actions aimed at enhancing small businesses participation in EAGLE II and a large proportion of the dollars obligated so far have gone to small businesses. However, only a fraction of the anticipated $22 billion in spending has occurred to date, so it is too soon to fully assess the effectiveness of steps taken. In this early stage, DHS has an opportunity to improve how it measures performance against its stated goals. Specifically, the department has established the use of core team members as a key element in enhancing opportunities for small businesses that did not receive prime contracts and teaming coordinators to improve DHS mission performance, but does not collect information on the extent of use of these entities. Without this information, it will be difficult for DHS to assess their contributions towards its EAGLE II goals such as promoting small business participation. Further, given the mixed reviews from vendors as to the benefits of teaming coordinators, DHS could better position itself to ensure that new and innovative contractors support DHS over the life of the EAGLE II contracts. Evaluating the usefulness of these activities could also be beneficial to future DHS strategic sourcing vehicles seeking to employ teaming approaches. To support effective implementation of EAGLE II goals for enhancing small business participation and access to innovative technology, we recommend that the Secretary of Homeland Security direct the Office of the Chief Procurement Officer to take the following two actions: Collect and review information on the use of small business core team members to determine whether their use is helping to increase small business participation. Collect and review information to assess how teaming coordinators have provided DHS with greater access to innovative technology. We provided a draft of this product to the Secretary of Homeland Security for comment. In its written comments, reproduced in appendix III, DHS acknowledged our recognition of the key steps it has taken to increase small business participation but did not concur with our two recommendations. Regarding our recommendation that DHS collect and review information on the use of small business core team members to determine whether their use is helping to increase small business participation, DHS stated that the actions it took during the solicitation phase as well as the ordering procedures and safeguards included in the awarded contracts have already achieved this goal and addressed this recommendation. While these actions are important, monitoring contractor use of their core team members post-award is also significant. As DHS notes in its letter, use of small business core team members was intended to maximize opportunities for companies that may not have individually been competitive. Our report shows that this approach was largely successful in the solicitation phase since almost all small businesses that were awarded EAGLE II contracts took advantage of this opportunity and had at least one small business core team member. However, being a small business core team member does not guarantee that the company will actually be used to conduct work. As a result, the impact of these efforts will be unknown if DHS does not gather information to monitor whether small business core team members are actually used to conduct work at the task order level. For example, as noted in the report, of ten task orders we reviewed, only 2 prime contractors used a core team member to conduct work. Further, such information would also prove helpful to DHS when planning for EAGLE II's successor, just as EAGLE II benefited from the lessons-learned from EAGLE contractors. Given that the base period of performance for EAGLE II ends in 2018, DHS is likely to begin its acquisition planning for EAGLE II's successor in just a few years. Regarding our recommendation that DHS collect and review information to assess how teaming coordinators have provided DHS with greater access to innovative technology, DHS explained that it did not concur because it has no valid means to evaluate a teaming coordinator's individual efforts in bringing innovative products and services to EAGLE II task orders. Nevertheless, DHS reported its plans to survey the DHS Chief Information Officer community, as the principal user of the EAGLE II contracts, to indicate whether they are seeing new and innovative solutions and services in the proposals received. While this outcome may not link directly to contractor teaming coordinator activities, it could provide DHS with useful insights. To the extent that the survey obtains information on how contractor proposals have contributed to enhancing DHS's access to new and innovative solutions and also seeks information on factors that may contribute to the results, it has the potential to satisfy our recommendation. Again, this information would prove useful as DHS plans for the EAGLE II successor contracts, especially since the contracting community reported mixed reviews about teaming coordinators. DHS also provided technical comments that we incorporated into the report as appropriate. We are sending copies to the Secretary of Homeland Security, appropriate congressional committees, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions concerning this report, please contact me at (202) 512-4841 or by e-mail at mackinm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IV. Enterprise Acquisition Gateway for Leading-Edge Solutions II (EAGLE II) is a suite of strategic sourcing contracts, which serves as the Department of Homeland Security's (DHS) preferred source for procuring information technology services. Our objectives were to assess (1) the key steps DHS has taken to enhance small business participation and (2) EAGLE II's goals and performance measures and progress made to date. To identify and describe the key steps DHS took to enhance small business participation on EAGLE II prior to awarding the Indefinite Delivery Indefinite Quantity (IDIQ) contracts, we reviewed DHS acquisition planning documentation. This documentation, including the EAGLE II acquisition plan, the market research report, and summary of lessons-learned, contains the bases for decisions made by DHS's Office of the Chief Procurement Officer (CPO) before proceeding with the EAGLE II solicitation. These decisions included deciding whether to use EAGLE II rather than other contract vehicles to procure information technology services, how to structure EAGLE II to increase small business participation, and how to facilitate the use of teaming arrangements. We also reviewed the DHS EAGLE II solicitation and Ordering Guide to document the final decisions DHS made for implementing EAGLE II, including how to structure the business tracks and how ordering procedures should be used to facilitate setting aside task orders for competition within the small business tracks. To better understand DHS's decision making during acquisition planning, we interviewed staff from the DHS CPO about the planning process and the steps they considered as key to enhancing small business participation. We also interviewed the Director of the DHS Office of Small and Disadvantaged Business Utilization Office (OSDBU), and a small business specialist from DHS's Office of Procurement Operations, to obtain their perspectives on which steps were key to enhancing small business participation. To obtain an additional small business perspective, we reviewed correspondence submitted by a small business advocacy group and interviewed its representative. In addition, to understand how a series of bid protests delayed finalization of EAGLE II IDIQ awards, we analyzed DHS bid protest data to identify the dates on which the protests were filed and resolved. We also analyzed EAGLE II source selection decisions to identify the dates on which DHS finalized its selection decisions for each EAGLE II business track. To determine the number and estimated value of EAGLE II task order awards as well as the business size of the recipients, we analyzed Federal Procurement Data System-Next Generation (FPDS-NG) data for fiscal years 2013, 2014, and the first two quarters of fiscal year 2015. We assessed the reliability of the FPDS-NG data by (1) performing electronic testing of the required data fields, (2) reviewing data documentation and validation rules, and (3) comparing data for selected data fields, including the award date, total dollar value, and type of set-aside, to contract documentation for 10 EAGLE II task orders. We selected a non- probability sample of task orders, selecting contracts that provided us the opportunity to determine whether DHS staff from a variety of components had correctly recorded if a small business set aside had been used for the procurement. Our task order selection was made using November 2014 FPDS-NG data, at which time DHS had awarded 54 task orders. We concluded that while the FPDS-NG data was reliable for the purposes of assessing the number and estimated value of task orders as well as the business size of the recipient, it was not reliable for the purpose of determining whether DHS had set aside the task order award for small business competition due to the errors we identified and discussed in our report. As a result, our analysis reflects the estimated values of awards made to EAGLE II prime contractors based on the specific functional category business track for which they won their IDIQ award. DHS CPO officials corrected the errors in the 7 contracts we identified, and agreed to take additional steps to correct this problem, as discussed in this report. To determine the number of prime contractors that used core team members when making offers for the IDIQ awards, we analyzed information DHS had compiled for each IDIQ award. We assessed the accuracy of this information by identifying whether both DHS's information and the listing of core team members on the Federal Business Opportunities website listed one or more team members for 12 of the 150 IDIQ awardees. We selected 4 contracts from Functional Category 1's unrestricted business track, and 1 from each of the other eight business tracks, for a total of 12 contracts. We determined that the DHS information on core team members was reliable for the purposes of this report. In addition, to identify if prime contractors used one or more of their core team members on the 10 task orders, we then reviewed DHS information indicating whether the prime contractors had used one or more of their core team members in performing work under a task order. To identify EAGLE II's goals and performance measures and progress made to date, we assessed the January 2011 EAGLE II Solutions Business Case to identify EAGLE II goals and performance measures that DHS specified during acquisition planning. We interviewed DHS CPO officials to obtain their perspectives on the goals, related activities, and performance measures and to refine our understanding of what they intended EAGLE II to accomplish. To assess the progress EAGLE II has made towards meeting each goal, we undertook a range of activities. First, to identify DHS progress in meeting its socioeconomic goals, we analyzed FPDS-NG data to assess the value of contracts awarded to small businesses as of March 31, 2015, the most recent quarter of FPDS- NG data. Second, to identify how DHS measures cost savings, including fees avoided by using EAGLE II rather than other strategic sourcing vehicles and enhancements to EAGLE II's acquisition efficiencies, we obtained and reviewed the strategic sourcing saving methodology sponsored by the DHS Strategic Sourcing Program Office, and obtained saving estimates from this office. Third, to verify DHS's assertion that it had increased the efficiency of the acquisition process by consolidating ordering information for its staff on the EAGLE II intranet, DHS provided us with access and we directly examined the contents of the EAGLE II intranet. We then reviewed federal internal control standards and assessed whether DHS had established performance measures for program goals consistent with these standards. We obtained information from DHS on its progress in meeting those goals as of March 2015. GAO is also conducting additional work about the benefits of strategic sourcing for information technology services, including opportunities that may exist to leverage the government's buying power and barriers to the use of strategic sourcing. This review, expected to be completed in 2015, also involves EAGLE and EAGLE II in addition to other government agency contract vehicles. We conducted this performance audit from November 2014 to June 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The Department of Homeland Security (DHS) made its initial EAGLE II source selection decisions in 2012 and 2013, but its final round of source selections was not finalized until 2014 because of a series of bid protests filed by businesses, for the unrestricted and small business tracks, objecting to the selection decisions. A bid protest is a challenge to the award or proposed award of a contract for procurement of goods and services or a challenge to the terms of a solicitation for a contract. A total of 46 large and small businesses filed a total of 56 bid protests with GAO. These protests took place from August 2012 through July 2014 and were all resolved by late 2014. The number of bid protests varied by functional category and by business track, with the highest number of protests (21) filed by large businesses in functional category 1's unrestricted business track. Most of the bid protests (44 of the 56 bid protests filed) were dismissed. GAO sustained none of the cases. According to DHS officials, the agency took corrective action for the dismissed cases by reevaluating its source selection decisions. Table 4 depicts the number of bid protests businesses filed within each of EAGLE II's business tracks and the outcomes of each. In addition to the contact named above, W. William Russell, Assistant Director; Peter Anderson, Sonja Bensen, Virginia Chanley, Wendell K. Hudson, Julia Kennon, and Roxanna Sun made key contributions to this report.

Summary:
DHS's EAGLE II is a suite of strategic sourcing contracts, valued at $22 billion, which serves as DHS's mandatory source for information technology services. Strategic sourcing is a process that moves an organization away from numerous individual procurements toward a broader aggregate approach to achieve cost savings and other efficiencies. The small business community has raised questions about strategic sourcing reducing contracting opportunities. GAO was asked to examine the EAGLE II program. This report assesses (1) key steps DHS has taken to enhance small business participation and (2) EAGLE II goals, performance measures, and progress made to date. GAO reviewed EAGLE II acquisition planning documents and interviewed DHS procurement and small business staff. GAO analyzed federal procurement data from fiscal year 2013 through the second quarter of fiscal year 2015 and assessed reliability by comparing data to a nonprobability sample of 10 EAGLE II contracts selected from a variety of DHS components. Department of Homeland Security (DHS) procurement officials reported taking three key steps to enhance small business participation in the Enterprise Acquisition Gateway for Leading-Edge Solutions II (EAGLE II) contracts: Creating small business tracks within each of EAGLE II's three lines of business, including socioeconomic set-aside tracks, to exclusively target competitions to small businesses in the first line of business. See table. Establishing a process to maintain a steady pool of eligible small businesses by reopening the EAGLE II solicitation after requiring businesses that outgrow their small size status to leave the program. Requiring small business track prime contractors to team only with other small businesses. As of March 2015, DHS had issued 74 EAGLE II task orders worth an estimated $591 million, almost all of which--94 percent--went to small businesses. However, it is too soon to evaluate the full impact of these steps because only about 3 percent of the anticipated $22 billion in task orders have been issued. DHS established five goals for EAGLE II and developed performance measures to assess progress in meeting most of them. DHS established performance measures for the three EAGLE II goals related to cost savings and efficiencies through a methodology to assess cost savings, but has not fully set performance measures for the remaining two, relating to (1) the small business socioeconomic goal and (2) enhancing DHS mission capabilities. For its socioeconomic goal, DHS assesses progress via the percentage of the value of orders issued to small businesses. However, DHS does not assess whether use of team members (other small businesses) supports this goal, although DHS procurement officials told us teaming is key to enhancing small business participation. Further, DHS has not set a performance measure for assessing how the use of teaming coordinators contributes to the EAGLE II goal of enhancing DHS's mission capabilities. According to DHS, prime contractors are required to have teaming coordinators identify subcontractors with innovative services. Federal internal control standards highlight the importance of developing measures to compare expected outcomes to actual results. Without such measures, it will be difficult for DHS to have needed information to assess the extent to which the use of team members and teaming coordinators contribute toward their respective EAGLE II goals. GAO recommends the Secretary of Homeland Security support implementation of EAGLE II goals by assessing the use of team members and teaming coordinators. DHS did not concur with GAO recommendations, citing actions already taken in soliciting and awarding the contracts. GAO believes there is still value in assessing whether team members are used for task orders, and that DHS's plan to survey EAGLE II users has merit.