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.