A $23 billion federal contract that encompasses a wide array of technology services and involves at least four locally based companies may be up for expansion and rebid ahead of schedule.
The Army’s CR2 Program is essentially a network aimed at streamlining the procurement process for the Army and other federal agencies buying technology services. The program is close to reaching the ceiling on its original $23.2 billion budget, according to a report released this week from INPUT, a Reston-based research firm that tracks federal contracting. In order to make sure the Army doesn’t reach the funding limit for the program — and then have to halt it unexpectedly — it will likely seek additional funds and open the contract up again this year, four years ahead of its original 2011 date.
There are currently eight prime contractors on the project, including Bethesda-based Lockheed Martin, SRA International in Fairfax, VSE Corporation in Alexandria and ARINC in Annapolis. Officials from SRA and VSE declined to comment on the possibility of a recompete. A spokesman for Lockheed Martin deferred comment to the Army.
Reopening the multibillion-dollar contract could pump billions of dollars into the region, with multiple subcontractors in line to work on the project. The federal government spends billions of contracting dollars in the region — more than $112 billion in 2005 — and large contracts typically include multiple locally based subcontractors.
The program is rapidly approaching its funding ceiling because multiple agencies are using it, said John Slye, a senior analyst with INPUT. Each time an agency procures something through the program it chips away at the budget.
“It’s possible they underestimated the cost,” Slye said. “We expect the contracts to top out [within the next two years] … you have to be able to put another award in place” before that happens.
The report also indicated that while many of the prime contractors may bid again, they might use different subcontractors this time around — meaning more local companies will have a chance to get a share of the award.
“There may be opportunities for vendors to initiate relationships that weren’t there before,” Slye said.
