The Information Technology Enterprise Solutions – 3 Services (ITES-3S) contract vehicle is a mandatory $12.1 billion multiple award IDIQ contract vehicle awarded by the Army Computer Hardware Enterprise Software and Solutions (CHESS) office within Program Executive Office (PEO) Enterprise Information Systems (EIS) in coordination with the Army Contracting Command – Rock Island (ACC-RI). Awarded in September 2018, performance on ITES-3S will run through September 24, 2027, but note that ITES-4S comments have been solicited already and we expect this process to continue.
Before you get too far in your planning for ITES-4S, be sure to use this blog series and other resources to understand what has happened on ITES-3S. Past is not prologue, but failing to study history is just silly. Learn what demand and competitive environment exists today so you can supplement your understanding of Army IT (and other) spending. Check out our series on ITES-3S as a go to reference guide.
ITES-3S includes a full range of services and solutions necessary for the Army to satisfy its support of Army Enterprise infrastructure goals with IT services throughout CONUS and OCONUS locations, including warzone areas. The scope includes cybersecurity, IT services, business process reengineering, enterprise design, integration, consolidation, network/systems operations and maintenance, telecommunications, IT supply chain management, and IT education and training.
In February 2022, ITES-3S added new labor categories to reflect higher end work, including AI/ML, data services, cloud services, cybersecurity and applications development. ITES-4S is exploring two sets of suites to include both high-end and low-end IT services.
Top ITES-3S Competitors
Figure 1 – The top 10 competitors on the ITES-3S contract vehicle by base and exercised options. Source: USASpending.gov
When looking at the top winners, the top 10 represent a 60/40 split of large versus small businesses. SAIC is the top performer on the ITES-3S vehicle, having received $378 million in base and exercised options across 15 task orders. SAIC’s work includes data and applications support, cybersecurity, network operations and maintenance, IT design, integration and consolidation, and service desk support. SAIC supports several Army customers through these task orders, including U.S. Army Human Resources Command (HRC), U.S. Army Communications Information Systems Activity-Pacific (USACISA-P), and U.S. Army Aviation and Missile Command (AMCOM).
SAIC is followed by IBM, who has earned $242 million in base and exercised options across 11 task orders. This comes from IBM’s support of the Logistics Data Analysis Center (LDAC), which IBM has held for three iterations, IT services for the Army’s Acquisition, Logistics and Technology Enterprise Systems and Services (ALTESS) shared services center, and the Army Learning Management System, among other tasks.
Agile Defense is the largest small business winner and third largest awardee overall, receiving $207 million over 19 task orders, including IT services support for Aberdeen Proving Ground (APG), PEO Missiles and Space (MS), and PEO Aviation.
Other significant winners include Peraton, currently providing combined IT support services to U.S. Forces Korea’s (USFK) J6 Directorate; Business Mission Edge, a Woman-Owned Small Business (WOSB) through IT engineering and installation support services in the Southwest Asia Theater; and V2X’s (legacy Vectrus) support for the Army Regional Cyber Center.
These awardees are followed by GDIT, primarily through its Network Enterprise Technology Command (NETCOM) task order; PingWind via its acquisition legacy Exeter IT Services through the IT support services task order for Army Headquarters; Deloitte, mostly through the Civilian Human Resources Cloud Information Technology Support Services (CHRCITSS) task; and Connected Logistics (LOGC2) through its Radio Frequency-Intransit Visibility (RF-ITV) system operations and maintenance task.
Top ITES-3S Users
Figure 2 – Top 10 ITES-3S users by spending. Source: USASpending.gov
When analyzing top users of ITES-3S, we can see a reasonably varied array of Army customers who use this contract vehicle. While there are non-Army users, their volume is small by comparison. Topping the list of ITES-3S users is, unsurprisingly, PEO EIS, which oversees CHESS and is responsible for managing and providing business systems and data analytics across the Army. This is followed by HRC, which has procured cloud services and data and application support for human resources capabilities and talent management systems.
This is followed by Army Cyber Command (ARCYBER), which conducts information dominance and cyberspace operations and has procured services supporting the Regional Cyber Center. Next is U.S. Army Central (ARCENT), which operates in the Middle East and Central and South Asia, which is procuring cybersecurity training, as well as IT engineering and installation support.
Other customers, including AMCOM, Army Research Laboratory (CCDC), 8th U.S. Army, and Army HQ, have gained their significant presence through a single, high-value contract.
Small Business Award Trends
ITES-3S awarded 135 contracts consisting of 85 small businesses and 50 large businesses. Of all task order awards, just over a quarter of them are competed as set-aside contracts, with almost all set-asides simply as a small business set-aside. A very small percentage are competed as Woman-Owned Small Business (WOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB) set-asides.
Despite minimal set-aside value, small businesses are still winning their fair share of task orders. By task order value, ITES-3S has nearly a 60/40 split of large business versus small business awardees. On average, a large business task order is valued at $13.1 million, compared to an average $5.1 million value of a small business task order. Further, large businesses average 3.9 task orders wins compared to small businesses averaging 4.5 task order wins.
The FedSavvy Strategies Takeaway
- ITES-3S encompasses a wide range of IT services to support Army enterprise infrastructure, and an introduction of new labor categories such as AI/ML, data services and cloud services reflect the Army’s interest in procuring emerging technologies.
- Top performers on ITES-3S include SAIC, IBM and Agile Defense, who are each providing a range of IT services to multiple Army customers.
- ITES-3S is used by a wide variety of Army departments and commands, including PEO EIS, HRC, ARCYBER and ARCENT, indicating a broad utilization across different users.
- ITES-3S is awarding contracts to both small and large businesses, with approximately 55/45 split in task order value favoring large businesses.
- Despite winning fewer task orders overall, small businesses tend to hold a higher number of task orders that are, on average, lower value than those held by large businesses.
Stay tuned for a continuation of this series focused on ITES-3S. The next blog explores task orders of great significance across ITES-3S so you can plan your use of this vehicle as it transitions to ITES-4S.
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