See table 1. 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. 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. 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. EAGLE did  not have a mechanism to replace these vendors with other small  businesses. 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. 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. DHS Has Issued Most Task Orders to Small Businesses, but It Is Too Soon to Evaluate the Full Effect of the Key Steps

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. However, this amount represents only about  three percent of EAGLE II’s potential value of $22 billion. DHS Established Performance Goals, but Has Not Fully Assessed Progress for Some Goals

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. 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. 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. Without this information, it will be  difficult for DHS to assess their contributions towards its EAGLE II goals  such as promoting small business participation. Recommendations for Executive Action

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. Appendix I: Objectives, Scope and Methodology

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. We then reviewed federal internal control standards and  assessed whether DHS had established performance measures for  program goals consistent with these standards.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.