The National Institutes of Health’s decision late last month to cancel the CIO-SP4 governmentwide acquisition contract surprised almost no one.
Protests of the IT services contract tied up the procurement in the courts or with the Government Accountability Office for the better part of four years, forcing the NIH IT Acquisition and Assessment Center (NITAAC) to extend the current CIO-SP3 contract six times.
While many in industry believed the constant stream of protests doomed the GWAC, Ricky Clark, the director of NITAAC, said the decision to pull the plug on CIO-SP4 was based on the administration’s goal to reduce contract duplication.
“Following a thorough strategic review aligned with Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, and OMB Memorandum M-25-31, acquisition leadership at the Department of Health and Human Services and the National Institutes of Health determined that the requirements envisioned under CIO-SP4 are now sufficiently addressed through existing governmentwide solutions, including those offered by General Services Administration. As a result, CIO-SP4 was determined to be duplicative and no longer mission-critical,” Clark said in an email to Federal News Network. “As the federal acquisition environment continues to evolve, the decision to cancel CIO-SP4 represents a responsible recalibration — focused on reducing duplication, improving efficiency, and ensuring disciplined stewardship of taxpayer dollars. We look forward to continuing discussions with our partners and stakeholders as we further outline the analysis supporting this decision and move forward with the transition of CIO-SP3 to the GSA portfolio.”
GSA and NITAAC have been negotiating for much of the last nine months about the future of its GWACs. Similarly, GSA has been working with NASA as well to transfer its SEWP VI GWAC after it has been awarded.
Jeff Koses, GSA’s senior procurement executive, said during an event at the Centers for Strategic and International Studies on Tuesday that these efforts are part of the goal reduce the number of multiple award, indefinite delivery, indefinite quantity (IDIQ) contracts across the federal government.
“We need competition and a variety of solutions for buying IT products and services, but we don’t need every agency to have a duplicative vehicle for that,” he said. “GSA has to build contracts that other agencies can use to fulfill their needs.”
More details are expected to come in the next few weeks about NITAAC’s move of CIO-SP3 to GSA, including another extension of the GWAC.
Trey Hodgkins, president of Hodgkins Consulting, said he believes the extension will be more of a transitional period for GSA to take over the management of the program.
“NITAAC has struggled to have people in the office and take orders from customers. A practical effect of this to ween people off using that contract as customers went elsewhere to find what they needed,” Hodgkins said. “I think all GWACs other than those already at GSA will have to go through some examination and see if they need to be consolidated.”
NITAAC lost about 35% of its staff to the deferred resignation program, early retirements and layoffs.
Over the last year, agencies have moved away from using CIO-SP3 to a certain extent.
Data from Leadership Connect shows agencies spent $1.3 billion in fiscal 2025, which is down from $1.8 billion in 2024 and $1.7 billion in 2023.
The Departments of Health and Human Services and Defense are the biggest users of the contract, according Leadership Connect.
With the popularity of CIO-SP3, NITAAC figured the next generation contract would be well received by its federal customers and industry.
And it was, as more than 1,000 vendors submitted bids for the contract.
A death by a thousand cuts
Robert Turner, the president of rTurner Consulting, which helps contractors bid on large IDIQ type contracts, said CIO-SP4 was poorly managed from an acquisition perspective.
“Technical proposals are simply too subjective to evaluate in quantity and if the agency doesn’t award to all qualified bidders, inevitably the evaluations end at GAO or the Court of Federal Claims in protest, which just delays everything and in this case of CIO-SP4 ended up killing the contract vehicle,” he said.
Hodgkins called the lead up to the decision to terminate CIO-SP4 “a death by a thousand cuts.”
“It started in a place that was unawardable because of the construct they created and challenges for vendors who wanted to be there. They went through multiple iterations of changes to try to address that and with each change, new challenges were created,” he said. “I don’t think NITAAC ever got to a position where it was awardable and pass muster with vendors and the courts.”
Clark disputed that the protests and evaluation issues were the main reason for NITAAC’s decision.
“Throughout the process, the agency remained confident in the integrity of its acquisition approach and was prepared to defend its position, as needed, in the Court of Federal Claims,” he said. “We are grateful for the time, effort, and high-quality proposals submitted by many dedicated offerors. Our decision to continue the procurement did reflect a commitment to continuity of IT services and respect for the significant resources industry invested in the process.”
Turner said going forward GSA or other agencies running large multiple award IDIQ contracts must change their approach so as not to fall into the same trap as CIO-SP4.
“What I think we are all looking forward to is the day when large multi-agency multi-award vehicles focus on past performance and are targeted at awards for all qualified bidders, just like we saw or seeing with OASIS+ and partly what we saw with NASA SEWP 6,” he said.
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