DHS Cancels $2.4 Billion Leidos Contract, Cites Changes at CISA
A $2.4 billion contract awarded last year to Leidos last year for a project to support CISA was canceled after the Department of Homeland Security said it was no longer needed in light of personnel, budgetary, and mission changes at the cybersecurity agency under the new presidential administration.
In a filing with the U.S. Court of Federal Claims this month, DHS stressed that the decision to cancel the seven-year contract was an internal decision rather than one made due to an ongoing legal challenge by Leidos competitor Nightwing, which also bid on the contract.
DHS, which oversees CISA, “determined that the agency’s requirements with respect to its IT and cybersecurity service needs have significantly changed in light of organizational changes and changes in priorities, unrelated to the protest, that have occurred since the ACTS solicitation was issued,” they wrote in the filing.
ACTS refers to the Agile Cybersecurity Technical Solutions project that was put into motion during the Biden Administration to support CISA in such areas as analysis, testing, integration, and deployment of security tools. The DHS officials wrote that the federal agency doesn’t intend to award another contract for ACTS, adding that it’s “conducting acquisition planning to determine the best means of fulfilling its future requirements.”
DHS alerted Leidos about the cancellation of the contract on May 8 and informed Nightwing about the decision the next day.
CISA Becomes a Target
CISA, which included among its cybersecurity duties calling out disinformation efforts by adversaries like China and Russia aimed at disrupting U.S. elections, has been a target of President Trump after the agency disputed his claims that the 2020 election, which he lost to Bide,n was rigged against him.
Since returning to office, the administration has reduced staffing and budget levels as part of an effort by Trump and Homeland Security Secretary Kristi Noem to “refocus” the agency’s mission and end what the president has called the “weaponization” of CISA and other agencies. At the RSA Conference last late month, Noem said that “CISA is not the Ministry of Truth. … It is the job of CISA to be a cybersecurity agency that works to protect this country.”
In a letter sent to Senator Susan Collins, R-Maine, chair of the Senate Appropriations Committee, alerting her to Trump’s proposed $491 million cut to CISA’s budget – a 17% reduction – Russell Vought, director of the Office of Management and Budget (OMB), wrote it eliminates “weaponization and waste,” adding that CISA programs and offices “were used as a hub in the Censorship Industrial Complex to violate the First Amendment, target Americans for protected speech, and target the President.”
Trump has also ex-CISA director Chris Krebs, including revoking his security clearances and threatening those given to employees of SentinelOne, where Krebs worked before resigning the wake of the president’s attacks.
Nightwing’s Court Challenge
The agency had a much broader mission under Biden and ACTS was seen as an important part of enabling the effort. It reportedly was the successor to another initiative called Domino, whose contract was awarded to Raytheon in 2017. Nightwing was the cybersecurity business for Raytheon before it was spun out as an independent company last year.
After Leidos was awarded the ACTS contract, Nightwing protested the contract award process and decision, first to the Government Accountability Office and then to the federal claims court. The company claimed that DHS had conducted a procurement process according to the law, and it would have won the contract.
Instead, the decision to award the contract to Leidos “was riddled with fatal errors that impacted every aspect of the evaluation,” Nightwing claimed in its 65-page complaint. “The result of these errors is that DHS’ best value decision is premised on illusions. … DHS’ award decision was arbitrary, capricious, and contrary to law and regulation.”
‘Protest is Now Moot’
DHS’s decision to cancel Leidos’ contract essentially shelves the Nightwing complaint. No one is getting an ACTS contract now.
“In light of the agency’s termination of the ACTS contract and its intent to engage in new acquisition planning, it is the Government’s position that this protest is now moot and we intend to file a motion to dismiss to that effect if the protest is not voluntarily dismissed,” the DHS officials wrote.
