In a major shift in federal procurement strategy, the Department of Homeland Security (DHS) has canceled two widely anticipated contract vehicles — the Program Management, Administrative, Clerical, and Technical Services III (PACTS III) and the FirstSource III. These cancellations reflect a growing trend among federal agencies to consolidate acquisitions and rely more heavily on governmentwide contract vehicles such as those managed by the General Services Administration (GSA).
DHS formally announced on SAM.gov that it would terminate both contract vehicles “for convenience.” Specifically, it halted all awards under the $10 billion FirstSource III IT Value Added Reseller (ITVAR) category and canceled plans to make awards under its software category. The decision came after a departmental review of contract awards and solicitations in response to recent Executive Orders mandating better alignment with mission-critical functions and reduction of redundancy.
In its statement, DHS explained that FirstSource III was determined to be non-mission critical, with overlapping offerings already available through existing federal contracting solutions like NASA SEWP and GSA Schedules. The agency emphasized its intent to continue using these best-in-class vehicles for future IT procurements.
The PACTS III cancellation comes just months after DHS launched the procurement effort in February 2024. Its predecessor, PACTS II, awarded in 2017 with a $1.5 billion ceiling, supported over $1.1 billion in obligations and became a mainstay for DHS components. Similarly, the FirstSource program and its successor, FirstSource II, facilitated more than $6.3 billion in small business IT procurements over the past 13 years.
The cancellations are also tied to broader changes within DHS leadership. Recently, DHS Secretary Kristi Noem implemented a policy requiring her office’s approval for all new contracts exceeding $100,000, signaling increased scrutiny over procurement decisions and budget allocation. As a result, DHS is pivoting toward using existing contract solutions like GSA’s OASIS+ and the Multiple Award Schedule (MAS) program to meet its evolving mission requirements.
GSA is currently preparing an on-ramp for OASIS+, issuing a Request for Information (RFI) on June 17 to gather feedback on five new domains for Phase II — including financial services, human capital, marketing, social services, and business administration. Responses to the RFI are due by July 8.
It is clear that a more centralized procurement process is on the horizon.
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