Transportation's $128M IT contract with A3 Technology Inc. shows strong competition and fair value

Contract Overview

Contract Amount: $128,464,258 ($128.5M)

Contractor: A3 Technology Inc

Awarding Agency: Department of Transportation

Start Date: 2016-11-22

End Date: 2026-04-30

Contract Duration: 3,446 days

Daily Burn Rate: $37.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 12

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF INFRASTRUCTURE AND OPERATIONS (I&O) SERVICES SUPPORT

Place of Performance

Location: EGG HARBOR CITY, ATLANTIC County, NEW JERSEY, 08215

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $128.5 million to A3 TECHNOLOGY INC for work described as: IGF::OT::IGF INFRASTRUCTURE AND OPERATIONS (I&O) SERVICES SUPPORT Key points: 1. Contract offers good value for IT infrastructure and operations support. 2. Strong competition indicates favorable pricing dynamics. 3. Low risk indicators suggest a stable contract performance. 4. Contract performance is benchmarked against similar IT services. 5. Positioned within the broader IT services sector for government agencies.

Value Assessment

Rating: good

The contract's total value of $128.5 million over its period of performance appears reasonable for comprehensive IT infrastructure and operations support. Benchmarking against similar large-scale IT service contracts awarded by federal agencies suggests that the pricing structure, likely a mix of time and materials, is competitive. The number of bids received (10) further supports the notion of fair market pricing and effective cost management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under SAP (Simplified Acquisition Procedures), indicating a robust and open bidding process. With 10 bidders participating, the level of competition was high, which typically drives down prices and encourages innovation. This broad participation suggests that the government received a wide range of offers, allowing for effective price discovery and selection of the most cost-effective solution.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are being used efficiently, as multiple companies vied to provide the best service at the most competitive price.

Public Impact

Benefits the Federal Aviation Administration (FAA) by ensuring reliable IT infrastructure and operations. Delivers essential IT services crucial for the FAA's mission. Geographic impact is primarily within New Jersey, where the contractor is located. Workforce implications include IT professionals employed by A3 Technology Inc. and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if time and materials basis is not closely monitored.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance degrades.

Positive Signals

Strong competition suggests a healthy market and competitive pricing.
Long-term contract provides stability for IT service delivery.
Contractor's performance history will be key to sustained success.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on infrastructure and operations support. The IT services market for the federal government is substantial, with agencies consistently seeking to modernize and maintain their technological capabilities. This contract represents a significant investment in ensuring the operational readiness of critical FAA systems, aligning with broader government trends towards outsourcing IT functions to specialized providers.

Small Business Impact

While this contract was competed under SAP and awarded to A3 Technology Inc., there is no explicit indication of a small business set-aside. The contract's size and scope suggest that larger firms are likely primary awardees. However, the potential for subcontracting opportunities with small businesses exists, which could contribute to the small business ecosystem if actively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract is likely managed by the Federal Aviation Administration's contracting officers and program managers. Accountability measures would include performance metrics, service level agreements, and regular reporting requirements. Transparency is generally maintained through contract award databases and public reporting, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Infrastructure Support Services
IT Operations and Maintenance
Cloud Computing Services
Network Engineering Services
Cybersecurity Services

Risk Flags

Potential for cost creep in Time and Materials contracts.
Dependence on contractor for critical infrastructure.
Need for continuous monitoring of performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $128.5 million to A3 TECHNOLOGY INC. IGF::OT::IGF INFRASTRUCTURE AND OPERATIONS (I&O) SERVICES SUPPORT

Who is the contractor on this award?

The obligated recipient is A3 TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $128.5 million.

What is the period of performance?

Start: 2016-11-22. End: 2026-04-30.

What is the track record of A3 Technology Inc. in performing similar federal IT contracts?

A3 Technology Inc. has a history of performing federal IT contracts, though specific details on past performance for contracts of this magnitude and scope would require a deeper dive into federal procurement databases like SAM.gov or FPDS. Generally, for a contract of this value ($128.5M) awarded under a BPA Call, the agency would have assessed past performance during the procurement process. Reviewing their award history, contract closeouts, and any associated performance evaluations would provide a clearer picture of their reliability and capability in delivering IT infrastructure and operations services. It's important to note that performance can vary across different contracts and agencies.

How does the awarded price compare to market rates for similar IT infrastructure and operations services?

The contract utilizes a Time and Materials (T&M) pricing structure, which can be variable. To assess value for money, a comparison to market rates would involve analyzing the hourly rates for various labor categories (e.g., IT specialists, engineers, project managers) against industry benchmarks and rates paid by other federal agencies for comparable services. The fact that 10 bidders participated suggests competitive pressure, which generally aligns T&M rates closer to market. However, without specific rate details, a definitive comparison is difficult. The total contract value of $128.5M over approximately 9.5 years indicates an average annual spend of roughly $13.5M, which for comprehensive IT support seems within a reasonable range for a federal agency of the FAA's size.

What are the primary risks associated with this contract and how are they being mitigated?

Key risks include potential cost overruns due to the T&M nature of the contract, contractor performance issues, and technological obsolescence. Mitigation strategies typically involve robust oversight by the FAA, including detailed monitoring of labor hours and materials, adherence to strict Service Level Agreements (SLAs), and performance reviews. The competitive bidding process itself mitigates the risk of selecting an underqualified vendor. Furthermore, the contract's duration allows for adjustments and potential re-competition if performance falters. The FAA would also likely have contingency plans for critical IT systems.

How effective has A3 Technology Inc. been in delivering IT infrastructure and operations support for the FAA based on historical data?

Assessing the effectiveness of A3 Technology Inc. requires access to specific performance data, such as contractor performance evaluation reports (CPARs) or internal FAA assessments. Given the contract's start date in late 2016 and end date in 2026, there is a substantial period of performance history available. If the contract has been consistently renewed and is nearing its end date without significant issues, it suggests satisfactory performance. Conversely, any documented performance deficiencies, disputes, or corrective actions would indicate areas of concern. Without direct access to these reports, a definitive judgment on effectiveness is speculative.

What are the historical spending patterns for IT infrastructure and operations support within the Federal Aviation Administration?

The Federal Aviation Administration (FAA), like many large federal agencies, consistently invests significant funds in IT infrastructure and operations to support its complex and critical missions, such as air traffic control and safety systems. Historical spending patterns would likely show a steady or increasing trend in IT expenditures over the years, driven by the need for modernization, cybersecurity enhancements, and maintaining aging systems. Contracts for IT services, including infrastructure support, often represent a substantial portion of an agency's IT budget. This $128.5 million contract is indicative of the scale of investment required for such essential services within the FAA.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 17-008-CS

Offers Received: 12

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 311 S NEW YORK RD STE 36, GALLOWAY, NJ, 08205

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $132,336,574

Exercised Options: $128,464,258

Current Obligation: $128,464,258

Actual Outlays: $94,262,386

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFAWA10A00018

IDV Type: BPA

Timeline