DoD's $24.7M HP-UX Capacity Services contract awarded to HP, Inc. for IT support

Contract Overview

Contract Amount: $24,704,832 ($24.7M)

Contractor: HP, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-10-01

End Date: 2010-09-30

Contract Duration: 364 days

Daily Burn Rate: $67.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HP-UX CAPACITY SERVICES

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94304

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to HP, INC. for work described as: HP-UX CAPACITY SERVICES Key points: 1. Contract awarded for IT capacity services, indicating a need for robust infrastructure support. 2. The contract value of approximately $24.7 million suggests a significant investment in maintaining critical systems. 3. Awarded under full and open competition, implying a competitive bidding process. 4. The contract duration of one year (364 days) points to a short-term need or a recurring service model. 5. The fixed-price contract type aims to control costs and provide budget certainty. 6. The North American Industry Classification System (NAICS) code 541519 suggests a broad range of computer-related services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific service details and market data for HP-UX capacity services in 2009-2010. The firm fixed-price structure suggests an attempt to manage costs, but the overall value proposition depends heavily on the actual performance and utilization of the capacity provided. Compared to similar IT infrastructure support contracts, the per-year cost of roughly $24.7 million is substantial, but its justification would rely on the criticality and scale of the systems supported.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this specific IT service requirement. While competition is generally positive, the exact impact on price discovery and value for money depends on the nature of the services and the specific capabilities of the bidders.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service offerings. The fact that multiple bids were received suggests that the government had options and was not locked into a single provider, potentially leading to cost savings.

Public Impact

The Department of Defense benefits from the provision of essential IT capacity services, ensuring the operational readiness of its systems. This contract supports the maintenance and availability of critical computing infrastructure required for defense operations. The services delivered likely impact various defense agencies and personnel reliant on these IT resources. Geographic impact is likely widespread, supporting DoD operations across different locations. Workforce implications may include IT professionals involved in managing and utilizing the HP-UX systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if HP-UX specific expertise is required and not widely available.
Risk of over-provisioning or under-utilization of capacity if demand forecasting is inaccurate.
Dependence on a single vendor for critical IT infrastructure components.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Firm fixed-price contract type helps in budget predictability and cost control.
The contract addresses a specific need for IT capacity, indicating strategic resource allocation.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT infrastructure and capacity services. The market for such services is characterized by specialized hardware and software, with vendors like HP historically playing a significant role in enterprise computing. Comparable spending benchmarks would typically involve analyzing other government or large enterprise contracts for similar IT capacity and maintenance services, considering factors like system criticality, scale, and service level agreements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless subcontractors were utilized without explicit reporting in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of Defense. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally facilitated through contract award databases, though detailed performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Department of Defense IT Modernization Programs
Defense Information Systems Agency (DISA) IT Services
Enterprise IT Infrastructure Support Contracts
IT Capacity and Resource Management

Risk Flags

Limited competition (3 bidders)
Potential for technology obsolescence (HP-UX)
Dependence on a single vendor's proprietary technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to HP, INC.. HP-UX CAPACITY SERVICES

Who is the contractor on this award?

The obligated recipient is HP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $24.7 million.

What is the period of performance?

Start: 2009-10-01. End: 2010-09-30.

What was the specific nature of the HP-UX capacity services provided under this contract?

The provided data indicates the contract was for 'HP-UX CAPACITY SERVICES.' HP-UX is a proprietary operating system developed by Hewlett Packard Enterprise (HPE) for their Integrity servers. Therefore, this contract likely involved the provision, maintenance, and potentially expansion of computing capacity on HP-UX based hardware. This could include server resources, storage, processing power, and associated support services necessary to ensure the operational availability and performance of critical defense IT systems running on this platform. The exact scope would be detailed in the contract's statement of work, which is not provided here.

How does the $24.7 million contract value compare to similar IT capacity services contracts awarded around 2009-2010?

Comparing the $24.7 million contract value requires context regarding the scale and criticality of the IT services. For a single year of capacity services for a major entity like the Department of Defense, this amount is substantial but not necessarily out of line, especially if it supported mission-critical systems. Benchmarking would involve looking at contracts for similar operating systems (like AIX or Solaris) or large-scale enterprise IT infrastructure support from other federal agencies or large corporations during that period. Factors such as the number of users, data volume, uptime requirements (e.g., 99.999%), and included support levels would significantly influence cost. Without these specifics, a direct comparison is difficult, but it represents a significant investment in IT infrastructure.

What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for IT capacity services, especially within the Department of Defense, typical SLAs would likely focus on system availability (uptime), response times for issue resolution, performance metrics (e.g., processing speed, latency), and potentially capacity utilization thresholds. The firm fixed-price nature of the contract suggests that the contractor was obligated to meet these defined service levels, with potential penalties for non-compliance or incentives for exceeding them. These details would have been outlined in the contract's statement of work.

What is the significance of awarding this contract under 'full and open competition' with only 3 bidders?

Awarding under 'full and open competition' signifies that the government solicited bids from all interested and qualified sources, promoting a fair and transparent procurement process. Receiving only 3 bids suggests a moderately competitive market for these specific HP-UX capacity services at the time. While more bidders generally lead to better price discovery and potentially lower costs, three bidders still provide a basis for comparison and negotiation. The level of competition can be influenced by factors such as the specialized nature of the technology (HP-UX), the size and complexity of the requirement, and the number of capable vendors in the market.

What is the historical spending trend for HP-UX capacity services within the Department of Defense?

The provided data only covers a single contract award from FY2009-2010. To understand historical spending trends for HP-UX capacity services within the Department of Defense (DoD), a broader analysis of contract data over multiple fiscal years would be necessary. This would involve searching for all contracts related to HP-UX support, maintenance, and capacity across various DoD agencies. Trends could reveal whether spending has increased, decreased, or remained stable, potentially indicating shifts in technology adoption (e.g., migration away from HP-UX), changes in infrastructure needs, or evolving procurement strategies. Without this broader dataset, specific historical trends cannot be determined from this single award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC101306R2000

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3000 HANOVER ST, PALO ALTO, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,704,832

Exercised Options: $24,704,832

Current Obligation: $24,704,832

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101307D2003

IDV Type: IDC

Timeline