DoD's $28.5M HP Managed Services Contract Awarded to HP, Inc. for IT Support

Contract Overview

Contract Amount: $28,491,865 ($28.5M)

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: $78.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HP WLL MANAGED SERVICES

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to HP, INC. for work described as: HP WLL MANAGED SERVICES Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract value of approximately $28.5 million over one year indicates a significant IT services investment. 3. Awarded to HP, Inc., a major player in the IT services market, suggesting reliance on established vendors. 4. The 'Other Computer Related Services' NAICS code points to a broad scope of IT support. 5. Fixed-price contract type aims to control costs for the government. 6. The contract was awarded in California, potentially impacting the local IT workforce.

Value Assessment

Rating: fair

The contract value of $28.5 million for one year of managed IT services appears substantial. Benchmarking this against similar large-scale managed services contracts for federal agencies would be necessary to determine true value for money. Without specific performance metrics or comparisons to industry standards for the services rendered, it's difficult to definitively assess if the pricing was competitive or if the government received excellent value. The fixed-price nature suggests an attempt to cap costs, but the overall value hinges on the quality and scope of services delivered.

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 4 bidders suggests a moderate level of competition for this significant IT services contract. While multiple bidders are positive, the specific number (4) doesn't necessarily guarantee the most competitive pricing or innovative solutions without further analysis of the bids received and the specific requirements of the solicitation.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings from contractors vying for the award.

Public Impact

The Department of Defense benefits from managed IT services to ensure operational continuity and support. The contract likely supports critical IT infrastructure and user support for military and civilian personnel. Services are geographically focused within California, potentially impacting local IT job creation or utilization. The contract supports the Defense Information Systems Agency (DISA) in its mission to provide IT support to the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a large IT services provider.
Reliance on a single vendor for critical IT infrastructure could pose risks if performance falters.
Scope creep could lead to cost overruns if not managed tightly under the fixed-price structure.

Positive Signals

Award to a well-established IT services provider (HP, Inc.) suggests a degree of reliability and experience.
Fixed-price contract type provides cost certainty for the government.
Full and open competition indicates an effort to secure the best possible offer.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on managed IT services. The market for federal IT services is substantial, with agencies increasingly outsourcing complex IT functions to manage costs and leverage specialized expertise. Contracts like this are common as agencies seek to modernize infrastructure, enhance cybersecurity, and improve operational efficiency. Benchmarks for similar managed services contracts often range from tens to hundreds of millions of dollars annually, depending on the scope and complexity.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and opportunities for small businesses would likely be through direct subcontracting by HP, Inc., which is not explicitly detailed here. The absence of specific small business provisions means the direct impact on the small business IT ecosystem from this particular award is likely limited.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a fixed-price contract, performance monitoring and acceptance of services are key oversight areas. The Department of Defense and the Defense Information Systems Agency would have internal processes to ensure contract compliance and service delivery. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
Federal Managed Services Contracts
IT Support Services

Risk Flags

Potential for vendor lock-in
Reliance on a single large vendor
Broad NAICS code may obscure specific service details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to HP, INC.. HP WLL MANAGED 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 $28.5 million.

What is the period of performance?

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

What is the track record of HP, Inc. in delivering managed IT services to the federal government, particularly for the Department of Defense?

HP, Inc. has a long-standing history of providing IT hardware, software, and services to the federal government, including extensive work with the Department of Defense. They are a major contractor across various agencies, often securing large contracts for managed services, IT infrastructure support, and technology solutions. Their track record generally includes experience with complex IT environments and large-scale deployments. However, specific performance on individual contracts can vary, and a detailed review of past performance evaluations, past performance information (PPI), and any contract disputes or awards would be necessary for a comprehensive assessment. For this specific contract, the provided data does not include performance history, but HP's overall presence suggests a capacity to handle such requirements.

How does the $28.5 million contract value compare to similar managed IT services contracts awarded by the DoD or other federal agencies?

The $28.5 million contract value for one year of managed IT services is a significant but not extraordinary amount for a federal agency like the Department of Defense. Large federal IT services contracts can range from tens of millions to hundreds of millions of dollars annually, depending on the scope, duration, and complexity of services. For instance, broader IT modernization efforts or enterprise-wide managed services agreements often exceed this figure. Contracts for specific functions like network management, cybersecurity services, or end-user support might be smaller. To provide a precise benchmark, one would need to compare this contract's specific deliverables (e.g., number of users supported, types of systems managed, service level agreements) against publicly available data for comparable contracts awarded around the same period by agencies of similar size and mission.

What are the primary risks associated with this type of managed IT services contract for the government?

Several risks are associated with managed IT services contracts. A primary risk is vendor lock-in, where the government becomes heavily reliant on a single provider, making it difficult and costly to switch vendors in the future. Performance risk is also significant; if the contractor fails to meet service level agreements (SLAs) or deliver the expected quality of service, it can disrupt critical government operations. Security risks are paramount, as the contractor will have access to sensitive government data and systems, requiring robust cybersecurity measures and oversight. Cost overruns, despite a fixed-price structure, can occur through scope creep or poorly defined requirements. Finally, there's a risk of reduced government expertise in managing IT if too many functions are outsourced.

What does the 'Other Computer Related Services' NAICS code (541519) imply about the scope of services covered by this contract?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specifically classified under other codes like custom programming, computer systems design, or data processing. This implies that the contract could cover services such as IT consulting, IT support and troubleshooting, network management, system administration, IT project management, disaster recovery planning, and potentially even some aspects of IT infrastructure deployment or maintenance. The broadness of this code suggests flexibility in the services that can be provided under the contract, but it also means the specific deliverables would need to be clearly defined in the contract's statement of work to ensure alignment with the government's needs and to manage expectations effectively.

What is the significance of the contract being awarded under 'Full and Open Competition' with 4 bidders?

Awarding a contract under 'Full and Open Competition' signifies that the solicitation was made available to all responsible sources, and any interested party meeting the qualifications could submit a bid. This is generally the preferred method of procurement as it maximizes the potential for competition and aims to secure the best value for the government. The fact that there were 4 bidders indicates a reasonable level of interest in the contract. While more bidders could potentially lead to even greater price competition, 4 bidders suggest that the market was sufficiently engaged and that the government likely received multiple viable proposals. This competitive environment helps in price discovery and encourages contractors to offer competitive terms and services.

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: 4

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: $28,491,865

Exercised Options: $28,491,865

Current Obligation: $28,491,865

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101307D2004

IDV Type: IDC

Timeline