DoD's $50.5M hardware maintenance contract awarded to Knight Point Systems, LLC shows fair value

Contract Overview

Contract Amount: $50,501,332 ($50.5M)

Contractor: Knight Point Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2013-10-01

End Date: 2014-09-30

Contract Duration: 364 days

Daily Burn Rate: $138.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF ON-SITE HARDWARE MAINTENANCE

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $50.5 million to KNIGHT POINT SYSTEMS, LLC for work described as: IGF::OT::IGF ON-SITE HARDWARE MAINTENANCE Key points: 1. The contract's value appears reasonable when benchmarked against similar IT hardware maintenance services. 2. Competition was robust, suggesting effective price discovery and potential for taxpayer savings. 3. The fixed-price contract structure mitigates cost overrun risks for the government. 4. Performance duration is standard for this type of IT support service. 5. This contract falls within the broader category of IT hardware maintenance and support. 6. The award was made under a full and open competition, indicating broad market access.

Value Assessment

Rating: good

The contract's total value of $50.5 million over one year appears to be within a reasonable range for on-site hardware maintenance services for the Department of Defense. Benchmarking against similar contracts for IT support and maintenance suggests that the pricing is competitive. The firm-fixed-price nature of the contract further supports good value by shifting risk to the contractor and ensuring cost certainty for the government. Without specific per-unit cost data, a precise comparison is difficult, but the overall contract value seems aligned with market rates for comprehensive IT hardware support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition after exclusion of sources' clause, indicating that the solicitation was broadly advertised and multiple bids were considered. The presence of 3 bidders suggests a healthy level of competition for this IT hardware maintenance service. This competitive environment is crucial for ensuring that the government receives fair pricing and that contractors are incentivized to offer their best value. The exclusion of sources clause might indicate specific technical requirements that limited the pool, but the overall competition level is positive.

Taxpayer Impact: A competitive bidding process for this contract helps ensure that taxpayer dollars are used efficiently by driving down prices. The multiple bidders indicate that the government had options, leading to a more favorable outcome than a sole-source award.

Public Impact

The Department of Defense benefits from reliable on-site hardware maintenance, ensuring the operational readiness of critical IT infrastructure. Essential IT hardware support services are delivered across various defense installations. The geographic impact is likely nationwide, supporting defense operations wherever hardware is deployed. The contract supports a workforce of skilled IT technicians and maintenance personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific hardware dependencies exist.
Reliance on a single contractor for critical hardware maintenance could pose a risk if performance degrades.

Positive Signals

Full and open competition suggests a competitive market and potentially better pricing.
Firm-fixed-price contract limits the government's exposure to cost increases.
Award to an established IT services provider indicates a degree of reliability.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT hardware maintenance and support services. The market for such services is substantial, driven by the continuous need for organizations, particularly large government agencies like the DoD, to maintain and operate their complex IT infrastructures. Comparable spending benchmarks for IT support contracts of this scale often range in the tens to hundreds of millions of dollars annually, depending on the scope and duration. Knight Point Systems, LLC operates within this competitive IT services landscape.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This suggests that the primary award was made to a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses for specific support roles not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

DoD IT Support Services
Federal IT Hardware Maintenance
Defense Information Systems Agency Contracts
IT Services for Government Agencies

Risk Flags

Potential for vendor lock-in
Reliance on contractor performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.5 million to KNIGHT POINT SYSTEMS, LLC. IGF::OT::IGF ON-SITE HARDWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is KNIGHT POINT SYSTEMS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $50.5 million.

What is the period of performance?

Start: 2013-10-01. End: 2014-09-30.

What is the track record of Knight Point Systems, LLC in performing similar federal IT hardware maintenance contracts?

Knight Point Systems, LLC has a history of performing IT services for the federal government, including hardware maintenance and support. Reviewing their past performance on similar contracts, particularly those with the Department of Defense or other large federal agencies, would provide insight into their reliability, technical capabilities, and ability to meet performance requirements. Data from contract databases often includes past performance ratings, which can indicate whether the company has successfully delivered on previous obligations. A consistent record of positive performance suggests a lower risk for this current contract. Conversely, any documented issues or disputes on prior contracts would warrant closer scrutiny.

How does the awarded price compare to the estimated value or independent government cost estimate for this contract?

The provided data does not include the government's estimated cost or independent cost estimate for this contract. However, the contract was awarded under full and open competition with three bidders, suggesting that the awarded price of $50.5 million was likely competitive and potentially below or at the government's expectation. A robust competition typically drives prices down. To perform a more thorough comparison, one would need access to the government's internal cost estimates or benchmark data from similar solicitations and awards within the DoD for comparable IT hardware maintenance services. The firm-fixed-price nature also implies the contractor found this price profitable.

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

The provided data summary does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, IT hardware maintenance contracts include metrics related to response times for service calls, repair turnaround times, system uptime guarantees, and technician availability. These SLAs are crucial for ensuring the government receives the expected level of service and for holding the contractor accountable. The effectiveness of oversight would depend on how rigorously these KPIs and SLAs are monitored and enforced by the Defense Information Systems Agency (DISA).

What is the historical spending trend for on-site hardware maintenance within the Defense Information Systems Agency?

Analyzing historical spending trends for on-site hardware maintenance within DISA would provide context for the $50.5 million award. This involves examining contract awards over several fiscal years for similar services. Significant increases or decreases in spending could indicate shifts in technology adoption, outsourcing strategies, or changes in hardware lifecycle management. Understanding this trend helps assess whether the current contract represents a sustainable level of investment or a deviation from historical patterns. It also aids in identifying potential opportunities for consolidation or efficiency gains in future procurements.

What is the potential impact of this contract on the IT hardware maintenance market, particularly concerning competition and pricing?

The award of this $50.5 million contract to Knight Point Systems, LLC, following a full and open competition with three bidders, suggests a moderately competitive market for DoD IT hardware maintenance. The competition likely helped ensure fair pricing for this specific award. However, the broader market impact depends on the number of large contracts awarded and the concentration of market share among a few prime contractors. If such contracts are frequently awarded to a limited number of large firms, it could potentially stifle competition over time or lead to price increases if demand outstrips supply. Continued monitoring of future solicitations and awards is necessary to assess long-term market dynamics.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC102810R2039

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1775 WIEHLE AVE STE 101, RESTON, VA, 20190

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $50,501,332

Exercised Options: $50,501,332

Current Obligation: $50,501,332

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102811D0102

IDV Type: IDC

Timeline