DoD's $12.7M contract for computer systems design services awarded to BearingPoint, Inc. raises value concerns

Contract Overview

Contract Amount: $12,691,137 ($12.7M)

Contractor: Bearingpoint, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-12-01

End Date: 2008-10-03

Contract Duration: 2,133 days

Daily Burn Rate: $6.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Sector: IT

Place of Performance

Location: PENSACOLA, ESCAMBIA County, FLORIDA, 32502

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to BEARINGPOINT, INC. for work described as: Key points: 1. The contract's value appears high relative to the duration and scope of services. 2. Limited competition suggests potential for inflated pricing and reduced value for taxpayer dollars. 3. The long performance period without clear performance metrics indicates potential for cost overruns. 4. This contract represents a significant investment in IT services for the Department of Defense. 5. The sole-source nature of the award warrants scrutiny of the procurement process. 6. Lack of small business involvement limits opportunities for smaller, innovative firms.

Value Assessment

Rating: questionable

The total award amount of $12.7 million over approximately six years for computer systems design services appears to be on the higher end when compared to similar contracts. Without specific details on the deliverables, it is difficult to benchmark precisely, but the per-year cost of roughly $2.1 million for this type of service warrants further investigation. The lack of competition further complicates a fair value assessment, as it removes the downward pressure on pricing that competitive bidding typically provides. The extended duration of the contract without clear performance milestones also raises concerns about potential inefficiencies and cost creep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or when circumstances necessitate an urgent award. However, the absence of multiple bidders means that the government did not benefit from the price discovery and innovation that typically arise from a competitive bidding process. This can lead to higher prices and potentially less optimal solutions being selected.

Taxpayer Impact: The sole-source award means taxpayers may have paid a premium for these services, as there was no competitive pressure to drive down costs. It also limits the opportunity for other qualified companies to compete for and win government contracts.

Public Impact

The Department of Defense benefits from specialized computer systems design services, likely supporting critical defense operations. The contract supports the development and maintenance of complex IT systems essential for national security. The geographic impact is primarily within Florida, where the contractor is located. The contract likely supports a workforce of skilled IT professionals, contributing to the tech sector employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs.
Long contract duration without clear performance metrics could lead to inefficiencies.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized services.
Absence of small business set-aside opportunities.

Positive Signals

Contract awarded to a known entity (BearingPoint, Inc.) with potential for established expertise.
Services are critical for defense operations, indicating a necessary function.
Long duration may provide stability and continuity for essential IT services.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically Computer Systems Design Services. This sector is characterized by rapid innovation and a wide range of service providers, from large corporations to specialized small businesses. The federal government is a significant consumer of IT services, with spending often concentrated in areas like defense, intelligence, and civilian agency operations. Comparable spending benchmarks for similar IT services can vary widely based on complexity, duration, and security requirements, but a $12.7 million award over six years for system design is substantial.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there information indicating significant subcontracting opportunities for small businesses. The sole-source nature of the award further limits the potential for small business participation. This means that opportunities for smaller, potentially more agile and innovative firms to contribute to this specific defense IT need were likely missed, potentially impacting the broader small business ecosystem within the federal contracting space.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers and program managers. Accountability measures would be tied to the contract's performance clauses, though the specifics are not detailed here. Transparency is limited due to the sole-source nature and lack of publicly available performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Systems Agency IT Services
Department of Defense IT Modernization
Computer Systems Design Services Federal Contracts
Sole-Source IT Procurements
Long-Term IT Service Contracts

Risk Flags

Sole-source award
High contract value for duration
Lack of performance metrics detail
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to BEARINGPOINT, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BEARINGPOINT, 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 $12.7 million.

What is the period of performance?

Start: 2002-12-01. End: 2008-10-03.

What specific computer systems design services were provided under this contract, and what were the key performance indicators (KPIs)?

The provided data indicates the contract was for 'Computer Systems Design Services' under NAICS code 541512. However, specific details regarding the exact services rendered (e.g., software development, network design, system integration, cybersecurity architecture) and the associated Key Performance Indicators (KPIs) are not available in the provided data. Typically, such contracts would outline deliverables, milestones, and quality standards. Without this information, it's challenging to assess the effectiveness and efficiency of the services provided by BearingPoint, Inc. The duration of the contract (2133 days, approximately 6 years) suggests a potentially complex or ongoing set of services rather than a short-term project.

How was the $12.7 million total award amount justified for BearingPoint, Inc. on a sole-source basis?

The justification for a sole-source award typically rests on specific criteria outlined in federal acquisition regulations, such as the uniqueness of the service or contractor, urgent and compelling needs, or a lack of other responsible sources. For this contract, awarded by the Department of Defense to BearingPoint, Inc., the specific justification for not competing the requirement is not detailed in the provided data. Common reasons might include proprietary technology, specialized expertise only BearingPoint possessed at the time, or a follow-on to a previous sole-source effort where switching contractors would be prohibitively costly or disruptive. Without the official justification document (e.g., a Justification and Approval - J&A), it's impossible to definitively state why competition was precluded.

What is the historical spending pattern for computer systems design services by the Defense Information Systems Agency (DISA)?

Historical spending patterns for DISA on computer systems design services (NAICS 541512) would reveal trends in contract awards, average award values, and the prevalence of competitive versus sole-source procurements. Analyzing past DISA contracts in this category would help contextualize the $12.7 million award to BearingPoint. For instance, if DISA typically awards numerous competitive contracts in the multi-million dollar range for similar services, this sole-source award might appear less anomalous. Conversely, if most comparable services are competitively procured at lower price points, this contract's value and procurement method would warrant greater scrutiny. A comprehensive analysis would require access to historical federal procurement databases.

What was BearingPoint, Inc.'s track record with the Department of Defense prior to or during this contract period?

BearingPoint, Inc. has a history of contracting with the U.S. federal government, including the Department of Defense. Assessing their track record specifically for this $12.7 million computer systems design services contract would involve reviewing performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past performance issues, and their overall success in delivering on similar IT service contracts. A positive track record might lend some credence to the sole-source award, suggesting reliability. However, a history of issues or subpar performance would amplify concerns about the value and effectiveness of this particular contract, especially given its sole-source nature and significant value.

How does the duration of this contract (over 6 years) compare to typical IT service contracts awarded by the DoD?

Federal IT service contracts, particularly those involving system design and development, can have varying durations. Contracts awarded as 'Delivery Orders' against indefinite-delivery, indefinite-quantity (IDIQ) vehicles often have base periods and option periods that can extend for several years. However, a single, non-competed award for computer systems design services lasting over six years (2133 days) is relatively long. While long-term contracts can provide stability and continuity for critical systems, they also increase the risk of cost escalation, technological obsolescence, and reduced flexibility. Many agencies aim for shorter contract terms or incorporate mechanisms for regular re-competition or review to ensure continued value and alignment with evolving needs.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Contractor Details

Parent Company: Deloitte LLP (UEI: 014127109)

Address: 715 SIEBERT RD, SCOTT AIR FORC, IL, 62225

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DCA20002D5017

IDV Type: IDC

Timeline