DOT's FAA awards $217M for IT support, with Karsun Solutions LLC managing mission sustainment

Contract Overview

Contract Amount: $216,907,663 ($216.9M)

Contractor: Karsun Solutions LLC

Awarding Agency: Department of Transportation

Start Date: 2017-09-27

End Date: 2026-08-14

Contract Duration: 3,243 days

Daily Burn Rate: $66.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF TECHNICAL SUPPORT SERVICES FOR MISSION SUSTAINMENT AND ENHANCEMENT.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $216.9 million to KARSUN SOLUTIONS LLC for work described as: IGF::OT::IGF TECHNICAL SUPPORT SERVICES FOR MISSION SUSTAINMENT AND ENHANCEMENT. Key points: 1. Contract value of $217M over its period of performance suggests significant IT infrastructure needs. 2. The contract's duration of over 8 years indicates a long-term strategic partnership for IT services. 3. Full and open competition after exclusion of sources implies a deliberate selection process, potentially balancing cost and capability. 4. The 'Other Computer Related Services' NAICS code points to a broad scope of IT support, not limited to specific software or hardware. 5. The contract's Time and Materials pricing structure may pose risks if not closely managed to control costs. 6. The absence of small business set-aside or subcontracting goals warrants scrutiny regarding broader economic impact.

Value Assessment

Rating: fair

The total contract value of $217M over approximately 8.5 years averages to roughly $25.5M annually. Benchmarking this against similar large-scale IT support contracts for federal agencies is challenging without more specific service details. However, the duration and scope suggest a substantial investment. The Time and Materials pricing model, while flexible, can lead to cost overruns if not rigorously monitored, making value for money dependent on effective oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was open, certain sources may have been excluded based on specific criteria, possibly related to past performance, technical capabilities, or prior involvement. The exact number of bidders is not provided, but this method suggests a structured procurement process aimed at identifying a capable contractor.

Taxpayer Impact: This procurement method aims to ensure a competitive environment to secure the best value for taxpayers, though the exclusion of sources could limit the breadth of competition.

Public Impact

The Federal Aviation Administration (FAA) benefits through sustained and enhanced IT systems crucial for aviation safety and operations. Services delivered likely include IT infrastructure management, software support, system maintenance, and potentially modernization efforts. The primary geographic impact is within the FAA's operational areas, likely concentrated around its headquarters and major facilities. Workforce implications include the direct employment by Karsun Solutions LLC and potential indirect impacts on IT professionals within the FAA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing can lead to uncontrolled cost escalation without stringent oversight.
The broad 'Other Computer Related Services' NAICS code might obscure the specific nature and cost drivers of the services.
Lack of explicit small business subcontracting goals could limit opportunities for smaller firms in the IT sector.
The long contract duration increases the risk of technology obsolescence if not actively managed.

Positive Signals

Awarded through full and open competition, suggesting a competitive process to select the best value.
The significant contract value indicates a critical need for sustained IT support by a major agency.
The contractor, Karsun Solutions LLC, has been awarded a substantial contract, implying a level of trust and demonstrated capability.
The contract's long duration suggests a stable IT support environment for the FAA.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer-related services. The federal IT services market is substantial, with agencies like the FAA representing significant spending. Contracts of this magnitude often involve complex system integration, maintenance, and support for mission-critical operations. Benchmarks for similar large-scale IT support contracts vary widely based on scope, duration, and specific services, but a $217M award over 8+ years is indicative of a major IT services engagement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was aimed at larger, potentially more experienced contractors capable of handling the extensive scope and duration of the IT support services required. There is no explicit mention of subcontracting goals, which could mean limited opportunities for small businesses to participate in this specific contract, impacting the broader small business IT ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA) contracting officers and program managers. The Department of Transportation's Office of Inspector General (OIG) would also have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS, but detailed performance metrics and spending breakdowns may not be publicly available.

Related Government Programs

FAA IT Modernization Programs
Federal Civilian Agency IT Support Contracts
Cloud Computing Services for Government
Cybersecurity Services for Aviation

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of technology obsolescence over the long contract duration.
Limited visibility into specific services provided under broad NAICS code.
Lack of explicit small business subcontracting goals may limit economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $216.9 million to KARSUN SOLUTIONS LLC. IGF::OT::IGF TECHNICAL SUPPORT SERVICES FOR MISSION SUSTAINMENT AND ENHANCEMENT.

Who is the contractor on this award?

The obligated recipient is KARSUN SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $216.9 million.

What is the period of performance?

Start: 2017-09-27. End: 2026-08-14.

What is the track record of Karsun Solutions LLC in performing similar large-scale federal IT support contracts?

Karsun Solutions LLC has a history of securing federal contracts, particularly within the IT services domain. While this specific $217M contract with the FAA is substantial, the company has experience with various agencies, including NASA and the Department of Homeland Security. Their portfolio often includes areas like cloud engineering, application modernization, and enterprise IT support. Analyzing past performance on similar contracts would involve reviewing performance evaluations (e.g., CPARS reports, if available) to assess their ability to meet deadlines, manage costs, and deliver quality services. A deeper dive would compare their success rates and the scale of previous awards to gauge their capacity for this significant FAA engagement.

How does the average annual cost of this contract compare to similar IT support contracts for federal agencies of the FAA's size?

The average annual cost for this contract is approximately $25.5 million ($217M / 8.5 years). Comparing this requires identifying similar contracts for IT infrastructure management, sustainment, and enhancement services awarded to large federal agencies. Factors influencing cost include the scope of services (e.g., network management, cybersecurity, application development, help desk support), the number of users supported, geographic distribution, and specific technology stacks. Without granular data on comparable contracts, it's difficult to definitively benchmark. However, for a large agency like the FAA, which operates critical national infrastructure, this annual figure appears within a plausible range for comprehensive IT support, though rigorous benchmarking against peer agencies' spending on comparable services would be necessary for a precise value assessment.

What are the primary risks associated with the Time and Materials (T&M) pricing structure in this contract?

The primary risk with a Time and Materials (T&M) pricing structure is the potential for cost escalation if not managed effectively. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This flexibility can be beneficial for evolving requirements, but it places a significant burden on the government to closely monitor labor hours, resource utilization, and material costs to prevent overspending. Without robust oversight, contractors may have less incentive to control costs, leading to a higher total contract value than initially anticipated. This necessitates strong contract administration and performance metrics to ensure value for money.

What does 'Full and Open Competition After Exclusion of Sources' imply about the procurement process and potential bidder pool?

This procurement method, 'Full and Open Competition After Exclusion of Sources,' indicates that the solicitation was broadly advertised, allowing any responsible source to submit an offer. However, specific sources were excluded prior to or during the solicitation process. This exclusion is typically based on documented reasons such as past performance issues, failure to meet specific technical qualifications, or non-compliance with previous contract terms. While it aims to ensure only capable and suitable contractors participate, it inherently narrows the competitive pool compared to unrestricted full and open competition. The rationale for exclusion must be justifiable to maintain fairness and maximize competition within the defined parameters.

What are the potential implications of the absence of small business subcontracting requirements on the small business IT sector?

The absence of explicit small business subcontracting requirements in this contract suggests that Karsun Solutions LLC is not mandated to award a specific percentage of the work to small businesses. This can limit opportunities for small IT firms to participate in large federal contracts, potentially concentrating the benefits among larger prime contractors. While Karsun Solutions LLC may voluntarily engage small businesses, the lack of a formal requirement reduces the direct economic impact on the small business IT ecosystem. This contrasts with contracts that include set-asides or aggressive subcontracting goals, which are designed to foster small business growth and participation in federal contracting.

How does the scope defined by NAICS code 541519 ('Other Computer Related Services') compare to more specific IT service categories?

NAICS code 541519, 'Other Computer Related Services,' is a broad category encompassing a wide range of IT services not classified elsewhere. This can include services like computer facilities management, IT support, disaster recovery services, and IT consulting. Compared to more specific codes such as those for software development (e.g., 541511), custom computer programming (e.g., 541511), or computer systems design (e.g., 541512), NAICS 541519 suggests a less specialized or a more encompassing set of IT support functions. For this FAA contract, it implies a diverse range of IT services are likely being provided, potentially covering everything from help desk operations to system maintenance and integration, rather than focusing on a single niche.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 13655 DULLES TECHNOLOGY DRIVE STE 110, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $259,004,769

Exercised Options: $217,491,172

Current Obligation: $216,907,663

Actual Outlays: $154,316,280

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFACT17D00007

IDV Type: IDC

Timeline