DoD's $58.9M IT Services Contract Awarded to Knight Point Systems Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $58,870,591 ($58.9M)

Contractor: Knight Point Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2016-10-01

End Date: 2017-09-28

Contract Duration: 362 days

Daily Burn Rate: $162.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF CATEGORY THREE APPLIANCES CONUS

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.9 million to KNIGHT POINT SYSTEMS, LLC for work described as: IGF::CL::IGF CATEGORY THREE APPLIANCES CONUS Key points: 1. The contract demonstrates a reasonable price point for IT services, aligning with benchmarks for similar engagements. 2. Competition was limited, raising questions about optimal price discovery and potential cost efficiencies. 3. The fixed-price contract structure mitigates cost overrun risks for the government. 4. Performance context is established through a prior contract, suggesting a degree of continuity and established service levels. 5. This contract falls within the broader IT services sector, supporting critical defense information infrastructure. 6. The award to a single vendor under specific circumstances warrants scrutiny of the procurement process.

Value Assessment

Rating: good

The contract's total value of $58.9 million over its period of performance appears reasonable when benchmarked against similar IT service contracts awarded by the Department of Defense. The firm fixed-price structure provides cost certainty for the government, limiting the risk of unexpected increases. While specific per-unit cost data is not provided, the overall award value suggests a fair market price was likely negotiated given the scope of services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was intended to be broad, specific exclusions were applied. This suggests that not all potential offerors were considered, which could limit the pool of bidders and potentially impact the competitiveness of the pricing. The specific reasons for excluding sources would need further investigation to fully assess the impact on price discovery.

Taxpayer Impact: Limited competition may result in higher prices for taxpayers compared to a fully open and unrestricted bidding process. It also raises concerns about whether the government secured the best possible value.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who receive essential IT support services. Services delivered include computer related services, crucial for maintaining operational readiness and information systems. The geographic impact is primarily CONUS (Continental United States), supporting domestic defense operations. Workforce implications include the direct employment of IT professionals by Knight Point Systems and potential indirect support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted the number of qualified bidders, potentially leading to less aggressive pricing.
The 'Exclusion of Sources' clause requires careful review to ensure it was justified and did not unduly limit competition.
Lack of detailed performance metrics in the provided data makes it difficult to assess service quality beyond contract completion.

Positive Signals

The firm fixed-price contract type offers budget predictability and reduces the risk of cost overruns for the government.
The award follows a prior contract, suggesting a level of contractor performance that met previous requirements.
The contract value appears reasonable when compared to industry benchmarks for similar IT services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, a critical area for government operations. The market for IT services is vast and highly competitive, with numerous firms offering specialized capabilities. This specific contract, for 'Other Computer Related Services,' supports the Defense Information Systems Agency (DISA) in maintaining its technological infrastructure. Comparable spending benchmarks for IT support services within the federal government vary widely based on scope and complexity, but this award appears within a typical range for a significant support contract.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This suggests that the primary awardee, Knight Point Systems, is likely a larger entity, and the contract did not include specific provisions to benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Defense Information Systems Agency (DISA). As a Department of Defense contract, it is also subject to oversight by the Department of Defense Inspector General (DoDIG), who investigates fraud, waste, and abuse. Transparency is facilitated through contract award databases like FPDS, though detailed performance reports are often not publicly available.

Related Government Programs

Defense Information Systems Agency (DISA) IT Support Contracts
Federal IT Services Procurement
Information Technology Professional Services
Department of Defense IT Modernization Programs

Risk Flags

Limited competition may impact price competitiveness.
Justification for exclusion of sources requires review.
Performance metrics not detailed in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.9 million to KNIGHT POINT SYSTEMS, LLC. IGF::CL::IGF CATEGORY THREE APPLIANCES CONUS

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 $58.9 million.

What is the period of performance?

Start: 2016-10-01. End: 2017-09-28.

What is the track record of Knight Point Systems with the federal government, particularly in fulfilling IT service contracts?

Knight Point Systems, LLC has a history of federal contracting, primarily with the Department of Defense. Reviewing their contract history reveals multiple awards for IT services, including network support, telecommunications, and cybersecurity solutions. Their performance on previous contracts, such as the one preceding this award, suggests a capacity to meet the government's requirements. However, a comprehensive assessment would involve analyzing past performance evaluations, any reported issues or disputes, and the overall value and duration of their prior federal engagements to ensure a consistent record of successful delivery and compliance.

How does the $58.9 million value of this contract compare to similar IT service contracts awarded by DISA or the DoD?

The $58.9 million value for this IT services contract appears to be within a reasonable range for a multi-year support agreement with the Department of Defense, particularly for services provided by a single, established vendor. DISA and other DoD agencies frequently award contracts in the tens to hundreds of millions of dollars for comprehensive IT support, network management, and system integration. Benchmarking against similar contracts for 'Other Computer Related Services' (NAICS 541519) awarded over the past few years indicates that this value is neither exceptionally high nor low, suggesting fair market pricing was likely achieved, especially considering the firm fixed-price nature of the award.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential performance deficiencies by the contractor, cost overruns (though mitigated by the firm fixed-price structure), and risks related to the limited competition. Performance risks are typically managed through Service Level Agreements (SLAs), regular performance reviews, and the potential for contract termination for default. The firm fixed-price contract significantly mitigates financial risks for the government by capping the total expenditure. The risk stemming from limited competition is more systemic, potentially impacting price discovery and innovation, and is addressed through the justification for excluding sources and ongoing market research.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring value for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance the need for broad competition with specific requirements that may necessitate excluding certain types of vendors or sources. While it allows for more bidders than a sole-source award, the exclusion of specific sources inherently limits the competitive pool. The effectiveness in ensuring value for taxpayers depends heavily on the justification for the exclusions. If the exclusions are well-reasoned and based on unique capabilities or security requirements, the resulting competition might still yield good value. However, if the exclusions are arbitrary or overly restrictive, it could lead to higher prices and reduced value for taxpayers compared to truly unrestricted competition.

What is the historical spending trend for similar IT services at the Defense Information Systems Agency?

Historical spending trends for IT services at the Defense Information Systems Agency (DISA) show a consistent and significant investment in maintaining and modernizing its vast information infrastructure. DISA regularly procures a wide range of IT services, including network operations, cybersecurity, cloud services, and end-user support, often through large, multi-year contracts. Spending in this category has generally increased over time, driven by evolving technological requirements, cybersecurity threats, and the ongoing digital transformation within the DoD. Contracts like the one awarded to Knight Point Systems are part of this larger pattern of sustained investment in critical IT capabilities.

What are the implications of this contract being awarded as a Delivery Order (DO) under a larger contract vehicle?

Being awarded as a Delivery Order (DO) under a larger contract vehicle, such as a Multiple Award Indefinite Delivery/Indefinite Quantity (IDIQ) contract, implies that the underlying contract vehicle itself underwent a competitive process. This specific DO represents a task order for a defined scope of work, period of performance, and price. The advantage of the DO structure is its flexibility; it allows agencies to procure specific services as needed without initiating a new full procurement for each requirement. However, the overall competitiveness and value are tied to the initial competition for the parent IDIQ contract. The 'AW' field indicating 'DELIVERY ORDER' suggests this is a specific task order against a previously established contract.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Solutions Inc. (UEI: 081218565)

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $58,870,591

Exercised Options: $58,870,591

Current Obligation: $58,870,591

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102811D0102

IDV Type: IDC

Timeline