DOT's FAA awards $63.3M IT support contract to Karsun Solutions LLC under full and open competition

Contract Overview

Contract Amount: $63,345,747 ($63.3M)

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: $19.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: DATA AS A SERVICE TECHNICAL SUPPORT SERVICES. IGF::OT::IGF

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $63.3 million to KARSUN SOLUTIONS LLC for work described as: DATA AS A SERVICE TECHNICAL SUPPORT SERVICES. IGF::OT::IGF Key points: 1. Contract awarded via Delivery Order under an existing IDIQ, indicating a structured procurement process. 2. The Time and Materials pricing structure may pose a risk for cost overruns if not closely managed. 3. The contract duration of over 8 years suggests a long-term need for these technical support services. 4. The NAICS code 541519 points to a broad category of 'Other Computer Related Services', requiring specific insight into the services rendered. 5. The contract is not set aside for small businesses, suggesting large prime contractors are expected to perform the work. 6. The award was made after exclusion of sources, which warrants further investigation into the justification for this approach.

Value Assessment

Rating: fair

The contract's value of $63.3 million over approximately 8 years suggests a significant investment in IT support. Benchmarking this against similar 'Other Computer Related Services' contracts is challenging without more specific service details. The Time and Materials (T&M) pricing model, while flexible, can lead to higher costs compared to fixed-price contracts if not managed diligently. The award amount appears reasonable for the duration and scope, but a detailed cost-benefit analysis would be needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the competition was intended to be open, specific sources may have been excluded prior to the solicitation. The exact number of bidders and the rationale for excluding certain sources are critical to understanding the level of competition. A limited competition, even if initially open, can sometimes lead to less competitive pricing.

Taxpayer Impact: The exclusion of sources, even if justified, may limit the number of potential offerors, potentially impacting the government's ability to secure the most cost-effective solution for taxpayers.

Public Impact

The Federal Aviation Administration (FAA) benefits from continuous technical support for its IT systems, ensuring operational efficiency. Services delivered likely include IT infrastructure management, software support, and potentially cybersecurity assistance. The contract's impact is primarily within the federal government's IT operations, supporting critical aviation infrastructure. Workforce implications may include the direct employment of IT professionals by Karsun Solutions LLC and potentially their subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure.
The 'exclusion of sources' clause requires scrutiny to ensure fair competition was maintained.
Long contract duration (over 8 years) may reduce flexibility to adopt newer technologies or services if needs change.

Positive Signals

Award to an established contractor (Karsun Solutions LLC) suggests a degree of reliability.
Delivery Order under an IDIQ indicates a pre-vetted contractor and a streamlined procurement process.
The contract supports critical IT functions for the FAA, indicating a recognized need and investment.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer-related services. The IT services market is highly competitive and rapidly evolving. The FAA, as a major government agency, represents a significant client for IT support providers. Comparable spending benchmarks for IT support services within federal agencies can vary widely based on the complexity and scale of the systems supported. This contract's value of $63.3 million over its term places it as a substantial award within the federal IT services landscape.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. This suggests that the primary contractor, Karsun Solutions LLC, is expected to perform the majority of the work. There is no explicit information regarding subcontracting plans for small businesses. Without a small business subcontracting plan requirement, the direct impact on the small business IT ecosystem may be limited, unless Karsun Solutions voluntarily engages small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Federal Aviation Administration's contracting officers and program managers. Performance metrics and deliverables outlined in the contract would be used to monitor progress and ensure compliance. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected within the contract's execution.

Related Government Programs

IT Support Services
Cloud Computing Services
Cybersecurity Services
Software Development and Maintenance
IT Infrastructure Management

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited competition due to 'exclusion of sources'.
Risk of technology obsolescence over long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $63.3 million to KARSUN SOLUTIONS LLC. DATA AS A SERVICE TECHNICAL SUPPORT SERVICES. IGF::OT::IGF

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 $63.3 million.

What is the period of performance?

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

What specific IT services are encompassed by the NAICS code 541519 for this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that can include a wide range of IT services beyond traditional software development or hardware maintenance. For this specific contract with the FAA, it likely encompasses services such as IT consulting, system integration, IT project management, data processing services, and potentially specialized technical support for unique FAA systems. Without the detailed Statement of Work (SOW), it's difficult to pinpoint the exact services, but it suggests a comprehensive IT support role rather than a narrowly defined task. The 'DATA AS A SERVICE TECHNICAL SUPPORT SERVICES' in the description provides a clue, indicating a focus on supporting data-centric IT functions and the underlying infrastructure.

What is the justification for awarding this contract after the exclusion of sources?

The justification for awarding a contract after the exclusion of sources typically stems from specific circumstances outlined in federal acquisition regulations (FAR). Common reasons include a sole-source justification (though this contract states 'full and open competition after exclusion of sources', implying multiple potential bidders were considered but some were excluded), urgent and compelling needs where only a specific contractor can meet the requirement, or if only one source is capable of performing the work. For this contract, the 'exclusion of sources' suggests that a preliminary market research or solicitation process identified potential offerors, but some were deemed ineligible or unsuitable for reasons such as capability, past performance, or security concerns, before the final competition was opened to the remaining eligible sources. A detailed review of the Justification and Approval (J&A) document, if one exists, would provide the precise rationale.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar IT support services?

Time and Materials (T&M) contracts are characterized by payment based on the actual labor hours expended and the cost of materials used. This structure offers flexibility, allowing for adjustments in scope and effort as a project evolves, which can be beneficial for IT support where requirements may not be fully defined at the outset. However, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts, as the final cost is not predetermined. For IT support services, fixed-price or cost-plus-fixed-fee contracts are often preferred when the scope of work is well-defined, as they provide better cost certainty. The FAA's choice of T&M suggests a need for adaptability in the support services, but it necessitates robust oversight to control costs and ensure efficient resource utilization.

What is the historical spending pattern for 'Other Computer Related Services' by the Federal Aviation Administration?

Analyzing historical spending patterns for 'Other Computer Related Services' (NAICS 541519) by the FAA requires access to detailed federal procurement data over several fiscal years. Generally, agencies like the FAA have substantial and consistent spending in this category due to the complexity and critical nature of their IT infrastructure. Spending can fluctuate based on major system upgrades, modernization efforts, or shifts in technology. Without specific historical data for this NAICS code at the FAA, it's difficult to provide precise figures. However, it is reasonable to assume that the FAA consistently invests millions annually in such services to maintain air traffic control systems, operational software, and administrative IT functions, making this $63.3 million award over 8 years a significant, but potentially typical, investment for a large-scale IT support requirement.

What are the potential risks associated with a contract duration of over 8 years for IT support?

A contract duration exceeding 8 years for IT support, like this one, presents several potential risks. Firstly, technology evolves rapidly; an 8-year-old contract might not align with current or future technological advancements, potentially leading to the use of outdated systems or requiring costly modifications. Secondly, the contractor's capabilities or focus might shift over such a long period, impacting service quality or innovation. Thirdly, the government's needs themselves may change significantly, making the original scope of work less relevant or inefficient. Finally, long-term contracts can sometimes reduce the incentive for the contractor to maintain peak performance or offer competitive pricing throughout the entire period, especially if competition was limited during the initial award. Robust contract management, including regular reviews and potential for modifications, is crucial to mitigate these risks.

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: $69,772,060

Exercised Options: $64,161,436

Current Obligation: $63,345,747

Actual Outlays: $51,041,761

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,500,000

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