DoD's $18.3M contract for enterprise infrastructure services awarded to VIATECH, INC. shows fair value

Contract Overview

Contract Amount: $18,310,507 ($18.3M)

Contractor: Viatech, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-15

End Date: 2014-03-28

Contract Duration: 925 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: CECOM LIFE CYCLE MANAGEMENT COMMAND SOFTWARE ENGINEERING CENTER S3 DIRECTORATE APPLICATION SUPPORT DIVISION ENTERPRISE INFRASTRUCTURE SERVICES

Place of Performance

Location: EATONTOWN, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $18.3 million to VIATECH, INC. for work described as: CECOM LIFE CYCLE MANAGEMENT COMMAND SOFTWARE ENGINEERING CENTER S3 DIRECTORATE APPLICATION SUPPORT DIVISION ENTERPRISE INFRASTRUCTURE SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar engineering services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract type (Cost Plus Award Fee) introduces some performance-based incentives. 4. The duration of the contract (925 days) indicates a need for sustained support. 5. The award was made by CECOM LCMC Software Engineering Center, a key DoD entity. 6. The contractor, VIATECH, INC., has a history of performing similar government contracts.

Value Assessment

Rating: good

The $18.3 million contract value for enterprise infrastructure services appears to be within a reasonable range when compared to similar contracts for engineering services. The Cost Plus Award Fee (CPA) structure allows for flexibility and incentivizes performance, which can lead to better value if managed effectively. Benchmarking against market rates for comparable services would provide further insight, but initial assessment suggests fair pricing for the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for essential services. The multiple bids received indicate that the government likely secured a fair market price.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various components requiring robust enterprise infrastructure services. The contract delivers essential application support and enterprise infrastructure services, crucial for the operational readiness of military and civilian personnel. The geographic impact is primarily within the United States, supporting DoD operations. The contract supports a workforce skilled in engineering and IT services, contributing to the federal IT and engineering labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not closely monitored.
The duration of the contract (over two years) requires ongoing vigilance to ensure continued value and performance.
Reliance on a single contractor for critical infrastructure services can pose a risk if performance degrades.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The contract type incentivizes performance through award fees, potentially leading to higher quality service.
The contractor, VIATECH, INC., has experience in government contracting, implying familiarity with requirements.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting IT infrastructure for the Department of Defense. The market for IT infrastructure and engineering services is substantial, with significant government spending allocated to maintaining and upgrading these systems. Comparable spending benchmarks would involve analyzing other DoD contracts for similar enterprise-level IT support and infrastructure management.

Small Business Impact

There is no indication that this contract included a small business set-aside. Consequently, the primary contractor, VIATECH, INC., is likely responsible for managing subcontracting opportunities. The extent to which small businesses will participate depends on VIATECH's subcontracting plan and the nature of the services required.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the CECOM LCMC Software Engineering Center. Accountability measures are embedded within the Cost Plus Award Fee structure, which links contractor payment to performance metrics. Transparency is generally maintained through contract reporting mechanisms, though specific details of award fee determinations may be internal.

Related Government Programs

DoD Enterprise IT Services
Software Engineering Support Contracts
Infrastructure Modernization Programs
Defense Information Systems Agency (DISA) Contracts

Risk Flags

Contract type (CPAF) requires diligent oversight to manage costs and performance.
Long contract duration necessitates sustained monitoring for value and effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.3 million to VIATECH, INC.. CECOM LIFE CYCLE MANAGEMENT COMMAND SOFTWARE ENGINEERING CENTER S3 DIRECTORATE APPLICATION SUPPORT DIVISION ENTERPRISE INFRASTRUCTURE SERVICES

Who is the contractor on this award?

The obligated recipient is VIATECH, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $18.3 million.

What is the period of performance?

Start: 2011-09-15. End: 2014-03-28.

What is VIATECH, INC.'s track record with the Department of Defense?

VIATECH, INC. has a history of performing contracts with the Department of Defense, including services related to IT, engineering, and support functions. Analyzing their past performance ratings, any contract modifications, and the types of services previously rendered to DoD agencies would provide a clearer picture of their reliability and capability. Specific details on past contract values and durations would also be relevant for assessing their experience level with large-scale government projects.

How does the $18.3 million value compare to similar enterprise infrastructure contracts?

The $18.3 million contract value for enterprise infrastructure services awarded to VIATECH, INC. appears to be within a reasonable range for a contract of this duration (925 days) and scope, particularly within the Department of Defense. Benchmarking against similar contracts for IT infrastructure support, application services, and engineering functions awarded by DoD or other federal agencies over the past few years would be necessary for a precise comparison. Factors such as the specific technologies supported, the level of security required, and the geographic scope of services can influence pricing, making direct comparisons challenging without detailed context.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract include potential for cost growth if the base cost is not well-defined or if the contractor's costs exceed projections. Additionally, the 'award fee' component requires robust government oversight to ensure that the awarded fees are justified by actual performance. If the government's evaluation criteria are subjective or poorly defined, it can lead to disputes or dissatisfaction. Conversely, if the award fee structure is well-designed and effectively managed, it can incentivize high performance and deliver excellent value.

How effective is full and open competition in ensuring competitive pricing for IT services?

Full and open competition is generally considered the most effective method for ensuring competitive pricing for IT services. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive proposals. This process drives down prices as contractors vie for the contract. The presence of multiple bidders, as seen in this case with 3 bidders, further validates the competitive nature of the procurement and suggests that the government likely obtained a fair market price for the services rendered.

What is the historical spending trend for similar enterprise infrastructure services within the DoD?

Historical spending trends for similar enterprise infrastructure services within the DoD indicate a consistent and significant investment in maintaining and upgrading its complex IT systems. Agencies like CECOM LCMC are continuously procuring services for application support, network management, cybersecurity, and overall infrastructure resilience. Spending in this category often fluctuates based on modernization initiatives, threat landscapes, and budget allocations. Analyzing multi-year spending data for comparable contracts can reveal patterns of increasing or decreasing investment, potential consolidation of services, or shifts towards specific technological solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: D & S Consultants Inc. (UEI: 792244097)

Address: 615 HOPE RD STE 3A, EATONTOWN, NJ, 07724

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,441,635

Exercised Options: $18,441,635

Current Obligation: $18,310,507

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DE407

IDV Type: IDC

Timeline