DoD's $37.6M ESS Basic Storage Solution Services contract awarded to VION CORPORATION shows potential value concerns

Contract Overview

Contract Amount: $37,575,156 ($37.6M)

Contractor: Vion Corporation

Awarding Agency: Department of Defense

Start Date: 2013-01-25

End Date: 2013-11-15

Contract Duration: 294 days

Daily Burn Rate: $127.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ESS BASIC STORAGE SOLUTION SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20007

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to VION CORPORATION for work described as: ESS BASIC STORAGE SOLUTION SERVICES Key points: 1. The contract's value appears high relative to its duration and scope, warranting further scrutiny. 2. Limited competition dynamics may have influenced pricing, as indicated by the award type. 3. The fixed-price nature of the contract shifts performance risk to the contractor. 4. This contract falls within the broader IT services sector, specifically data storage solutions. 5. The geographic location of performance is concentrated in Washington D.C.

Value Assessment

Rating: fair

The total award amount of $37.6 million for a duration of approximately 10 months suggests a significant monthly expenditure. Benchmarking against similar storage solution contracts, especially those with full and open competition, would be crucial to determine if this represents a fair market price. The fixed-price contract type, while offering cost certainty, can sometimes lead to inflated prices if not adequately negotiated against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the number of bids received (3) is on the lower side for a full and open competition, which could suggest limited market interest or a highly specialized service. This level of competition may not have driven the most aggressive pricing.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the limited number of bidders in this instance might have resulted in a less competitive price than ideal.

Public Impact

The Department of Defense benefits from the provision of essential data storage services. This contract supports the operational needs of defense information systems. The services are delivered within the District of Columbia. The contract likely supports IT professionals and technicians involved in data management and infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpricing due to limited bidder participation in a full and open competition.
The high total value for a relatively short contract duration warrants further investigation into cost-effectiveness.

Positive Signals

Awarded under full and open competition, suggesting an attempt to maximize the bidder pool.
The firm fixed-price contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on data storage solutions. The market for enterprise storage solutions is competitive, with numerous vendors offering hardware, software, and services. Spending in this area is critical for government agencies to manage vast amounts of data securely and efficiently. Comparable spending benchmarks would typically involve analyzing the cost per terabyte or per user for similar storage services across federal agencies.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting goals. The nature of large-scale IT infrastructure services often favors larger, established companies. Further analysis would be needed to determine if any subcontracting opportunities were available to small businesses.

Oversight & Accountability

The contract was awarded by the Defense Information Systems Agency (DISA), an agency with established oversight mechanisms for IT procurements. As a firm fixed-price contract, the primary oversight would focus on delivery and performance against the contract terms. Transparency is generally maintained through federal procurement databases, but detailed performance metrics are often internal.

Related Government Programs

Defense Information Systems Agency IT Services
Department of Defense Cloud Storage Solutions
Federal Data Center Infrastructure Contracts

Risk Flags

Limited number of bidders in full and open competition.
High total contract value for a relatively short duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to VION CORPORATION. ESS BASIC STORAGE SOLUTION SERVICES

Who is the contractor on this award?

The obligated recipient is VION CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $37.6 million.

What is the period of performance?

Start: 2013-01-25. End: 2013-11-15.

What is the track record of VION CORPORATION in delivering similar IT storage solutions to the federal government?

VION CORPORATION has a history of federal contracting, primarily within the IT services domain. Analyzing their past performance on contracts of similar scope and value, particularly those involving data storage, is crucial. This includes reviewing past performance evaluations, any contract modifications, and instances of contract disputes or terminations. A review of their contract history with agencies like DISA or other DoD components would provide insight into their reliability and capability in delivering complex IT solutions. Without specific performance data for this ESS Basic Storage Solution Services contract, a general assessment relies on their broader federal contracting history and reputation within the IT services sector.

How does the pricing of this contract compare to similar IT storage solutions procured by the federal government during the same period?

Benchmarking this $37.6 million contract against similar IT storage solutions procured by the federal government between 2013 and 2014 is essential for value assessment. Key metrics for comparison would include cost per terabyte, cost per user, or cost per unit of storage capacity, adjusted for contract duration and service level agreements. Given the award was for 'ESS Basic Storage Solution Services,' understanding the specific technical requirements and service levels is vital. If comparable contracts under full and open competition with a higher number of bidders yielded lower per-unit costs, it would suggest this contract may have been priced unfavorably. Conversely, if the specialized nature of the service or unique requirements justified the cost, it could be considered fair.

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

The primary risks associated with this contract include potential cost overruns if the fixed-price structure did not adequately account for all eventualities, performance failures in delivering the storage solution, and cybersecurity vulnerabilities inherent in data storage. Given it was a firm fixed-price contract, the financial risk of cost overruns is largely borne by VION CORPORATION. Performance risk is mitigated through contract terms, service level agreements (SLAs), and potential penalties for non-compliance. Cybersecurity risk is managed through government-mandated security protocols and compliance requirements. The limited number of bidders (3) in a full and open competition could also indicate a risk of insufficient market competition, potentially leading to suboptimal pricing. Mitigation strategies for this would involve rigorous negotiation and market research prior to award.

What was the overall effectiveness of the competition process for this contract?

The competition process for this contract was characterized as 'full and open,' which theoretically maximizes the pool of potential bidders. However, only three bids were received. The effectiveness of the competition can be debated; while it adhered to the 'full and open' standard, the low number of responsive bids suggests that the market may not have been as robust as anticipated, or that the requirements were highly specific, limiting the number of capable offerors. This limited competition could impact price discovery, potentially leading to a higher-than-optimal price for the government. A more effective competition might have involved five or more bidders, driving prices down further through increased offeror engagement.

How does this contract align with broader Department of Defense IT modernization or data management strategies?

This contract for ESS Basic Storage Solution Services aligns with the Department of Defense's fundamental need for robust and secure data storage capabilities. DoD agencies generate and manage vast quantities of data critical for operations, intelligence, and logistics. Contracts like this support the underlying infrastructure required for data accessibility, integrity, and security. Its alignment with broader strategies would depend on whether it contributes to modernization efforts, such as transitioning to cloud-based solutions, enhancing data analytics capabilities, or improving data lifecycle management. Without specific details on the 'ESS Basic' nature, it's presumed to be a foundational element supporting these larger strategic objectives by ensuring the availability and reliability of essential storage resources.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC101306R2005

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1055 THOMAS JEFFERSON ST NW STE 406, WASHINGTON, DC, 98

Business Categories: Category Business, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $37,575,156

Exercised Options: $37,575,156

Current Obligation: $37,575,156

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101307D2009

IDV Type: IDC

Timeline