DoD's $20M IT services contract awarded to Artel, Inc. shows fair value but limited competition

Contract Overview

Contract Amount: $20,032,472 ($20.0M)

Contractor: Artel, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-01-25

End Date: 2010-05-11

Contract Duration: 837 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SERVICES, NON-PERSONAL

Place of Performance

Location: CHAMBERSBURG, FRANKLIN County, PENNSYLVANIA, 17201

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $20.0 million to ARTEL, INC. for work described as: SERVICES, NON-PERSONAL Key points: 1. Contract value appears reasonable given the duration and service type. 2. Limited competition suggests potential for higher pricing than a more open market. 3. Contractor has a track record with the DoD, indicating some level of established performance. 4. The 'Other Computer Related Services' category is broad, making direct benchmarking difficult. 5. Time and Materials pricing structure can pose cost control challenges. 6. Geographic focus on Pennsylvania may limit broader economic impact.

Value Assessment

Rating: fair

The contract's total value of approximately $20 million over roughly 2.7 years suggests an average annual spend of around $7.4 million. This figure appears within a reasonable range for IT services of this nature, particularly given the 'Other Computer Related Services' classification which can encompass a wide array of tasks. However, without specific details on the services rendered, a precise value-for-money assessment is challenging. Benchmarking against similar contracts is difficult due to the broad NAICS code and lack of detailed service descriptions.

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 theoretically allowed to submit proposals. However, the data does not specify the number of bids received. A full and open competition is generally preferred as it maximizes the pool of potential offerors and is intended to drive down prices through market forces. The absence of specific details on bidder count leaves room for inquiry into the actual level of engagement.

Taxpayer Impact: A full and open competition, when robustly participated in, is beneficial for taxpayers by fostering a competitive environment that should lead to more favorable pricing and innovative solutions.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who receive essential IT support. Services delivered likely include IT infrastructure maintenance, network support, and potentially software development or technical assistance. The geographic impact is concentrated in Pennsylvania, where the contractor is based or where services are primarily rendered. Workforce implications include employment opportunities for IT professionals within Artel, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored, as it incentivizes labor hours rather than fixed outcomes.
The broad 'Other Computer Related Services' NAICS code makes it difficult to ascertain the exact nature and efficiency of the services provided.
Limited public information on the number of bidders in this 'full and open' competition raises questions about the true extent of market engagement.

Positive Signals

Awarded through full and open competition, suggesting an effort to leverage market capabilities.
Contractor Artel, Inc. has secured federal contracts previously, indicating a level of experience and capability.
The contract duration of over two years provides a degree of stability for service delivery.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under 'Other Computer Related Services.' The IT services market for the federal government is substantial, with agencies constantly seeking support for their complex digital infrastructures. Contracts like this are crucial for maintaining operational readiness and modernizing systems. Benchmarking spending in this sub-sector is challenging due to the heterogeneity of services classified under NAICS 541519, but overall federal IT spending is in the hundreds of billions annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). This means that both large and small businesses were eligible to compete. While there is no explicit small business set-aside, there is no information provided regarding subcontracting plans or actual subcontracting to small businesses. The impact on the small business ecosystem is therefore neutral to unknown without further data on subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of Defense, specifically the Defense Information Systems Agency (DISA). Accountability measures are inherent in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Systems Agency IT Support Contracts
Department of Defense IT Services
Federal IT Services Procurement
Time and Materials IT Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Lack of specific service details hinders thorough value assessment.
Ambiguity regarding the actual level of competition despite 'full and open' designation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.0 million to ARTEL, INC.. SERVICES, NON-PERSONAL

Who is the contractor on this award?

The obligated recipient is ARTEL, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2008-01-25. End: 2010-05-11.

What specific services were provided under this 'Other Computer Related Services' contract?

The provided data classifies the services under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support, including but not limited to network administration, system maintenance, IT consulting, help desk support, and potentially specialized software or hardware services. Without access to the contract's Statement of Work (SOW) or detailed performance reports, the precise nature of the services rendered by Artel, Inc. remains unspecified. This lack of specificity makes it challenging to evaluate the efficiency and effectiveness of the services delivered or to compare them directly with other IT service contracts.

How many bids were actually received for this 'full and open competition' award?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' (ct: FULL AND OPEN COMPETITION). However, the specific number of bids received is not provided in the abbreviated data. While 'full and open' theoretically allows all responsible sources to compete, the actual level of competition is determined by the number of proposals submitted. A low number of bids, even in a full and open solicitation, can suggest potential issues such as overly restrictive requirements, insufficient outreach, or a lack of market interest. Further investigation into the solicitation details would be needed to determine the number of bidders and assess the robustness of the competition.

What is the historical spending pattern for similar IT services by the Defense Information Systems Agency?

The Defense Information Systems Agency (DISA) is a major procurer of IT services, consistently awarding billions of dollars annually across various categories. Historically, DISA has relied heavily on large, complex IT contracts to support its mission-critical infrastructure and systems. Spending patterns often reflect evolving technological needs, cybersecurity requirements, and shifts towards cloud computing and managed services. While this specific $20 million contract represents a modest portion of DISA's overall IT budget, it aligns with a broader trend of agencies outsourcing IT functions to specialized contractors to leverage expertise and manage costs. Analyzing DISA's historical spending on NAICS 541519 or similar service codes would reveal trends in contract values, durations, and types of services procured.

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

The Time and Materials (T&M) pricing structure, used in this contract (pt: TIME AND MATERIALS), carries inherent risks for the government. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. The primary risk is that the contractor may have less incentive to control costs or complete the work efficiently, as their profit is directly tied to the hours worked and materials used. This can lead to cost overruns if not meticulously monitored through strong government oversight, detailed reporting requirements, and vigilant contract management to ensure that labor hours and materials are reasonable and necessary for the work performed.

How does Artel, Inc.'s performance on this contract compare to industry benchmarks for IT services?

Evaluating Artel, Inc.'s performance against industry benchmarks for this specific contract is challenging with the provided data. The contract's classification under 'Other Computer Related Services' (NAICS 541519) is very broad, making direct comparisons difficult. Performance metrics would typically include factors like on-time delivery, quality of service, adherence to budget (especially relevant for T&M), and customer satisfaction. Without access to performance reports, award fees, or specific Key Performance Indicators (KPIs) associated with this contract, a quantitative assessment of Artel, Inc.'s performance relative to industry standards is not feasible. General contractor performance databases might offer insights if Artel, Inc. has a broader federal contracting history.

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: ONLY ONE SOURCE

Solicitation ID: HC102800R5003

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Address: 60421, CAMBRIDGE, OH, 12

Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Woman Owned Business

Financial Breakdown

Contract Ceiling: $31,152,850

Exercised Options: $31,152,850

Current Obligation: $20,032,472

Parent Contract

Parent Award PIID: DCA20000D5012

IDV Type: IDC

Timeline