DoD's $33.6M storage solution contract with VION CORPORATION shows fair value but limited competition

Contract Overview

Contract Amount: $33,658,991 ($33.7M)

Contractor: Vion Corporation

Awarding Agency: Department of Defense

Start Date: 2016-02-08

End Date: 2016-08-07

Contract Duration: 181 days

Daily Burn Rate: $186.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF 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 $33.7 million to VION CORPORATION for work described as: IGF::CL::IGF ESS BASIC STORAGE SOLUTION SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar IT service contracts. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration was relatively short, suggesting a need for ongoing solutions. 5. This contract falls within the broader IT services sector, supporting critical defense infrastructure. 6. The award was made to a single vendor, indicating potential market concentration.

Value Assessment

Rating: fair

The contract's total value of $33.6 million for storage solution services appears to be within a reasonable range when compared to similar IT service contracts awarded by the Department of Defense. The fixed-price nature of the contract provides cost certainty. However, the lack of robust competition limits the ability to definitively assess if the absolute best value was achieved for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for market fairness. However, the data indicates only three bids were received, suggesting that while the process was open, the level of active participation was not extensive. This limited number of bidders may have restricted the range of pricing and innovation presented to the agency.

Taxpayer Impact: While the competition was open, the low number of bids means taxpayers may not have benefited from the most aggressive pricing that a larger pool of competitors could have offered.

Public Impact

The Department of Defense benefits from enhanced data storage capabilities. Essential IT infrastructure support is provided to the Defense Information Systems Agency. The services are delivered within the District of Columbia. The contract supports the broader mission of national defense through reliable IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders may have reduced competitive pressure on pricing.
Short contract duration might necessitate future procurements with associated administrative costs.

Positive Signals

Awarded under full and open competition, adhering to procurement regulations.
Fixed-price contract type offers cost predictability and limits government financial risk.
Contract supports critical defense IT infrastructure.

Sector Analysis

This contract for storage solution services falls under the Information Technology (IT) sector, specifically within the 'Other Computer Related Services' NAICS code. The IT services market for the federal government is substantial, with agencies continually investing in data storage, cloud solutions, and cybersecurity. This contract represents a component of the DoD's ongoing efforts to maintain and upgrade its vast IT infrastructure, ensuring data availability and operational efficiency.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it mention subcontracting goals. Given the nature of the service (IT storage solutions), it is possible that larger, more specialized firms were the primary participants. Further analysis would be needed to determine if small businesses had opportunities to participate either as prime contractors or subcontractors.

Oversight & Accountability

The contract was awarded under a full and open competition, suggesting adherence to standard federal procurement processes. Oversight would typically be managed by the contracting officer at the Defense Information Systems Agency. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DoD IT Infrastructure Modernization Programs
Defense Information Systems Agency (DISA) IT Services
Federal Data Storage Solutions Contracts
General Services Administration (GSA) IT Schedule Contracts

Risk Flags

Limited competition may have impacted price optimization.
Short contract duration requires ongoing procurement efforts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.7 million to VION CORPORATION. IGF::CL::IGF 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 $33.7 million.

What is the period of performance?

Start: 2016-02-08. End: 2016-08-07.

What is the track record of VION CORPORATION in securing federal contracts, particularly for IT services?

VION CORPORATION has a history of securing federal contracts, primarily within the IT services domain. Analysis of federal procurement data reveals multiple awards to VION CORPORATION across various agencies, including the Department of Defense. These contracts often pertain to IT support, hardware, and software solutions. While the volume of contracts indicates established relationships and capabilities, a deeper dive into past performance reviews and any reported issues on previous awards would be necessary to fully assess their track record. The specific nature and scale of past contracts can provide context for their ability to handle the requirements of this $33.6 million storage solution services contract.

How does the awarded price compare to market rates for similar storage solution services?

Benchmarking the exact price against current market rates for 'Other Computer Related Services' is challenging without more granular data on the specific technologies and service levels required. However, the contract's total value of $33.6 million over its duration suggests a significant investment. Given that it was a fixed-price contract awarded under full and open competition, the price is presumed to be fair and reasonable by the contracting officer. Comparing it to similar DoD contracts for enterprise storage solutions awarded around the same period, considering factors like capacity, performance, and support, would provide a more precise value assessment. The limited number of bidders, however, introduces some uncertainty regarding whether the absolute lowest market price was achieved.

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

Key risks associated with this contract include potential vendor lock-in due to specialized storage solutions, performance issues not meeting DoD requirements, and the possibility of the limited competition leading to suboptimal pricing. Mitigation strategies likely included a well-defined Statement of Work (SOW) specifying performance metrics, the use of a fixed-price contract type to cap government liability, and the requirement for VION CORPORATION to meet specific technical standards. The short duration of the contract (181 days) also mitigates long-term risks associated with vendor performance or technological obsolescence. However, the risk of not achieving the best possible price due to limited competition remains a consideration.

How effective has VION CORPORATION been in delivering on similar IT service contracts for the federal government?

Assessing the overall effectiveness of VION CORPORATION requires a review of their past performance on federal contracts. While the award of this $33.6 million contract suggests they met the agency's criteria, specific performance metrics and feedback from previous engagements are crucial. Federal contract databases often contain past performance information, including ratings and any documented issues. Without access to this detailed performance history, it's difficult to definitively state their effectiveness. However, agencies typically award contracts to vendors with a demonstrated ability to meet requirements, implying a baseline level of expected effectiveness.

What are the historical spending patterns for similar IT storage solutions within the Department of Defense?

The Department of Defense is a significant spender on IT infrastructure, including data storage solutions. Historical spending patterns show a consistent and substantial investment in enterprise storage, cloud storage, and related services to manage vast amounts of data critical for national security. Spending fluctuates based on modernization initiatives, technological advancements (e.g., shift to cloud), and specific operational needs. Contracts for storage solutions can range from millions to billions of dollars annually, often awarded through various procurement vehicles like GSA schedules or direct solicitations. This $33.6 million contract represents a specific procurement within this larger, ongoing spending trend.

What is the significance of the 'Other Computer Related Services' NAICS code in the context of federal IT spending?

The 'Other Computer Related Services' (NAICS 541519) code is a broad category encompassing a wide array of IT services not specifically classified under other codes, such as custom programming or IT management consulting. Its significance lies in its flexibility, allowing agencies to procure diverse IT support functions. For federal IT spending, this code is frequently used for specialized services like data recovery, IT support, network configuration, and, as in this case, specific hardware-related IT services like storage solutions. Its broad nature means spending under this code can be substantial and varied, reflecting the dynamic needs of federal agencies for specialized IT expertise and support.

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, 20007

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

Financial Breakdown

Contract Ceiling: $33,658,991

Exercised Options: $33,658,991

Current Obligation: $33,658,991

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC101307D2009

IDV Type: IDC

Timeline