USDA awards $25.2M for Network Operations Support, raising questions on competition and value

Contract Overview

Contract Amount: $25,213,346 ($25.2M)

Contractor: Tuknik Government Services LLC

Awarding Agency: Department of Agriculture

Start Date: 2020-08-18

End Date: 2023-10-31

Contract Duration: 1,169 days

Daily Burn Rate: $21.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NETWORK OPERATIONS SUPPORT SERVICES

Place of Performance

Location: FORT COLLINS, LARIMER County, COLORADO, 80526

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $25.2 million to TUKNIK GOVERNMENT SERVICES LLC for work described as: NETWORK OPERATIONS SUPPORT SERVICES Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Firm Fixed Price contract type suggests defined scope, but value needs benchmarking. 3. Duration of 1169 days indicates a long-term need for these services. 4. Contractor has a single award, suggesting limited prior federal experience. 5. Services fall under 'Other Computer Related Services,' a broad category. 6. Geographic location of Colorado may indicate specific operational needs.

Value Assessment

Rating: questionable

The contract's value of $25.2 million over approximately three years for network operations support is difficult to assess without specific performance metrics and benchmarks. Given the lack of competition, it's challenging to determine if this represents a fair market price. Comparing it to similar 'Other Computer Related Services' contracts awarded competitively would be necessary to establish a robust value-for-money assessment. The firm fixed-price nature implies cost certainty for the government, but the absence of competitive bidding prevents a definitive value judgment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source procurement. This means only one vendor was solicited, and the rationale for not opening it to broader competition is not detailed in the provided data. Such awards can limit the government's ability to secure the best possible pricing and innovative solutions that might emerge from a competitive bidding process.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing, as the government did not leverage market competition to drive down costs.

Public Impact

The Department of Agriculture benefits from continuous network operations support. Essential IT infrastructure services are maintained, ensuring operational continuity. The primary impact is on the internal functioning of the USDA's IT systems. Workforce implications are likely limited to the contractor's personnel supporting the network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment.
Limited contractor history makes it difficult to assess past performance reliability.
Broad service category ('Other Computer Related Services') may obscure specific performance issues.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Long contract duration suggests a stable, ongoing need for these critical services.
Award to TUKNIK GOVERNMENT SERVICES LLC fulfills a specific, identified requirement.

Sector Analysis

Network operations support services fall under the broader IT services sector, specifically within IT outsourcing and managed services. This sector is characterized by a wide range of providers, from large system integrators to specialized niche firms. The market size for government IT services is substantial, with agencies increasingly relying on external support for complex infrastructure management. This contract represents a portion of the government's spending on maintaining its digital backbone, comparable to other managed network services contracts across various federal agencies.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). There is no information provided regarding small business subcontracting plans. Therefore, this award does not appear to directly benefit the small business ecosystem through set-asides or prime contracting opportunities.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and the contracting officer (CO) within the Department of Agriculture. The firm fixed-price nature provides some cost control. However, the lack of competition limits the transparency typically afforded by a competitive bidding process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Network Management Services
Computer Systems Design Services
IT Infrastructure Support
Managed Network Services

Risk Flags

Sole-source award
Lack of competitive bidding
Limited contractor performance history available
Broad service category classification

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $25.2 million to TUKNIK GOVERNMENT SERVICES LLC. NETWORK OPERATIONS SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is TUKNIK GOVERNMENT SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $25.2 million.

What is the period of performance?

Start: 2020-08-18. End: 2023-10-31.

What is the specific nature of the 'Network Operations Support Services' provided under this contract?

The provided data classifies these services under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support activities, including network design, implementation, maintenance, and troubleshooting. Without further details from the contract's statement of work (SOW), it's difficult to ascertain the precise functions performed. These could range from managing network hardware and software, ensuring network security, monitoring network performance, to providing help desk support for network-related issues. The 'DEFINITIVE CONTRACT' award type suggests a defined scope, but the specifics remain unclear from the summary data.

How does the $25.2 million contract value compare to similar network operations support contracts within the federal government?

Benchmarking this $25.2 million contract value against similar federal contracts is challenging due to the sole-source award and the broad 'Other Computer Related Services' classification. Competitively awarded contracts for network operations support of similar duration (1169 days) and scope would provide a better comparison point. Typically, larger agencies with extensive networks might award multi-year contracts in the tens or hundreds of millions. However, without knowing the specific deliverables, service levels, and the number of users or sites supported, a direct comparison is speculative. The lack of competition means this price wasn't tested against market alternatives, making value assessment difficult.

What are the potential risks associated with awarding a contract of this size on a sole-source basis?

The primary risk of a sole-source award for a $25.2 million contract is the potential for inflated pricing and reduced innovation. Without competition, the government loses the leverage to negotiate the best possible price and terms. There's also a risk that the chosen contractor may not be the most capable or efficient provider available in the market. Furthermore, sole-source awards can create an appearance of impropriety or favoritism, even if the selection was justified. Ensuring robust oversight and performance management becomes even more critical to mitigate these risks and ensure the government receives adequate value for its investment.

What is the track record of TUKNIK GOVERNMENT SERVICES LLC in providing federal IT services?

The provided data indicates that TUKNIK GOVERNMENT SERVICES LLC has received this single award, valued at $25.2 million, for network operations support. This suggests a limited federal contracting history, at least as the prime contractor for a definitive contract of this magnitude. Without access to a more comprehensive federal procurement database or past performance reviews, it's difficult to assess their broader track record, experience with similar services, or performance on other government contracts. The 'st': 'CO' designation might imply a small business status or specific set-aside, but this contract itself was not a small business set-aside.

How does the 'Firm Fixed Price' contract type influence the risk and value proposition for the government?

A Firm Fixed Price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and unlikely to change significantly. It shifts the risk of cost overruns to the contractor, providing budget certainty for the agency. For this $25.2 million contract, the FFP structure means the government knows the total cost upfront, assuming the contractor meets all performance requirements. The value proposition hinges on whether the fixed price accurately reflects the market rate for the defined services. While FFP offers cost predictability, the lack of competition means this price wasn't necessarily the lowest achievable.

What are the implications of the contract's long duration (1169 days) for the agency and the contractor?

The contract duration of 1169 days (approximately 3 years and 3 months) indicates a long-term, stable requirement for network operations support within the Department of Agriculture. For the agency, this provides continuity of essential IT services, reducing the administrative burden of frequent re-procurement. It allows for deeper integration of the contractor's services into agency operations. For the contractor, TUKNIK GOVERNMENT SERVICES LLC, it offers revenue stability and the opportunity to build expertise specific to the agency's network environment. However, such long durations also necessitate robust performance management to ensure the contractor remains accountable and efficient throughout the contract period.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 502, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,213,346

Exercised Options: $25,213,346

Current Obligation: $25,213,346

Actual Outlays: $25,213,346

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline