SYSUSA, INC. awarded $4.87M for IT services, with limited competition and a firm-fixed-price structure

Contract Overview

Contract Amount: $4,868,416 ($4.9M)

Contractor: Sysusa, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2023-03-09

End Date: 2026-03-11

Contract Duration: 1,098 days

Daily Burn Rate: $4.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICES FOR O&M, UPGRADES, FOUNDATION ADJUSTMENT, UTILITIES AND NEW DEVELOPMENT

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Agriculture obligated $4.9 million to SYSUSA, INC. for work described as: SERVICES FOR O&M, UPGRADES, FOUNDATION ADJUSTMENT, UTILITIES AND NEW DEVELOPMENT Key points: 1. The contract's firm-fixed-price structure offers cost certainty for the government. 2. Limited competition raises questions about potential price overpayment and optimal value. 3. The duration of 1098 days suggests a need for sustained IT support. 4. The contract is categorized under 'Other Computer Related Services,' indicating a broad scope. 5. Performance is located in Virginia, a key tech hub.

Value Assessment

Rating: fair

Benchmarking the value of this $4.87 million contract is challenging without more specific details on the services provided. The firm-fixed-price (FFP) type is generally favorable for cost control. However, the limited competition (sole-source) nature of this award suggests that the government may not have achieved the most competitive pricing possible. Without comparison to similar FFP contracts for comparable IT services, it's difficult to definitively assess if the pricing represents excellent value for money. Further analysis would require understanding the specific deliverables and market rates for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one vendor is capable of providing the required services, or in specific circumstances like urgent needs or follow-on work. The lack of multiple bidders means there was no direct price competition to drive down costs or encourage innovative solutions. This approach can lead to higher prices than would be achieved in a fully competitive environment.

Taxpayer Impact: For taxpayers, sole-source awards mean a reduced likelihood of securing the best possible price. The absence of competition limits the government's leverage to negotiate favorable terms, potentially resulting in higher overall expenditure for the services rendered.

Public Impact

The Department of Agriculture's Office of the Chief Financial Officer is the primary beneficiary, receiving IT services for operations and upgrades. Services include operations and maintenance, upgrades, foundation adjustments, utilities, and new development, supporting critical financial functions. The contract's performance is based in Virginia, potentially impacting the local IT workforce. The duration of the contract suggests a long-term commitment to supporting the agency's IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or offer superior service levels.
The broad service description ('Other Computer Related Services') could lead to scope creep or unforeseen cost increases if not managed tightly.

Positive Signals

Firm-fixed-price contract provides budget certainty for the government.
The contract duration of nearly three years indicates a stable, long-term need for these IT services.
Award to SYSUSA, INC. suggests they possess the necessary qualifications for these specific IT tasks.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically under 'Other Computer Related Services.' The IT services market is highly dynamic and competitive, with numerous firms offering a wide range of solutions. Contracts for IT operations, maintenance, and upgrades are common across federal agencies. The value of this contract, approximately $4.87 million over three years, is moderate within the context of federal IT spending, which can range from small, specialized task orders to multi-billion dollar enterprise-wide solutions. Benchmarking requires comparison to similar service contracts within the federal government and the private sector.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, SYSUSA, INC., will likely perform the majority of the work. The absence of small business participation goals or set-asides means that this contract may not directly contribute to the government's small business contracting goals or foster opportunities within the small business IT ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Office of the Chief Financial Officer, the contracting agency. As a definitive contract with a firm-fixed-price structure, the government's primary oversight will focus on ensuring deliverables meet the contract's specifications and performance standards. Transparency is moderate; while the award is publicly listed, the specific details of the sole-source justification and performance metrics are not readily available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Operations and Maintenance Services
Computer Systems Design Services
IT Infrastructure Upgrades
Software Development Services
Federal IT Modernization Programs

Risk Flags

Sole-source award raises concerns about fair pricing and competition.
Broad service description ('Other Computer Related Services') may lack specificity, increasing risk of scope creep.
Lack of small business subcontracting requirements limits opportunities for smaller firms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $4.9 million to SYSUSA, INC.. SERVICES FOR O&M, UPGRADES, FOUNDATION ADJUSTMENT, UTILITIES AND NEW DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is SYSUSA, INC..

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 $4.9 million.

What is the period of performance?

Start: 2023-03-09. End: 2026-03-11.

What specific IT services are included under 'Other Computer Related Services' for this contract?

The provided data indicates that the services encompass 'SERVICES FOR O&M, UPGRADES, FOUNDATION ADJUSTMENT, UTILITIES AND NEW DEVELOPMENT.' This suggests a comprehensive IT support role for the Department of Agriculture's Office of the Chief Financial Officer. 'O&M' refers to Operations and Maintenance, covering the day-to-day running and upkeep of existing IT systems. 'Upgrades' implies enhancements to current hardware or software. 'Foundation Adjustment' could relate to infrastructure or core system modifications. 'Utilities' might pertain to essential IT services like network connectivity or power management. Finally, 'New Development' indicates the creation of new IT solutions or applications. The exact nature of these services would be detailed in the contract's Statement of Work (SOW).

Why was this contract awarded on a sole-source basis, and what is the justification?

The data explicitly states the contract type as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Without access to the specific justification document (e.g., a Justification and Approval or J&A), the precise reason for this sole-source award remains unknown. Common reasons include proprietary technology, unique capabilities of the contractor, or follow-on work to a previously competed effort where only the original contractor can provide necessary integration or support. The lack of competition means taxpayers may not have received the benefit of competitive pricing.

How does the firm-fixed-price (FFP) contract type impact risk and cost for the government?

A Firm-Fixed-Price (FFP) contract is generally advantageous for the government as it shifts most of the cost risk to the contractor. The price is set at the outset and does not change, regardless of the contractor's actual costs incurred. This provides budget certainty for the government, allowing for predictable financial planning. For the contractor, it incentivizes efficiency and cost control, as any savings achieved below the fixed price contribute directly to their profit. However, if the contractor significantly underestimates costs or encounters unforeseen difficulties, they bear the loss. Conversely, if the initial price was set too high due to lack of competition, the government may overpay.

What is the significance of the contract's duration (1098 days)?

The contract duration of 1098 days, which is approximately three years (366 days per year), indicates a substantial and ongoing need for the specified IT services by the Department of Agriculture's Office of the Chief Financial Officer. Such a long duration suggests that these services are critical to the agency's core functions and are not short-term or project-based. It implies a requirement for sustained support, maintenance, and potentially development of IT systems. For the contractor, it represents a significant revenue stream and a stable engagement. For the government, it signifies a long-term commitment, requiring careful management and oversight throughout the contract period to ensure continued value and performance.

What does the North American Industry Classification System (NAICS) code 541519 suggest about the services?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specifically classified under other codes within the 5415 group (which includes Custom Computer Programming Services, Computer Systems Design Services, and Other Services Related to Computer Facilities Management). This code typically covers services such as IT support, troubleshooting, network management, data processing, disaster recovery services, and IT consulting that doesn't fit into more specific design or programming categories. Given the contract description includes O&M, upgrades, and new development, this code accurately reflects the diverse nature of the IT support being provided to the agency.

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 › IT AND TELECOM - PLATFORM

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

Parent Company: Sysusa Inc.

Address: 8565 SUDLEY RD, MANASSAS, VA, 20110

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Economically Disadvantaged Women Owned Small Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $4,868,416

Exercised Options: $4,868,416

Current Obligation: $4,868,416

Actual Outlays: $4,689,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline