Commerce Department's Patent Data Capture contract awarded to Reed Technology for over $177M

Contract Overview

Contract Amount: $177,795,665 ($177.8M)

Contractor: Reed Technology and Information Services LLC

Awarding Agency: Department of Commerce

Start Date: 2018-01-25

End Date: 2021-01-31

Contract Duration: 1,102 days

Daily Burn Rate: $161.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PATENT DATA CAPTURE PREGRANT PUBLICATION (PG PUB) IGF::OT::IGF

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22206

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $177.8 million to REED TECHNOLOGY AND INFORMATION SERVICES LLC for work described as: PATENT DATA CAPTURE PREGRANT PUBLICATION (PG PUB) IGF::OT::IGF Key points: 1. Contract value significantly exceeds initial estimates, raising questions about cost-effectiveness. 2. Sole-source award limits competitive pressure, potentially inflating prices. 3. Long contract duration increases exposure to market shifts and technological obsolescence. 4. Performance context is limited due to lack of competitive bidding. 5. This contract represents a substantial portion of spending within its specific niche. 6. High contract value suggests critical operational reliance on the awarded vendor.

Value Assessment

Rating: questionable

The total award of over $177 million for patent data capture services appears high when compared to similar government contracts for data processing and publishing services. Without competitive bidding, it is difficult to benchmark the pricing effectively. The value proposition for the government is questionable given the lack of price discovery through competition. Further analysis would be needed to determine if the services rendered justify the significant expenditure over the contract's lifespan.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Reed Technology and Information Services LLC, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means that the government did not benefit from the price reductions and service innovations that often arise from a competitive environment.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competition. The government missed an opportunity to secure potentially lower prices and better terms through a competitive solicitation process.

Public Impact

The U.S. Patent and Trademark Office (USPTO) benefits from the continuous capture and processing of patent data. This service supports the USPTO's mission to promote innovation and economic growth by managing intellectual property. The contract ensures the availability of critical data for researchers, businesses, and the public. Workforce implications are likely concentrated within the awarded contractor, Reed Technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to overpayment.
Long contract duration (over 3 years) increases risk of cost escalation and technological irrelevance.
Lack of transparency in the sole-source justification requires scrutiny.
Absence of small business subcontracting goals due to sole-source nature.

Positive Signals

Ensures continuity of critical patent data capture services for the USPTO.
Reed Technology and Information Services LLC has a long-standing relationship with the USPTO for these services.
Firm fixed-price contract provides cost certainty for the government, assuming scope is well-defined.

Sector Analysis

The contract falls within the broader IT services sector, specifically focusing on data management and publishing for intellectual property. The market for such specialized data services can be concentrated, with a few key players possessing the necessary expertise and infrastructure. Comparable spending benchmarks are difficult to establish without more specific details on the scope of data processed and the exact services provided, but the scale of this award suggests it is a significant contract within its niche.

Small Business Impact

As this contract was awarded on a sole-source basis, there were no specific small business set-aside provisions or subcontracting goals mandated. This means that opportunities for small businesses to participate in this specific contract are limited to potential indirect roles or through the prime contractor's own initiatives, which are not contractually required. The absence of a competitive solicitation also means that the government did not leverage this contract to foster small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Patent and Trademark Office contracting officers and program managers. Transparency is limited due to the sole-source nature of the award, making it harder for the public to scrutinize the justification and pricing. Accountability would be managed through performance metrics and delivery schedules outlined in the contract, with potential for Inspector General review if performance issues or allegations of impropriety arise.

Related Government Programs

USPTO IT Modernization Efforts
Federal Data Management Services
Intellectual Property Information Services
Government Publishing Services

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Long contract duration increases risk of technological obsolescence and market shifts.
Lack of publicly available performance data hinders assessment of value for money.
High contract value warrants scrutiny of necessity and efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $177.8 million to REED TECHNOLOGY AND INFORMATION SERVICES LLC. PATENT DATA CAPTURE PREGRANT PUBLICATION (PG PUB) IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is REED TECHNOLOGY AND INFORMATION SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $177.8 million.

What is the period of performance?

Start: 2018-01-25. End: 2021-01-31.

What is the historical spending pattern for patent data capture services at the USPTO?

Historical spending data for patent data capture services at the USPTO prior to this contract would provide crucial context for evaluating the $177 million award. If previous contracts for similar services were significantly lower, it would suggest a substantial increase in costs or scope. Conversely, if past spending was in a similar range, it might indicate a consistent, albeit high, operational cost for these essential functions. Analyzing trends over several years would reveal whether this award represents a one-time surge or a sustained escalation in expenditure for patent data management.

What specific justification was provided for the sole-source award to Reed Technology and Information Services LLC?

The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or the urgency of the requirement where only one vendor can meet the need. For Reed Technology and Information Services LLC, the justification might stem from their established infrastructure, specialized knowledge of the USPTO's legacy systems, or a critical need for uninterrupted service continuity that could not be risked with a new vendor. A detailed review of the Justification for Other than Full and Open Competition (JOFOC) document would reveal the specific rationale provided by the agency and allow for an assessment of its validity.

How does the contract's firm fixed-price (FFP) structure mitigate risks for the government?

A firm fixed-price (FFP) contract structure is designed to provide the government with cost certainty. Under an FFP agreement, the contractor assumes the risk of cost overruns. This means that Reed Technology and Information Services LLC is obligated to perform the work for the agreed-upon price, regardless of their actual costs. This structure is beneficial for the government as it prevents unexpected increases in expenditure, allowing for more predictable budgeting. However, it also means that the government may not benefit from any cost savings the contractor achieves, and the initial price must be carefully negotiated to ensure it represents fair value.

What are the potential risks associated with the long duration of this contract (over 3 years)?

The contract's duration of over three years (1102 days) presents several potential risks. Firstly, technological advancements in data capture, processing, and storage could render the contractor's current methods or systems obsolete before the contract ends, potentially leading to inefficiencies or the need for costly workarounds. Secondly, market conditions and pricing for similar services could change significantly over this period, meaning the government might be locked into a price that becomes uncompetitive. Lastly, a longer contract duration increases the risk of vendor lock-in, making it more difficult and costly to transition to a new provider if performance issues arise or better solutions become available.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract?

While the provided data does not explicitly list performance metrics or KPIs, government contracts of this magnitude and duration typically include them. These metrics would likely focus on the accuracy, timeliness, and completeness of the patent data capture and processing. Examples could include error rates in data entry, turnaround times for processing new patent applications, and system uptime. The effectiveness of the contract's oversight would depend on the clarity and enforceability of these KPIs, and whether they are actively monitored and reported on by the USPTO.

Industry Classification

NAICS: Information › Newspaper, Periodical, Book, and Directory Publishers › All Other Publishers

Product/Service Code: BOOKS, MAPS, OTHER PUBLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lexisnexis Special Services Inc (UEI: 210244596)

Address: 7 WALNUT GROVE DR, HORSHAM, PA, 19044

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $219,495,341

Exercised Options: $178,598,627

Current Obligation: $177,795,665

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DOC50PAPT1500003

IDV Type: IDC

Timeline