Commerce awards $114M contract for patent technical services to LHDTSV LLC under full and open competition

Contract Overview

Contract Amount: $114,390,362 ($114.4M)

Contractor: Lhdtsv LLC

Awarding Agency: Department of Commerce

Start Date: 2021-09-30

End Date: 2026-09-29

Contract Duration: 1,825 days

Daily Burn Rate: $62.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PATENT TECHNICAL SERVICES COMPETITION FOR A CONTRACT AWARD OF A BASE PERIOD AND 4 OPTIONAL PERIODS.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $114.4 million to LHDTSV LLC for work described as: PATENT TECHNICAL SERVICES COMPETITION FOR A CONTRACT AWARD OF A BASE PERIOD AND 4 OPTIONAL PERIODS. Key points: 1. Contract awarded through full and open competition, suggesting a robust market for these services. 2. The contract's duration of five years (base + 4 option periods) indicates a long-term need for these technical services. 3. The firm-fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 4. The award value of over $114 million signifies a substantial investment in patent technical infrastructure. 5. The North American Industry Classification System (NAICS) code 518210 points to a market focused on data processing and hosting. 6. The contract is managed by the U.S. Patent and Trademark Office, highlighting its importance to intellectual property functions.

Value Assessment

Rating: good

The contract value of $114.4 million over five years averages to approximately $22.88 million annually. Benchmarking this against similar contracts for IT infrastructure and data processing services suggests this is within a reasonable range, especially considering the specialized nature of patent technical services. The firm-fixed-price structure provides cost certainty for the government, although it may not capture potential efficiencies as effectively as other pricing models if the contractor's costs are significantly lower than anticipated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that all responsible sources were permitted to submit offers. The presence of two bidders (no) suggests a competitive environment, though the exact number of proposals received and the evaluation process details would provide a clearer picture of the competition's intensity. A competitive award generally leads to better price discovery and value for the government.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, driving down costs and improving service quality.

Public Impact

The U.S. Patent and Trademark Office (USPTO) is the primary beneficiary, receiving essential technical services to support its operations. The contract directly supports the processing and management of patent applications and related data. The services are critical for maintaining the integrity and efficiency of the U.S. intellectual property system. The geographic impact is national, as the USPTO serves inventors and businesses across the United States. Workforce implications may include the need for specialized IT and data management personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the contractor's proprietary systems become deeply integrated.
Reliance on a single contractor for critical patent infrastructure could pose a risk if performance issues arise.
The firm-fixed-price nature might disincentivize cost-saving innovations by the contractor if not structured with performance incentives.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
The firm-fixed-price contract type provides budget certainty for the government.
The long contract duration suggests a stable and ongoing need, allowing for focused service delivery.
The contract supports a critical government function (USPTO), indicating alignment with national economic interests.

Sector Analysis

The contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services sector (NAICS 518210). This sector is a critical component of the digital economy, providing the backbone for many government and commercial operations. Spending in this area is substantial across federal agencies, supporting everything from cloud services to specialized data analytics. The U.S. Patent and Trademark Office's need for these services is directly tied to managing vast amounts of intellectual property data, making this a specialized but essential application of IT infrastructure.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). The award to LHDTSV LLC, without specific size information provided, suggests it may be a larger entity or a joint venture. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting critical patent infrastructure.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Patent and Trademark Office's contracting and program management officials. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is generally maintained through contract award databases like FPDS. Specific accountability measures would be detailed within the contract terms and conditions, including performance standards and remedies for non-performance. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Infrastructure Services
Data Processing and Hosting
Cloud Computing Services
Government IT Modernization
Intellectual Property Management Systems

Risk Flags

Potential for vendor lock-in
Reliance on single contractor for critical infrastructure
Cybersecurity risks associated with sensitive data

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $114.4 million to LHDTSV LLC. PATENT TECHNICAL SERVICES COMPETITION FOR A CONTRACT AWARD OF A BASE PERIOD AND 4 OPTIONAL PERIODS.

Who is the contractor on this award?

The obligated recipient is LHDTSV 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 $114.4 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-09-29.

What is the track record of LHDTSV LLC in performing similar government contracts?

Information regarding LHDTSV LLC's specific track record with government contracts is not detailed in the provided data. A thorough assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on similar federal awards. Without this, it's difficult to gauge their experience level and reliability for a contract of this magnitude and criticality to the USPTO's operations. Further investigation into contract databases and performance reports would be necessary to establish their past performance context.

How does the awarded value compare to similar contracts for patent technical services?

The provided data does not include specific benchmarks for 'patent technical services' contracts, making a direct comparison difficult. However, the annual value of approximately $22.88 million ($114.4M / 5 years) can be compared to broader IT infrastructure and data processing contracts. Given the specialized nature of supporting the USPTO's unique data and processing requirements, this value appears reasonable. A more precise comparison would necessitate identifying contracts with similar scope, complexity, and service level agreements within federal agencies managing large intellectual property databases or similar technical operations.

What are the key performance indicators (KPIs) and service level agreements (SLAs) for this contract?

The provided summary data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These critical elements would typically be detailed within the contract's Statement of Work (SOW) or Performance Work Statement (PWS). They define the expected performance standards, metrics for success, and remedies for failure. For a contract supporting patent technical services, KPIs might include system uptime, data processing speed, security compliance, and response times for technical support. Understanding these SLAs is crucial for assessing the contractor's performance and the value delivered.

What is the potential impact of this contract on the U.S. intellectual property system's efficiency?

This contract is fundamental to the efficient operation of the U.S. intellectual property system. By providing essential technical services for data processing, hosting, and computing infrastructure, it directly supports the USPTO's ability to manage patent applications, maintain records, and facilitate the examination process. Reliable and high-performing technical services can lead to faster processing times for patent applications, improved accessibility of IP data for the public and businesses, and enhanced security of sensitive information. Conversely, any performance issues could create bottlenecks and delays, negatively impacting inventors and the innovation ecosystem.

Are there any known risks associated with the contractor, LHDTSV LLC, or the nature of these services?

The provided data does not highlight specific risks associated with LHDTSV LLC. However, general risks for a contract of this nature include potential cybersecurity threats targeting sensitive patent data, system outages impacting USPTO operations, and challenges in integrating or maintaining complex technical infrastructure. The firm-fixed-price nature, while offering cost certainty, could also pose a risk if the contractor underperforms or faces unforeseen cost increases they cannot absorb, potentially leading to disputes or service degradation. A comprehensive risk assessment would require deeper due diligence on the contractor's financial stability, past performance, and specific technical capabilities.

How does historical spending on similar services by the USPTO compare to this award?

The provided data does not include historical spending figures for the USPTO on similar patent technical services. To assess this, one would need to analyze past contracts awarded by the USPTO for IT infrastructure, data processing, and related services. Comparing the current $114.4 million award over five years to previous spending patterns would reveal whether this represents an increase, decrease, or stable level of investment. Understanding historical trends is vital for contextualizing the current award and identifying any significant shifts in procurement strategy or market costs.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1333BJ21R00151001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2553 DULLES VIEW DR STE 700, HERNDON, VA, 20171

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, 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: $114,390,362

Exercised Options: $114,390,362

Current Obligation: $114,390,362

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline