Commerce awards $21.8M for enterprise operations, with HALVIK, LLC securing the contract

Contract Overview

Contract Amount: $21,798,164 ($21.8M)

Contractor: Halvik, LLC

Awarding Agency: Department of Commerce

Start Date: 2024-02-08

End Date: 2027-01-31

Contract Duration: 1,088 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: IT

Official Description: ENTERPRISE OPERATION SERVICES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $21.8 million to HALVIK, LLC for work described as: ENTERPRISE OPERATION SERVICES Key points: 1. Value for money appears fair, given the scope of enterprise operations support. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, typical for IT service contracts of this duration. 4. Performance context is tied to the U.S. Patent and Trademark Office's operational needs. 5. Sector positioning is within IT services, specifically computer systems design. 6. The contract type, labor hours, suggests flexibility but requires careful monitoring of effort.

Value Assessment

Rating: fair

The contract value of $21.8 million over approximately three years for enterprise operations services is within a reasonable range for a federal agency of this size. Benchmarking against similar IT service contracts for operational support indicates that the pricing structure, based on labor hours, is common. However, without detailed breakdowns of labor categories and rates, a precise value-for-money assessment is challenging. The agency's historical spending on similar services would provide a more robust comparison.

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 while the competition was broad, specific exclusions were applied. The presence of two bidders suggests a degree of competition, but the exact number of proposals received and the nature of the exclusions would provide more insight into the competitive landscape. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The full and open competition, even with exclusions, suggests that taxpayers likely benefited from a competitive bidding process, which should have driven a more reasonable price. However, the specific exclusions could have limited the pool of potential offerors, potentially impacting the ultimate cost savings.

Public Impact

The U.S. Patent and Trademark Office (USPTO) is the primary beneficiary, receiving essential enterprise operations support. Services delivered include computer systems design and related IT support, crucial for the USPTO's mission. The geographic impact is primarily within the USPTO's operational centers, likely concentrated in Virginia. Workforce implications may include the direct employment of personnel by HALVIK, LLC and potential impacts on existing USPTO IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Labor hour contracts can lead to cost overruns if not closely managed and monitored for efficiency.
The 'after exclusion of sources' clause warrants scrutiny to ensure it did not unduly limit competition.
Dependence on a single contractor for critical enterprise operations could pose a risk if performance falters.

Positive Signals

Awarding to HALVIK, LLC, a known entity, suggests a degree of confidence in their capabilities.
The contract's duration provides stability for both the agency and the contractor, allowing for focused execution.
The full and open competition framework, despite exclusions, is a positive signal for market engagement.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services (NAICS 541512). This is a large and competitive market segment within the federal government, encompassing a wide range of IT support, integration, and consulting services. Federal spending in this area is consistently high, driven by the need for agencies to maintain and modernize their technological infrastructure. Comparable spending benchmarks would involve looking at other large IT service contracts awarded to support agency-wide operations.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This means the primary award went to a large business, and opportunities for small businesses would likely be through direct subcontracting by HALVIK, LLC, if they choose to pursue that. The absence of a small business set-aside means direct opportunities for small businesses to compete for this prime contract were limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the U.S. Patent and Trademark Office. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any investigations into fraud, waste, or abuse related to the contract arise.

Related Government Programs

IT Operations and Support Services
Computer Systems Design Services
Enterprise Resource Planning (ERP) Support
Cloud Computing Services
Cybersecurity Services

Risk Flags

Potential for limited competition due to source exclusions.
Risk of cost overruns with labor hour contract type if not managed closely.
Dependence on a single contractor for critical enterprise functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $21.8 million to HALVIK, LLC. ENTERPRISE OPERATION SERVICES

Who is the contractor on this award?

The obligated recipient is HALVIK, 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 $21.8 million.

What is the period of performance?

Start: 2024-02-08. End: 2027-01-31.

What is HALVIK, LLC's track record with federal IT service contracts, particularly those involving enterprise operations?

HALVIK, LLC has a history of performing federal IT service contracts. While specific details on their enterprise operations experience require deeper analysis of past awards, their presence as a contractor suggests they have met federal requirements in the past. Examining their contract history for similar scope, size, and duration, especially within agencies like the USPTO or other large federal entities, would provide a clearer picture of their capabilities and performance trends. Past performance evaluations, if publicly available, would be crucial for assessing their reliability and effectiveness in delivering complex IT solutions.

How does the $21.8 million contract value compare to similar enterprise operations contracts awarded by the USPTO or other agencies?

The $21.8 million contract value for enterprise operations services over approximately three years is a significant but not extraordinary amount for a federal agency like the USPTO. To benchmark effectively, one would compare this to other contracts for similar IT support and systems design services awarded to agencies of comparable size and complexity. For instance, contracts supporting the operational IT needs of other large bureaus within Commerce or similar departments (e.g., Justice, Treasury) could serve as benchmarks. The pricing structure (labor hours) also influences comparison; contracts with fixed-price components or different service scopes would require careful adjustment for a fair comparison.

What are the primary risks associated with this 'Full and Open Competition After Exclusion of Sources' contract type?

The primary risk with 'Full and Open Competition After Exclusion of Sources' lies in the potential for reduced competition, which could lead to higher prices than a truly unrestricted full and open competition. While the intent is to ensure fair opportunity, the specific exclusions might inadvertently limit the pool of qualified and competitive vendors. This could mean that the government does not receive the most innovative solutions or the best possible pricing. It is crucial to understand the justification for these exclusions to ensure they were necessary and did not unduly restrict market participation, thereby potentially impacting value for taxpayers.

How effective is the labor hours contract type for managing enterprise operations compared to fixed-price contracts?

The labor hours contract type offers flexibility, allowing the government to adjust the level of effort and adapt to changing requirements in enterprise operations. This can be advantageous when the exact scope or duration of work is uncertain. However, it carries a higher risk of cost overruns if not meticulously managed, as the contractor is paid for time and materials. Fixed-price contracts provide greater cost certainty but can be less adaptable to evolving needs and may require more upfront definition of scope. For enterprise operations, a hybrid approach or strong oversight with clear task orders under the labor hour structure is often necessary to balance flexibility with cost control.

What is the historical spending trend for enterprise operations services at the U.S. Patent and Trademark Office?

Analyzing historical spending trends for enterprise operations services at the U.S. Patent and Trademark Office (USPTO) is crucial for context. This involves examining past contract awards for similar services, including IT support, systems design, and operational maintenance, over several fiscal years. Understanding whether spending has been increasing, decreasing, or remaining stable can indicate shifts in agency needs, technological adoption, or efficiency initiatives. A consistent or increasing trend might suggest growing reliance on external support, while a decrease could point to internal capacity building or consolidation. This historical data also aids in benchmarking the current $21.8 million award against previous investments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1600 SPRING HILL RD, SUITE 240, VIENNA, VA, 22182

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, 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: $41,836,637

Exercised Options: $21,798,164

Current Obligation: $21,798,164

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $7,810,866

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 1333BJ21D00280002

IDV Type: IDC

Timeline