DOJ's $6M Cybersecurity Contract Awarded to NTT DATA Federal Services Without Competition

Contract Overview

Contract Amount: $5,990,354 ($6.0M)

Contractor: NTT Data Federal Services, Inc.

Awarding Agency: Department of Justice

Start Date: 2024-12-06

End Date: 2025-09-05

Contract Duration: 273 days

Daily Burn Rate: $21.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: INFORMATION TECHNOLOGY & SUPPORT SERVICES (IT&SS) - CYBERSECURITY SERVICES SUPPORT (0604) BRIDGE

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $6.0 million to NTT DATA FEDERAL SERVICES, INC. for work described as: INFORMATION TECHNOLOGY & SUPPORT SERVICES (IT&SS) - CYBERSECURITY SERVICES SUPPORT (0604) BRIDGE Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost savings. 2. The contract's value of approximately $6 million for cybersecurity support services is a significant investment. 3. The duration of 273 days suggests a need for immediate and ongoing support. 4. The 'NOT COMPETED' status indicates a lack of broader market engagement for this specific requirement. 5. Focus on cybersecurity services highlights the critical nature of protecting sensitive government data. 6. The award to a single vendor may limit opportunities for emerging or specialized cybersecurity firms. 7. The use of labor hours pricing can sometimes lead to cost overruns if not closely managed.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable bids. However, the price of $5,990,354.11 for approximately 9 months of cybersecurity support services appears substantial. Without competition, it's difficult to ascertain if this represents a fair market price or if taxpayers could have secured better value through a competitive bidding process. The 'labor hours' pricing model also introduces a risk of cost escalation if not meticulously monitored by the agency.

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 a specific vendor possesses unique capabilities or when urgent circumstances preclude a full and open competition. The lack of multiple bidders means there was no direct price comparison or negotiation against market alternatives, potentially impacting the final price achieved.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically driven by competitive bidding. This limits the government's ability to ensure it is receiving the best possible value for its investment.

Public Impact

The primary beneficiary is the Drug Enforcement Administration (DEA) within the Department of Justice, which receives critical cybersecurity support. Services delivered include essential cybersecurity functions to protect sensitive law enforcement and operational data. The geographic impact is primarily within Virginia, where the contract is managed and services are likely delivered. The contract supports specialized IT professionals in the cybersecurity field, contributing to the federal workforce in this domain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Labor hours pricing model introduces potential for cost overruns.
Lack of competition may exclude innovative solutions from smaller businesses.
Contract duration and value warrant close performance monitoring.

Positive Signals

Award to established vendor NTT DATA Federal Services suggests a degree of reliability.
Focus on cybersecurity is crucial for national security and data protection.
Contract provides continuity of essential security services for the DEA.

Sector Analysis

The cybersecurity services market is a rapidly growing and critical sector within the broader IT and professional services industry. Federal spending in this area has seen consistent increases due to rising cyber threats. This contract fits within the IT Professional Services category, specifically focusing on specialized cybersecurity support. Comparable spending benchmarks for similar cybersecurity support contracts can vary widely based on scope, duration, and the specific services required.

Small Business Impact

The contract data indicates that small business participation is not a stated priority, as the 'sb' field is false and the 'ss' field is also false. This sole-source award to NTT DATA Federal Services, a large business, means there are no explicit small business set-aside requirements. Subcontracting opportunities for small businesses are not guaranteed and would depend on NTT DATA's internal subcontracting plans, which are not detailed here. This approach may limit the direct impact on the small business cybersecurity ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's contracting officers and program managers within the Drug Enforcement Administration. Accountability measures would be tied to the performance work statement and delivery of cybersecurity services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Justice IT Services
Federal Cybersecurity Contracts
DEA IT Support
Cybersecurity Services Support
IT Professional Services

Risk Flags

Sole-source award
Lack of competition
Labor hours pricing model
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $6.0 million to NTT DATA FEDERAL SERVICES, INC.. INFORMATION TECHNOLOGY & SUPPORT SERVICES (IT&SS) - CYBERSECURITY SERVICES SUPPORT (0604) BRIDGE

Who is the contractor on this award?

The obligated recipient is NTT DATA FEDERAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (Drug Enforcement Administration).

What is the total obligated amount?

The obligated amount is $6.0 million.

What is the period of performance?

Start: 2024-12-06. End: 2025-09-05.

What is NTT DATA Federal Services' track record with the Department of Justice and similar cybersecurity contracts?

NTT DATA Federal Services has a history of performing IT and professional services for various federal agencies, including the Department of Justice. While specific details on their cybersecurity contract performance for the DEA are not provided in this data snippet, their general experience suggests they are capable of handling complex IT requirements. A deeper dive into their past performance reviews, contract history with the DOJ, and any reported issues or successes on similar cybersecurity engagements would provide a more comprehensive understanding of their reliability and effectiveness in this specific domain. Their ability to secure this sole-source award also implies a pre-existing relationship or recognized capability relevant to the DEA's needs.

How does the $6 million contract value compare to similar cybersecurity support contracts awarded by federal agencies?

The $6 million contract value for approximately 9 months of cybersecurity support services is a significant sum, but its comparability to other federal contracts depends heavily on the specific scope of work, the level of expertise required, and the threat landscape addressed. Cybersecurity needs can range from basic network monitoring to advanced threat hunting and incident response. Without a detailed statement of work, it's difficult to benchmark precisely. However, federal spending on cybersecurity has been increasing, with many large contracts in the tens or hundreds of millions of dollars for comprehensive solutions. This $6 million award likely represents a focused set of services or a bridge contract, rather than an agency-wide cybersecurity overhaul.

What are the primary risks associated with awarding a cybersecurity contract on a sole-source basis?

The primary risks associated with sole-source awards, particularly for critical services like cybersecurity, include potential overpayment due to lack of competitive pricing, limited access to innovative solutions that might be offered by other vendors, and a reduced incentive for the awarded contractor to maintain peak performance and cost-efficiency. For cybersecurity, there's also the risk that the chosen vendor may not have the most cutting-edge capabilities compared to a broader market. Furthermore, a sole-source award can create vendor lock-in, making it difficult to switch providers even if performance issues arise or better alternatives become available. The government misses out on the discovery process inherent in competition, which often reveals better value and more suitable technical approaches.

What is the expected effectiveness of these cybersecurity services in protecting DEA data?

The expected effectiveness of these cybersecurity services hinges on the specific tasks outlined in the contract's Statement of Work (SOW) and the contractor's execution. Assuming the contract covers essential functions such as threat detection, vulnerability management, incident response, and security monitoring, these services are crucial for protecting the DEA's sensitive data. The DEA handles vast amounts of critical information related to national security and law enforcement operations. Therefore, robust cybersecurity is paramount. The effectiveness will be measured by the contractor's ability to prevent breaches, minimize the impact of any security incidents, and maintain the integrity and availability of the DEA's digital assets throughout the contract period.

What are the historical spending patterns for cybersecurity support services at the DEA or DOJ?

Historical spending patterns for cybersecurity support services at the DEA or DOJ are not detailed in the provided data. However, federal agencies, including law enforcement and justice departments, have consistently increased their cybersecurity budgets over the past decade due to the escalating threat landscape. This trend is driven by the need to protect sensitive citizen data, classified information, and critical infrastructure from cyberattacks. Analyzing past contracts, including their values, durations, and whether they were competed or sole-sourced, would reveal trends in how the DEA and DOJ have approached cybersecurity procurement and the evolution of their spending in this vital area.

What are the implications of using a 'labor hours' contract type for cybersecurity services?

Using a 'labor hours' contract type for cybersecurity services means the government pays for the direct labor hours expended by the contractor at specified fixed hourly rates. This type of contract is often used when the scope of work is not clearly defined or is expected to change, as is common in IT and cybersecurity projects. The primary implication is that the total cost is not fixed upfront and depends on the actual hours worked. This necessitates close monitoring by the government to ensure efficient use of labor and prevent cost overruns. While it offers flexibility, it shifts the cost risk to the government if not managed diligently. For cybersecurity, it can be effective for ongoing support or evolving threat response, but requires robust oversight to ensure value for money.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nippon Telegraph and Telephone Corporation

Address: 2551 DULLES VIEW DRIVE STE 400, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $10,998,230

Exercised Options: $10,273,672

Current Obligation: $5,990,354

Actual Outlays: $5,990,354

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline