DOJ's $3.2M IT services contract awarded to Vertiv Corporation, raising questions about competition and value

Contract Overview

Contract Amount: $3,550,895 ($3.6M)

Contractor: Vertiv Corporation

Awarding Agency: Department of Justice

Start Date: 2024-01-01

End Date: 2026-12-31

Contract Duration: 1,095 days

Daily Burn Rate: $3.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VERTIV

Place of Performance

Location: WESTERVILLE, DELAWARE County, OHIO, 43082

State: Ohio Government Spending

Plain-Language Summary

Department of Justice obligated $3.6 million to VERTIV CORPORATION for work described as: VERTIV Key points: 1. The contract's value of $3.2 million over three years warrants scrutiny for IT services. 2. Awarded as a 'not competed' purchase order, it bypasses standard competitive bidding processes. 3. The lack of competition may lead to inflated pricing and reduced value for taxpayer dollars. 4. Performance context is limited due to the 'not competed' nature, making benchmarking difficult. 5. This contract falls within the 'Other Computer Related Services' NAICS code, a broad category. 6. The firm fixed-price structure offers some cost certainty but doesn't guarantee optimal value without competition.

Value Assessment

Rating: questionable

Benchmarking the value of this $3.2 million IT services contract is challenging due to its 'not competed' status. Without comparison to other bids or market rates for similar services, it's difficult to ascertain if the price is fair. The firm fixed-price nature provides cost predictability, but the absence of competitive pressure raises concerns about whether the government is receiving optimal value for its investment. Further analysis would require understanding the specific services rendered and comparing them to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not competed' basis, indicating a sole-source or limited competition procurement. This means that the Federal Bureau of Investigation did not solicit bids from multiple vendors. The specific justification for this approach is not provided, but it typically occurs when only one vendor can meet the requirement, or in urgent situations. The lack of a competitive process limits price discovery and may result in higher costs.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive bidding. Without multiple offers, there's less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The Federal Bureau of Investigation (FBI) is the primary beneficiary, receiving IT services. The contract supports essential IT infrastructure and services for the agency's operations. Services are likely delivered within Ohio, where the contractor is based. The contract may indirectly support IT professionals through Vertiv Corporation's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and suboptimal service.
The 'not competed' award justification needs further review to ensure necessity.
Limited transparency into the selection process hinders accountability.
Absence of performance metrics makes value assessment difficult.

Positive Signals

Firm fixed-price contract provides budget certainty for the agency.
Vertiv Corporation is a known entity in the IT services sector.
Contract duration of three years allows for stable service delivery.

Sector Analysis

This contract falls under the broad 'Other Computer Related Services' category (NAICS 541519). The IT services market is highly competitive, with numerous vendors offering a wide range of solutions. Government spending in this sector is substantial, often involving complex procurements for hardware, software, and support. Contracts like this, especially when not competed, represent a significant portion of agency IT budgets and highlight the importance of robust procurement practices to ensure value.

Small Business Impact

The data indicates that this contract was not awarded to a small business (sb: false) and does not appear to be a small business set-aside (ss: false). Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award. The focus remains on the prime contractor, Vertiv Corporation, and its ability to deliver services without a mandated small business participation component.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's internal procurement and financial management controls. The Federal Bureau of Investigation is responsible for monitoring contract performance and ensuring compliance with terms. Transparency is limited due to the 'not competed' nature, making external oversight more challenging. There is no specific mention of an Inspector General's direct involvement in this particular award, though the DOJ IG office generally oversees agency spending.

Related Government Programs

IT Professional Services
Computer and Network Support Services
IT Infrastructure Support
Government IT Procurement
Federal IT Services Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency
Unclear Value for Money

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $3.6 million to VERTIV CORPORATION. VERTIV

Who is the contractor on this award?

The obligated recipient is VERTIV CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $3.6 million.

What is the period of performance?

Start: 2024-01-01. End: 2026-12-31.

What specific IT services is Vertiv Corporation providing under this contract?

The provided data classifies this contract under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support, including but not limited to network management, hardware/software maintenance, IT consulting, and system integration. Without further details on the contract's statement of work, it is difficult to pinpoint the exact services. However, given the 'not competed' status, it is possible these services are highly specialized or critical to an existing infrastructure managed by Vertiv, necessitating a sole-source award.

What is the justification for awarding this contract without competition?

The data explicitly states the contract was 'NOT COMPETED.' Federal procurement regulations (like the FAR) allow for non-competitive awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. The Department of Justice, specifically the Federal Bureau of Investigation, would have had to document and justify this decision. Without access to that justification document, the precise reason remains unknown, but it is a key area for scrutiny regarding potential waste or inefficiency.

How does the $3.2 million contract value compare to similar IT services contracts awarded by the government?

Comparing the $3.2 million value requires context regarding the duration and scope of services. This is a three-year contract (1095 days). While $3.2 million over three years ($1.07M annually) is a moderate sum for IT services, its value proposition is questionable without competition. Similar IT support contracts can range from tens of thousands to hundreds of millions of dollars depending on complexity and scale. The lack of competitive bidding prevents a direct benchmark against market rates or other potential offers, making it difficult to assess if this represents good or fair value.

What is Vertiv Corporation's track record with federal IT contracts?

Vertiv Corporation, identified as the contractor, has a history of engaging with the federal government. While this specific data point doesn't detail their entire federal contract history, companies of this nature often hold multiple contracts across various agencies. A deeper dive into federal procurement databases (like FPDS or SAM.gov) would reveal the extent of their past performance, including contract values, agencies served, and performance ratings. This information is crucial for assessing their reliability and capability in fulfilling the FBI's requirements.

What are the potential risks associated with a 'not competed' IT services contract?

The primary risks associated with a 'not competed' IT services contract include higher costs due to the absence of competitive pricing pressure, potential for receiving less-than-optimal services or solutions, and reduced transparency and accountability in the procurement process. It can also signal a lack of strategic planning or market research by the agency. Furthermore, it limits opportunities for other capable vendors, potentially stifling innovation and market competition in the long run. Ensuring the justification for non-competition is sound is paramount to mitigating these risks.

How does this contract fit within the broader landscape of federal IT spending?

Federal IT spending is a massive component of the overall federal budget, often exceeding hundreds of billions of dollars annually. Contracts for IT services, like this one, are fundamental to maintaining and modernizing government technology infrastructure. While this $3.2 million contract is relatively small in the grand scheme of federal IT outlays, its 'not competed' status makes it a focal point for scrutiny. It represents a single instance within a vast ecosystem where agencies procure everything from basic network support to complex cybersecurity solutions.

Industry Classification

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

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 505 N CLEVELAND AVE, WESTERVILLE, OH, 43082

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,550,895

Exercised Options: $3,550,895

Current Obligation: $3,550,895

Actual Outlays: $2,658,344

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline