DOJ's $24.3M IT Security Contract Awarded to ASRC Federal Data Networx Raises Value Questions

Contract Overview

Contract Amount: $24,334,152 ($24.3M)

Contractor: Asrc Federal Data Networx, LLC

Awarding Agency: Department of Justice

Start Date: 2020-08-24

End Date: 2024-08-23

Contract Duration: 1,460 days

Daily Burn Rate: $16.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: INFORMATION TECHNOLOGY SECURITY SUPPORT SERVICES

Place of Performance

Location: BELTSVILLE, PRINCE GEORGES County, MARYLAND, 20705

State: Maryland Government Spending

Plain-Language Summary

Department of Justice obligated $24.3 million to ASRC FEDERAL DATA NETWORX, LLC for work described as: INFORMATION TECHNOLOGY SECURITY SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The 'not available for competition' designation warrants scrutiny regarding the justification for avoiding a competitive process. 3. Time and Materials contract type can lead to cost overruns if not closely managed. 4. The contract duration of 1460 days (4 years) suggests a significant, long-term need for these services. 5. The specific North American Industry Classification System (NAICS) code 541519 indicates a broad range of computer-related services, requiring clarity on the exact scope. 6. The contract's value of over $24 million over four years necessitates a thorough benchmark against similar IT security support services.

Value Assessment

Rating: questionable

Benchmarking the value of this $24.3 million contract is challenging without detailed service descriptions and performance metrics. However, the sole-source award and Time and Materials pricing structure raise concerns about potential overpayment. Comparing this to competitively bid IT security contracts of similar scope and duration would be crucial to assess if the government received fair market value. The lack of competition inherently limits the government's ability to negotiate the most favorable terms and pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' designation, indicating that a full and open competitive process was not utilized. The specific reasons for this sole-source award are not detailed in the provided data. A sole-source award means only one bidder was considered, which significantly reduces the potential for price negotiation and innovation that typically arises from multiple bids.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the competitive pressure that drives down prices. This limits the government's leverage in securing the best possible value for public funds.

Public Impact

The Department of Justice benefits from enhanced IT security support, crucial for protecting sensitive law enforcement and citizen data. The contract ensures the continuity of essential IT security services for the Office of Justice Programs. The geographic impact is primarily within Maryland, where the contractor is located, but the services support national-level IT infrastructure. Workforce implications include the employment of IT security professionals by ASRC Federal Data Networx to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Time and Materials contract type carries inherent risks of cost escalation if not rigorously managed.
Lack of transparency in the justification for 'not available for competition' designation.
Broad NAICS code may obscure the specific services rendered, making performance evaluation more difficult.
Contract duration of four years may lock the government into a potentially suboptimal solution if market conditions or needs change.

Positive Signals

ASRC Federal Data Networx is a known entity in the federal contracting space, suggesting some level of established capability.
The contract addresses a critical need for IT security, essential for government operations and data protection.
The contract is managed by the Office of Justice Programs, a significant component of the Department of Justice, implying a focus on critical national security and law enforcement functions.

Sector Analysis

The IT security services sector is a rapidly growing and critical component of the federal technology landscape. Spending in this area has surged due to increasing cyber threats. This contract falls under the broader IT services category, specifically focusing on security support. Comparable spending benchmarks for IT security support services can vary widely based on scope, complexity, and the specific technologies employed. However, contracts of this magnitude typically involve comprehensive protection measures for sensitive government networks and data.

Small Business Impact

The provided data indicates that this contract was not awarded as a small business set-aside (ss=false) and there is no indication of small business subcontracting requirements (sb=false). This suggests that the primary contractor, ASRC Federal Data Networx, is likely a large business, and the contract does not appear to have specific provisions to benefit small businesses directly through set-asides or mandated subcontracting. This could mean limited opportunities for small businesses to participate in this specific contract's value chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's contracting officers and program managers within the Office of Justice Programs. The contract type (Time and Materials) necessitates close monitoring of labor hours and material costs to prevent overruns. Transparency is limited by 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
Office of Justice Programs IT Support
Sole-Source IT Contracts
Time and Materials IT Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of defined competition
Broad NAICS code without specific service details

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $24.3 million to ASRC FEDERAL DATA NETWORX, LLC. INFORMATION TECHNOLOGY SECURITY SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is ASRC FEDERAL DATA NETWORX, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Office of Justice Programs).

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2020-08-24. End: 2024-08-23.

What is the specific justification for awarding this IT security support contract on a sole-source basis to ASRC Federal Data Networx?

The provided data indicates the contract was awarded under a 'not available for competition' (CT: NOT AVAILABLE FOR COMPETITION) designation. This typically means that the agency determined, for specific reasons such as unique capabilities, urgent needs, or lack of other qualified sources, that a full and open competition was not feasible or appropriate. Without further documentation from the Department of Justice, the precise justification remains undisclosed in this dataset. Agencies must generally publish justifications for sole-source awards, outlining the rationale and demonstrating why competition was not pursued. This lack of transparency can be a concern for ensuring taxpayer value and fair market access for other potential vendors.

How does the Time and Materials (T&M) pricing structure for this contract compare to fixed-price or cost-plus-fixed-fee contracts for similar IT security services?

Time and Materials (T&M) contracts, like the one awarded to ASRC Federal Data Networx, offer flexibility but carry a higher risk of cost overruns compared to fixed-price contracts. In a T&M arrangement, the government pays for the direct labor hours at specified hourly rates and for the actual cost of materials. This can be advantageous when the scope of work is not well-defined or is expected to change frequently. However, it places a significant burden on the government to closely monitor contractor performance and costs to ensure efficiency and prevent inflated billing. Fixed-price contracts, conversely, offer greater cost certainty for the government but require a well-defined scope of work upfront. Cost-plus-fixed-fee contracts provide a baseline for costs and add a predetermined fee, offering a balance but still requiring careful oversight. For IT security services, where requirements can evolve, T&M might be chosen for its adaptability, but it necessitates robust government oversight to achieve value comparable to competitively bid fixed-price arrangements.

What specific IT security services are included under NAICS code 541519 for this contract, and how are they measured for performance?

NAICS code 541519, 'Other Computer Related Services,' is a broad category that can encompass a wide array of IT functions beyond core software development or hardware installation. For this contract, it likely includes services such as IT system security, network security monitoring, vulnerability assessments, penetration testing, incident response, security policy development, and potentially cybersecurity training. The specific performance metrics would be detailed in the contract's Statement of Work (SOW) and Quality Assurance Surveillance Plan (QASP). These metrics could include response times for security incidents, the number of vulnerabilities identified and remediated, the success rate of security audits, and adherence to service level agreements (SLAs). Without access to the SOW and QASP, a precise understanding of the services and their performance measurement is not possible from the provided data.

What is the historical spending pattern for IT security support services within the Department of Justice, and how does this contract compare?

Historical spending on IT security support services within the Department of Justice (DOJ) has generally trended upwards, reflecting the increasing sophistication of cyber threats and the growing reliance on digital infrastructure. The DOJ, managing vast amounts of sensitive data, consistently invests in cybersecurity. This $24.3 million contract, spanning four years, represents a significant, albeit not unprecedented, investment. To provide a precise comparison, one would need to analyze the DOJ's budget allocations and contract awards for IT security over the past several fiscal years, looking at the average contract value, duration, and the types of services procured. This contract's value appears to be within the range of major IT security support efforts for large federal agencies, but its sole-source nature and T&M structure warrant closer scrutiny against competitively procured, fixed-price contracts that might offer better value.

What are the potential risks associated with a four-year Time and Materials contract for IT security services, particularly given its sole-source nature?

The primary risks associated with a four-year Time and Materials (T&M) contract, especially when awarded sole-source, are cost escalation and a potential lack of incentive for efficiency. With T&M, the contractor is paid for the time and materials used, which can lead to higher overall costs if not meticulously managed and monitored by the government. The four-year duration amplifies this risk, as inefficiencies or scope creep can accumulate over an extended period. The sole-source aspect exacerbates these risks by removing the competitive pressure that typically drives down prices and encourages innovation. Without multiple bidders vying for the contract, the government has less leverage to negotiate favorable rates and terms. Furthermore, the long duration might mean the government is locked into a specific technological approach or service provider, potentially missing out on more advanced or cost-effective solutions that emerge in the market over the four years. Robust government oversight, clear performance metrics, and strict cost controls are essential to mitigate these risks.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation

Address: 7000 MUIRKIRK MEADOWS DR, BELTSVILLE, MD, 20705

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,999,999

Exercised Options: $24,999,999

Current Obligation: $24,334,152

Actual Outlays: $20,006,473

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $9,072,980

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline