Zolon Tech Inc. awarded $6M task order for IT services, raising questions on value and competition

Contract Overview

Contract Amount: $6,032,357 ($6.0M)

Contractor: Zolon Tech Inc.

Awarding Agency: Department of Labor

Start Date: 2020-09-30

End Date: 2026-05-31

Contract Duration: 2,069 days

Daily Burn Rate: $2.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: LABOR HOURS

Sector: IT

Official Description: NEW TASK ORDER FOR DATA SERVICES UNDER BPA NUMBER #16O5DC-2O-A-OOO2

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $6.0 million to ZOLON TECH INC. for work described as: NEW TASK ORDER FOR DATA SERVICES UNDER BPA NUMBER #16O5DC-2O-A-OOO2 Key points: 1. The contract's value appears reasonable given the duration and scope of IT services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of nearly 7 years presents potential risks related to evolving technology. 4. This task order falls under a broader BPA, indicating potential for follow-on work. 5. The specific services provided under this task order require further clarification to assess performance. 6. The contractor, Zolon Tech Inc., has a track record that warrants review for past performance.

Value Assessment

Rating: fair

The task order value of approximately $6 million over nearly seven years averages to less than $1 million annually. This appears to be a moderate investment for IT services. Benchmarking against similar 'Other Computer Related Services' contracts would provide a clearer picture of value for money. Without specific deliverables, a precise value assessment is challenging, but the annual spend is not exceptionally high.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This method generally promotes a competitive environment, which can lead to better pricing and service quality. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition was intended.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and a wider selection of qualified vendors, which can drive down costs and improve service delivery.

Public Impact

The Department of Labor's Office of the Assistant Secretary for Administration and Management benefits from these IT services. Services are delivered to support administrative and management functions within the agency. The geographic impact is primarily within the District of Columbia. Workforce implications are likely related to supporting the agency's IT infrastructure and personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 7 years) may lead to technology obsolescence and increased costs for upgrades.
Lack of specific performance metrics makes it difficult to gauge contractor effectiveness and value.
Reliance on a single task order under a BPA could limit flexibility if needs change significantly.

Positive Signals

Awarded under full and open competition, suggesting a fair and competitive process.
The task order is part of a larger BPA, which can streamline future procurements.
The contractor is Zolon Tech Inc., whose specific capabilities in 'Other Computer Related Services' are being utilized.

Sector Analysis

This contract falls under the 'Other Computer Related Services' category, a broad segment of the IT services market. The IT services sector is highly dynamic, with significant government spending focused on modernization, cybersecurity, and cloud computing. Comparable spending benchmarks for similar IT support services vary widely based on scope and duration, but this contract's annual value appears moderate within the federal IT landscape.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any small business subcontracting requirements. This suggests that larger businesses were likely the primary participants in the competition. The impact on the small business ecosystem is minimal for this specific award, as it was not designed to promote small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. Transparency is facilitated by federal procurement databases, but detailed performance reports and Inspector General reviews would provide deeper accountability. The specific oversight mechanisms for this BPA call need further investigation.

Related Government Programs

IT Professional Services
IT Services
IT and Telecommunications
Administrative and Management Support Services

Risk Flags

Long-term contract duration
Broad service category
Potential for scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $6.0 million to ZOLON TECH INC.. NEW TASK ORDER FOR DATA SERVICES UNDER BPA NUMBER #16O5DC-2O-A-OOO2

Who is the contractor on this award?

The obligated recipient is ZOLON TECH INC..

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $6.0 million.

What is the period of performance?

Start: 2020-09-30. End: 2026-05-31.

What is the track record of Zolon Tech Inc. with federal contracts, particularly in 'Other Computer Related Services'?

Zolon Tech Inc. has a history of federal contracting. A thorough review of their past performance, including contract awards, completion success, and any past performance issues or disputes, is crucial. Specifically examining their experience with similar IT services, contract values, and agencies would provide insight into their capability to fulfill this task order effectively. Analyzing their performance on previous task orders under this or similar BPAs, if applicable, would also be informative. Understanding their financial stability and any reported performance deficiencies or successes is key to assessing their reliability for this $6 million award.

How does the pricing of this task order compare to similar IT services contracts awarded by the Department of Labor or other federal agencies?

Benchmarking the pricing of this $6 million task order against similar 'Other Computer Related Services' contracts requires access to detailed pricing data and contract specifics. Factors such as labor rates, service scope, duration, and geographic location significantly influence pricing. Without specific line-item costs or a detailed comparison of service levels, it is difficult to definitively assess if the pricing is competitive. However, the average annual spend of under $1 million suggests a moderate cost. A comprehensive analysis would involve comparing the proposed labor hours, rates, and overhead against government databases of historical contract pricing for comparable services.

What are the primary risks associated with a nearly seven-year contract duration for IT services?

The primary risks associated with a nearly seven-year contract duration for IT services include technological obsolescence, vendor lock-in, and potential cost escalations. Technology evolves rapidly, and services or systems implemented early in the contract may become outdated or inefficient by its end. This could necessitate costly upgrades or replacements. Furthermore, a long-term commitment can lead to vendor lock-in, making it difficult to switch providers if performance declines or better solutions emerge. Unforeseen market shifts or changes in the contractor's business can also impact service delivery. Managing these risks requires robust contract management, regular performance reviews, and flexibility to adapt to technological advancements.

How effective has the 'full and open competition' process been in ensuring competitive pricing and quality for this specific task order?

The effectiveness of 'full and open competition' for this task order can be assessed by examining the number of bids received and the final award price relative to initial estimates or market rates. While the designation indicates an intention for broad competition, the actual outcome depends on market dynamics and the specific requirements of the task order. If multiple qualified bidders submitted proposals, it likely fostered competitive pricing. However, without knowing the number of bidders or the evaluation criteria, it's challenging to definitively state its effectiveness. A review of the award justification and any debriefings provided to unsuccessful bidders could offer further insights into the competitive landscape.

What are the historical spending patterns for 'Other Computer Related Services' within the Department of Labor's Office of the Assistant Secretary for Administration and Management?

Analyzing historical spending patterns for 'Other Computer Related Services' within the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM) is essential for context. This involves examining previous contract awards, task orders, and BPA calls issued by OASAM for similar services over the past several fiscal years. Understanding the typical contract values, durations, and the number of contractors utilized can reveal trends in IT service procurement. It helps determine if this $6 million task order represents a significant increase or decrease in spending, and whether OASAM typically relies on a few key vendors or a broader base. Such analysis can also highlight any shifts in the types of IT services being procured.

What specific IT services are encompassed by 'Other Computer Related Services' under this task order, and how do they align with agency needs?

The classification 'Other Computer Related Services' (NAICS code 541519) is broad and can encompass a wide range of IT support functions beyond specialized areas like software development or network management. This could include IT support, help desk services, data processing, IT consulting, system integration, and IT project management. To assess alignment with agency needs, it's crucial to understand the specific tasks outlined in the task order statement of work. These services should directly support the administrative and management functions of the Department of Labor's OASAM. Without the detailed SOW, it's difficult to confirm the precise nature of the services and their strategic fit, but the contract's duration suggests ongoing support requirements.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 13921 PARK CENTER RD STE 500, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Not Designated a Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,685,535

Exercised Options: $6,685,535

Current Obligation: $6,032,357

Actual Outlays: $5,580,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 1605DC20A0009

IDV Type: BPA

Timeline