PBGC awards $31.4M IT operations contract to Science Applications International Corporation, a sole-source procurement

Contract Overview

Contract Amount: $31,367,733 ($31.4M)

Contractor: Science Applications International Corporation

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2018-08-01

End Date: 2019-12-31

Contract Duration: 517 days

Daily Burn Rate: $60.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: INFRASTRUCTURE INFORMATION TECHNOLOGY OPERATIONS AND MAINTENANCE SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $31.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: INFRASTRUCTURE INFORMATION TECHNOLOGY OPERATIONS AND MAINTENANCE SUPPORT Key points: 1. The contract's value of $31.4 million over 517 days represents a significant investment in IT infrastructure. 2. A sole-source award suggests limited market competition, potentially impacting price negotiation. 3. The cost-plus award fee structure allows for performance-based incentives but requires careful oversight. 4. The contract duration of over a year indicates a need for sustained IT support. 5. The 'Other Computer Related Services' classification points to a broad scope of IT support. 6. The Pension Benefit Guaranty Corporation (PBGC) is the primary agency utilizing these services.

Value Assessment

Rating: fair

The contract's total value of $31.4 million over approximately 1.4 years averages to about $22.4 million annually. Benchmarking this against similar IT operations and maintenance contracts is challenging without more specific service details. However, given the sole-source nature, it's difficult to assess if the pricing reflects competitive market rates. The cost-plus award fee structure introduces variability, making a precise value-for-money assessment contingent on the awarded fees and performance outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Pension Benefit Guaranty Corporation did not conduct a competitive bidding process. This approach is typically used when only one responsible source is available or when a compelling justification exists for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive market, which could lead to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government also misses out on potential innovations or efficiencies that might have emerged from a competitive solicitation.

Public Impact

The primary beneficiary is the Pension Benefit Guaranty Corporation, which receives essential IT support to maintain its operations. Services delivered likely include system maintenance, network support, cybersecurity, and potentially help desk functions. The geographic impact is centered in Washington D.C., where the PBGC is headquartered. Workforce implications may involve the direct employment of IT professionals by Science Applications International Corporation to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost-plus award fee structure requires robust oversight to manage costs and ensure fair profit.
Lack of transparency in the justification for sole-source procurement.
Contract duration may not align with evolving IT needs, requiring future adjustments or new procurements.

Positive Signals

Award to an established contractor like Science Applications International Corporation suggests a degree of confidence in their capabilities.
The contract aims to ensure continuity of critical IT operations for the PBGC.
Performance incentives within the cost-plus award fee structure can drive desired outcomes.

Sector Analysis

The IT services sector is a vast and critical component of federal spending. This contract falls under 'Other Computer Related Services,' a broad category encompassing a wide range of IT support functions. Federal spending in this area is consistently high, driven by the increasing reliance on technology for agency operations. Comparable spending benchmarks are difficult without knowing the specific services, but IT operations and maintenance are a core function for most government agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are likely limited, and the primary contractor, Science Applications International Corporation, will be responsible for fulfilling the service requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Pension Benefit Guaranty Corporation's contracting and program management offices. As a cost-plus award fee contract, rigorous monitoring of costs, performance against objectives, and the justification for awarded fees is crucial. Transparency regarding the sole-source justification and the performance metrics would be key accountability measures. The Inspector General for the PBGC would likely have jurisdiction for audits and investigations.

Related Government Programs

IT Operations and Maintenance Support
Information Technology Services
Computer Related Services
Cloud Computing Services
Cybersecurity Services

Risk Flags

Sole-source award may limit competition and increase costs.
Cost-plus award fee requires diligent government oversight.
Contract duration may not fully align with long-term IT strategy.
Broad NAICS code requires detailed review of Statement of Work for specific services.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $31.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. INFRASTRUCTURE INFORMATION TECHNOLOGY OPERATIONS AND MAINTENANCE SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Pension Benefit Guaranty Corporation (Pension Benefit Guaranty Corporation).

What is the total obligated amount?

The obligated amount is $31.4 million.

What is the period of performance?

Start: 2018-08-01. End: 2019-12-31.

What is the track record of Science Applications International Corporation (SAIC) with the Pension Benefit Guaranty Corporation (PBGC)?

While this specific contract data doesn't detail SAIC's entire history with PBGC, SAIC is a large, established federal contractor with a broad range of IT and technical services. Their past performance with various federal agencies, including potentially PBGC on other contracts, would be a key factor in the agency's decision-making, even for a sole-source award. Agencies typically review a contractor's performance history, including past contract awards, past performance evaluations (e.g., CPARS), and any past issues or disputes, when considering sole-source justifications or awarding new contracts. Without access to PBGC's internal records or a more comprehensive contract history database, a detailed analysis of their specific track record on prior PBGC engagements is not possible from this data alone.

How does the $31.4 million contract value compare to similar IT operations and maintenance contracts awarded by the PBGC or other agencies?

Direct comparison of the $31.4 million value is challenging without knowing the precise scope of services, duration, and specific IT systems supported. This contract is for 517 days (approx. 1.4 years), equating to an annualized value of roughly $22.4 million. For a sole-source award, it's difficult to benchmark against competitive market rates. However, for agencies of similar size and complexity to the PBGC, IT operations and maintenance contracts can range from a few million dollars to tens or even hundreds of millions annually, depending on the scale of IT infrastructure, number of users, and criticality of services. The PBGC's IT needs are likely focused on managing its core functions related to pension plan administration and insurance, which may involve significant database management, application support, and security infrastructure.

What are the primary risks associated with a sole-source award for critical IT services?

The primary risks associated with a sole-source award for critical IT services include lack of price competition, which can lead to inflated costs for the government. Without competitive bidding, there's less incentive for the contractor to offer the most cost-effective solutions. Another risk is reduced innovation, as a competitive environment often spurs contractors to propose novel approaches or efficiencies. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process. If the justification for sole-sourcing is weak or if other capable vendors were overlooked, it could lead to protests or scrutiny. Finally, over-reliance on a single vendor for critical functions can create vendor lock-in and limit the agency's flexibility in the future.

How does the 'Cost Plus Award Fee' (CPAF) contract type influence performance and cost control?

The Cost Plus Award Fee (CPAF) contract type is designed to incentivize contractor performance while allowing for cost reimbursement. Under CPAF, the contractor is reimbursed for allowable costs incurred, plus a base fee that is a percentage of the estimated cost, and an award fee. The award fee is determined by the government based on the contractor's performance against pre-defined criteria and metrics. This structure aims to motivate the contractor to exceed minimum performance standards to earn a higher fee. However, it requires robust government oversight to establish fair and objective performance criteria, accurately evaluate performance, and determine appropriate award fees. If not managed carefully, the potential for higher costs exists if the award fee criteria are too lenient or if the government's evaluation process is flawed. It places a significant burden on the government to actively manage and monitor the contractor's performance.

What is the historical spending pattern for IT operations and maintenance at the Pension Benefit Guaranty Corporation?

This single contract award provides a snapshot for the period of August 1, 2018, to December 31, 2019. To understand historical spending patterns, one would need to examine PBGC's IT spending over multiple fiscal years, looking at all contracts related to IT operations and maintenance, not just this one. This would involve analyzing trends in contract values, types of services procured, and the contractors utilized. Factors such as agency modernization efforts, changes in technology, budget allocations, and shifts in IT strategy would influence these patterns. Without access to PBGC's broader contract databases or historical budget documents, it's impossible to discern a comprehensive spending trend from this isolated data point.

What are the implications of the 'Other Computer Related Services' (NAICS 541519) classification for the scope of this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad classification that encompasses a wide array of IT services not specifically covered by other, more specialized codes. This suggests that the contract with Science Applications International Corporation could involve a diverse range of activities. These might include IT consulting, custom software development support, IT project management, data processing services, IT infrastructure design and implementation, IT support services, and potentially specialized areas like IT security consulting or IT training. The broadness of this code means the specific deliverables and services under this contract would need to be detailed in the contract's statement of work (SOW) to fully understand its scope and requirements.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 16PBGC18R0009

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $32,254,572

Exercised Options: $32,254,572

Current Obligation: $31,367,733

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $11,554,126

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline