Department of State awards $76.4M for network infrastructure and support services to HCI Management Services Company

Contract Overview

Contract Amount: $76,372,705 ($76.4M)

Contractor: HCI Management Services Company

Awarding Agency: Department of State

Start Date: 2017-11-22

End Date: 2023-03-31

Contract Duration: 1,955 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: LABOR HOURS

Sector: IT

Official Description: PURCHASE OF MATERIALS AND SUPPLIES TO SUPPORT NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO NETWORKS; INSTALLATION AND INTEGRATION OF NETWORK EQUIPMENT, AND SUPPORT OF LARGE-SCALE CABLE AND CONDUIT INSTALLATION EFFORTS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $76.4 million to HCI MANAGEMENT SERVICES COMPANY for work described as: PURCHASE OF MATERIALS AND SUPPLIES TO SUPPORT NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO NETWORKS; INSTALLATION AND I… Key points: 1. Contract focuses on comprehensive network lifecycle support, from assessment to installation and ongoing maintenance. 2. Significant duration of the contract (over 1900 days) suggests a long-term need for these services. 3. The award was not competed, raising questions about potential cost savings and market engagement. 4. Services encompass a broad range of technical expertise, including specialized network systems and audio/video integration. 5. The contract's value places it in the mid-to-large tier for IT infrastructure support services. 6. Geographic focus on Washington D.C. indicates support for a specific, high-density operational area.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed service breakdowns and comparable market data. The total award of $76.4 million over approximately five years suggests an average annual spend of around $15 million. Given the broad scope of network infrastructure, installation, and support services, this figure appears within a reasonable range for large-scale government IT projects. However, the lack of competition makes it difficult to definitively assess whether the pricing represents optimal value for money or if alternative, more cost-effective solutions might exist.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This approach is typically used when a specific contractor possesses unique capabilities, or in situations where only one source is available or deemed necessary. The absence of competition limits the government's ability to leverage market forces to drive down prices and explore a wider range of technical solutions. It also means that the pricing and terms were negotiated directly with HCI Management Services Company.

Taxpayer Impact: Taxpayers may not benefit from the cost efficiencies that typically arise from a competitive bidding process. Without multiple bids, there is less assurance that the government secured the best possible price for the services rendered.

Public Impact

The Department of State benefits from enhanced and reliable network infrastructure, crucial for its global operations. Services delivered include network assessments, design, documentation, configuration management, and installation of specialized systems. The primary geographic impact is within the Washington D.C. metropolitan area, supporting federal agency operations. The contract supports a workforce skilled in network engineering, installation, and IT support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Sole-source award raises questions about the availability of other qualified vendors and potential market distortions.
The extended contract duration could lead to vendor lock-in if not managed carefully.
Scope is broad, potentially leading to cost overruns if not precisely managed and monitored.

Positive Signals

HCI Management Services Company is awarded a significant contract, indicating trust in their capabilities by the Department of State.
The contract covers a comprehensive range of network services, suggesting a holistic approach to infrastructure management.
The long duration implies a stable, ongoing need that the contractor is positioned to fulfill.
Focus on installation materials and specialized systems points to critical infrastructure upgrades or deployments.

Sector Analysis

The IT services sector, particularly network infrastructure and telecommunications, is a significant area of federal spending. This contract falls under the broader category of IT support and telecommunications construction and installation. The federal government is a major consumer of these services, with agencies like the Department of State requiring robust and secure networks to conduct operations. Spending in this area is driven by the need for modernization, cybersecurity, and the expansion of digital capabilities. Comparable contracts often involve large dollar values and long durations due to the complexity and scale of network deployments.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component based on the provided data. The absence of small business participation or subcontracting requirements could limit opportunities for smaller firms within this specific procurement. While the contract itself is not a set-aside, the prime contractor may still engage small businesses for subcontracting, but this is not explicitly detailed. The overall impact on the small business ecosystem for this particular award is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The contract's duration and value suggest regular reporting requirements and performance reviews. Transparency is facilitated through contract databases like FPDS, where award details are recorded. While specific Inspector General (IG) jurisdiction isn't detailed here, the Department of State's Office of Inspector General typically has oversight over agency spending and contracts to identify fraud, waste, and abuse.

Related Government Programs

Department of State IT Modernization Programs
Federal Network Infrastructure Contracts
Telecommunications Services for Government Agencies
Network Installation and Support Services

Risk Flags

Sole-source award
Lack of competitive benchmarking
Extended contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $76.4 million to HCI MANAGEMENT SERVICES COMPANY. PURCHASE OF MATERIALS AND SUPPLIES TO SUPPORT NETWORK ASSESSMENTS, DESIGN AND DOCUMENTATION SERVICES, CONFIGURATION MANAGEMENT, PROVISION OF INSTALLATION MATERIALS, INSTALLATION OF SPECIALIZED NETWORK SYSTEMS, INSTALLATION OF VOICE; AUDIO; AND VIDEO NETWORKS; INSTALLATION AND INTEGRATION OF NETWORK EQUIPMENT, AND SUPPORT OF LARGE-SCALE CABLE AND CONDUIT INSTALLATION EFFORTS.

Who is the contractor on this award?

The obligated recipient is HCI MANAGEMENT SERVICES COMPANY.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $76.4 million.

What is the period of performance?

Start: 2017-11-22. End: 2023-03-31.

What is the track record of HCI Management Services Company with the Department of State and other federal agencies?

HCI Management Services Company has a history of receiving federal contracts, including with the Department of State. Analyzing their past performance on similar contracts is crucial for assessing their reliability and capability. This includes examining contract completion rates, any documented performance issues or disputes, and the overall value and scope of previous awards. A review of their federal contracting history would reveal if they have successfully managed large-scale IT infrastructure projects, particularly those involving network installation and support. Understanding their past relationship with the Department of State can provide insights into the rationale behind this sole-source award, potentially indicating a successful prior engagement or specialized expertise.

How does the pricing of this contract compare to similar network infrastructure support contracts awarded by the government?

Direct price comparison is difficult without granular data on the specific services and labor categories included in this $76.4 million award. However, the average annual spend of approximately $15 million for comprehensive network lifecycle support (assessment, design, installation, maintenance) for a large agency like the Department of State is within the expected range for major IT infrastructure projects. To conduct a thorough comparison, one would need to benchmark the labor rates, material costs, and overhead applied against similar contracts awarded through competitive processes. The sole-source nature of this award means that direct competitive benchmarking is not feasible, making it harder to ascertain if the government secured the most cost-effective solution available in the market.

What are the key risks associated with a sole-source award for critical network infrastructure services?

The primary risk of a sole-source award for critical network infrastructure is the potential for inflated costs due to the lack of competitive pressure. Without multiple bids, the government may pay a premium for services. Another significant risk is the potential for reduced innovation, as the government is limited to the solutions and approaches offered by the single awarded contractor. There's also a risk of vendor lock-in, where the agency becomes heavily reliant on the incumbent contractor, making future transitions more difficult and costly. Furthermore, without the vetting process of a competition, there's a slightly elevated risk regarding the contractor's long-term viability or their ability to scale resources effectively if unforeseen demands arise.

How effective is the Department of State in managing long-term, sole-source IT contracts to ensure value and performance?

The effectiveness of the Department of State in managing long-term, sole-source IT contracts can vary. Success hinges on robust contract management practices, including strong oversight by contracting officers, clear performance metrics, regular progress reviews, and proactive risk management. For sole-source awards, it is particularly important to have well-defined statements of work and to continuously monitor the contractor's performance against these requirements. The Department of State has established procedures for contract oversight, but the effectiveness of these measures for this specific contract would depend on the diligence applied throughout its duration. Periodic market research and re-evaluation of the sole-source justification are also key to ensuring continued value.

What is the historical spending trend for network infrastructure and support services at the Department of State?

Analyzing historical spending trends for network infrastructure and support services at the Department of State is essential for context. This contract, valued at $76.4 million over its period of performance, represents a significant investment. Understanding how this award compares to previous years' spending on similar services can reveal patterns of increasing or decreasing investment, shifts in technology focus, or changes in contracting strategies. For instance, a consistent high level of spending might indicate ongoing critical needs, while a sudden increase could signal major modernization efforts or new security requirements. Without specific historical data, it's difficult to pinpoint precise trends, but such an analysis would inform whether this award is an anomaly or part of a sustained commitment to network infrastructure.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1 MISSION DR, WINNEBAGO, NE, 68071

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,372,705

Exercised Options: $76,372,705

Current Obligation: $76,372,705

Actual Outlays: $25,302,325

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM18D0010

IDV Type: IDC

Timeline