State Dept Awards $49.3M for Embassy IT Services in Iraq to Alutiiq Essential Services LLC

Contract Overview

Contract Amount: $49,301,174 ($49.3M)

Contractor: Alutiiq Essential Services LLC

Awarding Agency: Department of State

Start Date: 2019-03-28

End Date: 2024-12-27

Contract Duration: 2,101 days

Daily Burn Rate: $23.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IRM IT U.S. EMBASSY BAGHDAD IRAQ&CONSULATES

Plain-Language Summary

Department of State obligated $49.3 million to ALUTIIQ ESSENTIAL SERVICES LLC for work described as: IRM IT U.S. EMBASSY BAGHDAD IRAQ&CONSULATES Key points: 1. Significant contract value for IT facilities management in a high-risk environment. 2. Sole-source award limits competition and potentially impacts price discovery. 3. Long-term contract duration (5 years) suggests ongoing need for these services. 4. Focus on Computer Facilities Management Services (NAICS 541513) indicates critical infrastructure support.

Value Assessment

Rating: questionable

The contract value of $49.3M over 5 years for IT facilities management is substantial. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if this pricing is optimal. The lack of a benchmark (PSC is blank) further hinders a precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits competition and may prevent the government from obtaining the best possible price or terms through a more open bidding process.

Taxpayer Impact: The sole-source nature of this award raises concerns about potential overspending and reduced value for taxpayer dollars due to the absence of competitive pressure.

Public Impact

Ensures continued IT operations and support for critical U.S. diplomatic missions in Iraq. Supports personnel safety and communication infrastructure in a challenging geopolitical region. Potential for cost savings if competitive bidding were implemented in the future.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Lack of clear justification for sole-source.
No benchmark data available for pricing assessment.
Long contract duration without competitive review.

Positive Signals

Ensures continuity of essential IT services.
Supports critical diplomatic operations.
Vendor has established presence and likely understands the unique environment.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management. Spending in this area is crucial for government operations, especially in overseas locations. Benchmarks for similar contracts are difficult to ascertain without more specific service details and competitive data.

Small Business Impact

The contract was awarded to Alutiiq Essential Services LLC, which is listed as having 1,000-5,000 employees. It is unclear if this company is considered a small business for the purposes of this contract, and there is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the justification is robust and that the pricing is fair and reasonable. Regular performance reviews and potential future competitive re-solicitations are key accountability measures.

Related Government Programs

Computer Facilities Management Services
Department of State Contracting
Department of State Programs

Risk Flags

Sole-source award.
Lack of competitive justification provided.
No benchmark data for pricing comparison.
Long contract duration (5 years).
High-risk operating environment.
PSC code is not specified.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $49.3 million to ALUTIIQ ESSENTIAL SERVICES LLC. IRM IT U.S. EMBASSY BAGHDAD IRAQ&CONSULATES

Who is the contractor on this award?

The obligated recipient is ALUTIIQ ESSENTIAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.3 million.

What is the period of performance?

Start: 2019-03-28. End: 2024-12-27.

What is the specific justification for awarding this critical IT services contract on a sole-source basis, and has the Department of State explored all avenues for competition?

The provided data states the contract is 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source justification exists, likely due to unique capabilities, urgent need, or lack of other qualified sources. However, the specific rationale is not detailed. The Department of State should have internal processes to document and approve such sole-source awards, ensuring all competitive alternatives were thoroughly evaluated before proceeding.

How does the Department of State ensure cost-effectiveness and value for taxpayer money when awarding large, long-term contracts without competition?

Without competition, ensuring cost-effectiveness relies heavily on robust internal cost analysis, negotiation expertise, and potentially using historical pricing or industry benchmarks if available. The Department should conduct thorough price reasonableness checks and incorporate performance metrics tied to payment. Regular contract reviews and market research are also vital to identify opportunities for future competition or cost reduction.

What are the potential risks associated with relying on a single vendor for essential IT infrastructure management at a U.S. Embassy in a high-threat environment like Baghdad?

The primary risk is vendor lock-in and a lack of leverage in price negotiations. If the vendor underperforms or faces operational issues, it could disrupt critical communications and operations. Dependence on one entity also increases vulnerability if the vendor experiences financial instability or security breaches. Contingency planning and strong performance management are crucial to mitigate these risks.

Industry Classification

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

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

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 300 ALIMAQ DR, KODIAK, AK, 99615

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

Financial Breakdown

Contract Ceiling: $62,276,325

Exercised Options: $50,519,348

Current Obligation: $49,301,174

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $4,965,530

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline