State Department awards $2.2M IT support contract to KADIAK LLC, raising questions about competition and value

Contract Overview

Contract Amount: $2,195,674 ($2.2M)

Contractor: Kadiak LLC

Awarding Agency: Department of State

Start Date: 2026-09-28

End Date: 2026-09-27

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SUPPORT SERVICES FOR THE NEA/SCA

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $2.2 million to KADIAK LLC for work described as: IT SUPPORT SERVICES FOR THE NEA/SCA Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Pricing structure is Time and Materials, which can lead to cost overruns if not managed closely. 3. Lack of competition may indicate limited market availability or specific contractor capabilities. 4. Performance period extends to late 2026, suggesting a need for ongoing IT support. 5. The contract falls under IT Support Services, a critical function for agency operations. 6. No small business set-aside was utilized, potentially impacting small business participation.

Value Assessment

Rating: questionable

The Time and Materials pricing model, without a clear ceiling or fixed price component, presents a risk for cost control. Benchmarking against similar IT support contracts is difficult without more detailed service descriptions and performance metrics. The total award value of $2.2 million over its term suggests a moderate investment, but the lack of competitive bidding prevents a robust assessment of whether this represents a fair market price. Further analysis of the contractor's historical performance and pricing on similar government contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when a specific contractor is deemed uniquely qualified or when circumstances prevent full and open competition. The absence of multiple bidders means there was no direct price comparison or negotiation driven by market forces, which could lead to higher costs for the government. The justification for this sole-source award needs to be thoroughly reviewed to ensure it aligns with federal procurement regulations.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in higher expenditures for taxpayers. It also reduces opportunities for other qualified vendors to compete for government business.

Public Impact

The primary beneficiary is the Department of State, which will receive essential IT support services. Services include IT support, crucial for the agency's daily operations and data management. The geographic impact is concentrated in Washington D.C., where the State Department is headquartered. Workforce implications are likely internal to KADIAK LLC, which will provide the personnel for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Time and Materials contract type carries inherent cost overrun risks.
Lack of transparency in the justification for sole-source award.
No small business participation noted in the award details.

Positive Signals

Contract addresses a critical IT support need for the Department of State.
Contract has a defined end date, providing a clear performance window.
KADIAK LLC is the awarded contractor, implying some level of vetting.

Sector Analysis

This contract falls within the IT Support Services sector, a broad category encompassing a wide range of technical assistance and maintenance for information technology systems. The federal government is a significant consumer of these services, with spending often driven by the need to maintain aging infrastructure, implement new technologies, and ensure cybersecurity. Comparable spending benchmarks are difficult to establish without specific service details, but IT support is a consistent and substantial expenditure across most federal agencies. The market for IT support services is competitive, making sole-source awards notable.

Small Business Impact

The contract details indicate that this was not awarded as a small business set-aside, nor is there information suggesting significant subcontracting opportunities for small businesses. This means that the primary contract value will likely flow to the prime contractor, KADIAK LLC. Without specific subcontracting plans or goals mandated, the direct impact on the small business ecosystem for this particular award appears limited. Future contracts of this nature could benefit from inclusion of small business participation goals to foster broader economic impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Accountability measures would be defined by the contract's terms and conditions, including performance standards and delivery schedules. Transparency is limited due to the sole-source nature of the award and the lack of publicly available justification documents. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to the contract's execution.

Related Government Programs

IT Services
Professional Services
Department of State Contracts
Sole Source Procurements
Time and Materials Contracts

Risk Flags

Sole-source award lacks competitive justification.
Time and Materials contract type poses cost control risks.
Limited transparency regarding contractor qualifications and justification.
No explicit small business participation requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $2.2 million to KADIAK LLC. IT SUPPORT SERVICES FOR THE NEA/SCA

Who is the contractor on this award?

The obligated recipient is KADIAK LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.2 million.

What is the period of performance?

Start: 2026-09-28. End: 2026-09-27.

What is the specific justification provided by the Department of State for awarding this IT support contract on a sole-source basis to KADIAK LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source awards are made when only one responsible source can satisfy the agency's needs, such as when the service requires unique expertise, is a follow-on to a previous contract where the original source is the only viable option, or in cases of urgent and compelling need. Without access to the Justification and Approval (J&A) document, it is impossible to ascertain the precise rationale. This lack of transparency is a concern, as it prevents independent verification of the necessity for foregoing a competitive process. Further investigation into the Department of State's procurement records would be required to obtain this critical information and assess its validity.

How does the Time and Materials (T&M) pricing structure for this contract compare to industry standards for IT support services, and what are the associated risks?

Time and Materials (T&M) contracts are common in the IT services sector, particularly for projects where the scope of work is not clearly defined at the outset or is expected to evolve. However, they carry inherent risks for the government, primarily related to cost control. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This means the total cost can exceed initial estimates if the project takes longer than anticipated or requires more resources. For IT support, this could translate to higher costs if troubleshooting is extensive or if the number of support hours needed is underestimated. Benchmarking T&M rates requires comparing labor categories and overhead rates against similar government contracts or commercial price lists, which are not provided here. Effective oversight, including detailed timesheet reviews and labor hour estimations, is crucial to mitigate the cost risks associated with T&M contracts.

What is KADIAK LLC's track record with the Department of State and other federal agencies, particularly concerning IT support services?

Information regarding KADIAK LLC's specific track record with the Department of State or other federal agencies for IT support services is not detailed in the provided data. A comprehensive assessment would require reviewing contract databases (like SAM.gov or FPDS) for past performance history, including contract values, performance ratings, and any past performance issues or disputes. Understanding their experience with similar scope, scale, and complexity of IT support is crucial for evaluating the risk associated with this sole-source award. Without this historical context, it's difficult to definitively assess their capability and reliability in fulfilling the requirements of this new contract. Further due diligence on the contractor's performance history is recommended.

What are the potential implications of awarding this contract without a small business set-aside for the small business IT services ecosystem?

The absence of a small business set-aside for this $2.2 million IT support contract means that the primary opportunity for revenue is directed towards the prime contractor, KADIAK LLC, which is not specified as a small business in the provided data. This bypasses a key mechanism designed to ensure small businesses have access to federal contracting dollars. While prime contractors are often encouraged or required to subcontract portions of their work to small businesses, this is not explicitly stated here. Without specific subcontracting goals or mandates, there is a risk that small businesses may not significantly benefit from this particular award. This could limit opportunities for growth and market penetration for small IT firms seeking to engage with the Department of State.

How does the $2.2 million award value compare to historical spending patterns for IT support services at the Department of State or similar agencies?

The $2.2 million award value for IT support services over the contract's duration (approximately three years) represents a moderate investment. To provide a meaningful comparison, one would need to analyze historical spending data for IT support at the Department of State and benchmark it against similar-sized agencies or agencies with comparable IT infrastructure needs. For instance, if the Department of State typically awards multiple IT support contracts ranging from $500,000 to $5 million annually, this contract would fall within that typical range. Conversely, if historical spending for similar services has been significantly lower or higher, it might indicate an anomaly. Without access to broader historical spending data and contract profiles, it is challenging to definitively state whether this award is consistent with past patterns or represents an outlier.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Koniag, Inc.

Address: 3800 CENTERPOINT DR, ANCHORAGE, AK, 99503

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

Financial Breakdown

Contract Ceiling: $6,818,949

Exercised Options: $2,205,674

Current Obligation: $2,195,674

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM22D0061

IDV Type: IDC

Timeline