VA awards $98.6M for software development, with FAVOR TECHCONSULTING, LLC leading delivery orders

Contract Overview

Contract Amount: $98,653,335 ($98.7M)

Contractor: Favor Techconsulting, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-12-20

End Date: 2025-07-09

Contract Duration: 2,028 days

Daily Burn Rate: $48.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TO FOR FSC SOFTWARE DEVELOPMENT

Place of Performance

Location: RICHMOND, RICHMOND CITY County, VIRGINIA, 23225

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $98.7 million to FAVOR TECHCONSULTING, LLC for work described as: TO FOR FSC SOFTWARE DEVELOPMENT Key points: 1. Contract value represents a significant investment in IT modernization for the VA. 2. The use of Time and Materials pricing may pose risks if not closely managed. 3. Competition was robust, suggesting potential for competitive pricing. 4. The contract duration extends over multiple fiscal years, indicating a long-term need. 5. Performance is tied to computer systems design services, a critical area for agency operations. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The total award of $98.6 million for software development services appears reasonable given the contract's duration and scope. Benchmarking against similar IT services contracts within the federal government suggests that pricing for this type of work can vary widely. However, the Time and Materials (T&M) pricing model, while flexible, requires diligent oversight to ensure cost efficiency and prevent scope creep. Without specific details on labor rates or the volume of work, a precise value-for-money assessment is challenging, but the competitive nature of the award provides some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 7 bidders suggests a healthy level of competition for this requirement. A competitive environment generally leads to better price discovery and encourages contractors to offer more favorable terms and innovative solutions to win the award.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs and ensures the government receives the best possible value for its investment.

Public Impact

Veterans will benefit from improved IT systems and software supporting VA operations. The contract delivers essential computer systems design services. The geographic impact is primarily within the VA's operational footprint, likely nationwide. Workforce implications include employment for IT professionals and software developers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure.
Risk of scope creep if requirements are not clearly defined and managed.
Dependence on a single contractor for critical software development services over an extended period.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contract duration of over 5 years suggests a stable, long-term need.
The contractor, FAVOR TECHCONSULTING, LLC, is performing work for the VA, indicating some level of established relationship or capability.

Sector Analysis

The federal IT services market is vast and highly competitive, with significant spending allocated to software development and computer systems design. This contract falls within the broader category of IT services, which is crucial for modernizing government operations. Comparable spending benchmarks for similar software development contracts can range from tens to hundreds of millions of dollars, depending on complexity and duration. The VA's consistent investment in IT reflects the growing demand for digital services in healthcare and benefits administration.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this particular award. However, the prime contractor may engage small businesses as subcontractors, which would then contribute to the small business economy.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Veterans Health Administration IT Modernization
Department of Veterans Affairs Enterprise Systems
Federal Civilian IT Services Contracts
Software Development and Engineering Services

Risk Flags

Potential for cost overruns due to T&M pricing.
Risk of technological obsolescence over the contract's long duration.
Need for robust contract oversight to ensure performance and value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $98.7 million to FAVOR TECHCONSULTING, LLC. TO FOR FSC SOFTWARE DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is FAVOR TECHCONSULTING, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $98.7 million.

What is the period of performance?

Start: 2019-12-20. End: 2025-07-09.

What is the track record of FAVOR TECHCONSULTING, LLC with the Department of Veterans Affairs?

FAVOR TECHCONSULTING, LLC has been awarded multiple contracts with the Department of Veterans Affairs, primarily in the IT services domain. This specific contract, valued at approximately $98.6 million, represents a significant engagement. Analyzing past performance data, including contract closeouts, past performance evaluations, and any reported disputes or claims, would provide a clearer picture of their reliability and effectiveness in delivering services to the VA. Understanding their history with similar software development projects for the VA is crucial for assessing future performance risks and ensuring successful project outcomes.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar software development services?

Time and Materials (T&M) contracts are often used when the scope of work cannot be clearly defined at the outset or is expected to change. They reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fixed fee or percentage for overhead and profit. Compared to Firm-Fixed-Price (FFP) contracts, T&M offers more flexibility but carries a higher risk of cost overruns for the government if not managed diligently. For software development, FFP contracts are generally preferred when requirements are well-defined, as they provide cost certainty. However, in rapidly evolving technological environments or for research-oriented projects, T&M can be more appropriate, provided robust oversight mechanisms are in place to control costs and prevent scope creep.

What are the potential risks associated with a contract duration of over 5 years for software development?

A contract duration of over 5 years for software development, like this $98.6 million VA contract, presents several potential risks. Technology evolves rapidly, and software developed today might become outdated or require significant re-architecture within that timeframe. There's a risk of vendor lock-in, making it difficult and costly to switch providers if performance declines or needs change. Furthermore, maintaining consistent quality and innovation over such a long period can be challenging. The VA must ensure strong contract management, regular performance reviews, and flexibility to adapt to technological advancements and evolving mission requirements to mitigate these risks.

How does the number of bidders (7) in this full and open competition impact the potential value for taxpayers?

Having seven bidders in a full and open competition for this $98.6 million software development contract is a positive indicator for taxpayer value. A larger pool of qualified bidders generally intensifies competition, driving down prices and encouraging contractors to offer their best technical solutions and most competitive rates. This scenario increases the likelihood that the Department of Veterans Affairs will secure high-quality services at a reasonable cost. It also provides the agency with a broader range of options and reduces the risk of relying on a single source, which could otherwise lead to inflated prices or diminished service quality over the contract's lifespan.

What is the typical spending range for computer systems design services within the federal government?

Spending on computer systems design services within the federal government can vary significantly, ranging from small, task-order-level awards to multi-billion dollar enterprise-wide contracts. For services similar to this $98.6 million VA contract, which involves software development, typical contract values can range from a few million dollars for specific projects to tens or even hundreds of millions for larger, multi-year efforts. Agencies like the Department of Defense, Health and Human Services, and Homeland Security are major spenders in this category. The overall federal IT services market is valued in the tens of billions annually, making this VA contract a notable, but not exceptionally large, investment within that context.

Industry Classification

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

Offers Received: 7

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8075 LEESBURG PIKE STE 300, VIENNA, VA, 22182

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $98,653,335

Exercised Options: $98,653,335

Current Obligation: $98,653,335

Actual Outlays: $62,509,465

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $8,107,882

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1006

IDV Type: IDC

Timeline