VA awards $137M IT contract to ALVAREZ LLC for network services, with 5 bidders competing

Contract Overview

Contract Amount: $137,095,342 ($137.1M)

Contractor: Alvarez LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-02-11

End Date: 2027-03-26

Contract Duration: 1,504 days

Daily Burn Rate: $91.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IRP LAN

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $137.1 million to ALVAREZ LLC for work described as: IRP LAN Key points: 1. Contract value of $137M over 4 years suggests significant investment in IT infrastructure. 2. Full and open competition after exclusion of sources indicates a structured procurement process. 3. The presence of 5 bidders points to a healthy level of market interest and potential for competitive pricing. 4. Firm Fixed Price contract type offers cost certainty for the government. 5. This contract supports the Department of Veterans Affairs' mission-critical IT operations. 6. The duration of 1504 days (approx. 4 years) allows for sustained service delivery and potential for long-term partnership. 7. The NAICS code 541519 suggests a broad range of computer-related services are covered.

Value Assessment

Rating: good

The contract value of $137M for network services over approximately four years appears reasonable given the scope of IT support typically required by a large agency like the VA. Benchmarking against similar large-scale IT network contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost risks for the government. Without specific per-unit cost data or detailed service level agreements, a definitive assessment of pricing efficiency is challenging, but the competitive bidding process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was broad, there might have been specific reasons for excluding certain sources initially. The fact that 5 bidders participated suggests a robust competition, which generally leads to better price discovery and potentially lower costs for the government. The level of competition is a positive sign for achieving value.

Taxpayer Impact: A competitive process with multiple bidders helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation from the participating companies.

Public Impact

Veterans will benefit from improved IT infrastructure supporting the services they receive from the VA. The contract delivers essential computer-related services, likely including network maintenance, upgrades, and support. The primary geographic impact is within the VA's operational areas, potentially nationwide. The contract supports IT professionals and potentially creates or sustains jobs within the technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if contract scope is not carefully managed.
Reliance on a single contractor for critical network services could pose a risk if performance falters.
The 'after exclusion of sources' clause warrants further investigation into the rationale for initial exclusions.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Competitive bidding process suggests potential for good value.
Long contract duration allows for stable service delivery.
Award to ALVAREZ LLC, a known entity, may indicate a track record of performance.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer-related services. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and upgrading federal IT infrastructure. Contracts of this magnitude are common for agencies like the VA, which rely heavily on robust and secure networks to deliver services to millions of beneficiaries. Comparable spending benchmarks would involve analyzing other large IT network support contracts awarded by federal agencies.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not appear to be a small business set-aside. There is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether ALVAREZ LLC actively engages small businesses as subcontractors for specialized services or components.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, including service level agreements and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA IT Modernization Initiatives
Federal Network Infrastructure Contracts
IT Services for Healthcare Providers
Enterprise IT Management Support

Risk Flags

Potential for limited competition due to source exclusion.
Contract performance risk associated with a single awardee.
Need for clear performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $137.1 million to ALVAREZ LLC. IRP LAN

Who is the contractor on this award?

The obligated recipient is ALVAREZ 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 $137.1 million.

What is the period of performance?

Start: 2023-02-11. End: 2027-03-26.

What is ALVAREZ LLC's past performance record with the federal government, particularly on similar IT network contracts?

Assessing ALVAREZ LLC's past performance is crucial for understanding their capability to execute this $137M contract. A review of their contract history within the Federal Procurement Data System (FPDS) would reveal previous awards, performance ratings, and any past issues or disputes. Specifically, looking for contracts with similar scope (network services, IT infrastructure support) and value would provide the most relevant context. Positive performance indicators would include consistent on-time delivery, adherence to budget, positive customer feedback, and a lack of significant contract modifications or terminations for default. Conversely, a history of poor performance, unresolved issues, or frequent contract disputes would raise concerns about their ability to meet the VA's requirements effectively.

How does the awarded price compare to industry benchmarks for similar network services?

To benchmark the value for money, the awarded price of $137M needs to be compared against industry standards for similar IT network services. This involves analyzing data from other large federal contracts (e.g., GSA schedules, other agency awards) for comparable services, considering factors like scope, duration, labor categories, and geographic coverage. Market research reports on IT services pricing and discussions with industry experts can also provide valuable insights. If the VA's price per unit or overall contract cost is significantly lower than comparable contracts, it suggests good value. Conversely, if it's substantially higher, it may indicate potential overpricing or a scope that is more extensive than initially apparent, warranting further scrutiny of the contract's specifics and the competitive landscape.

What are the key performance indicators (KPIs) and service level agreements (SLAs) for this contract, and how will performance be measured?

The effectiveness and value of this contract are heavily dependent on the defined Key Performance Indicators (KPIs) and Service Level Agreements (SLAs). These metrics, typically detailed in the Performance Work Statement (PWS), outline the expected quality, availability, and responsiveness of the network services. Examples might include network uptime percentages, data transfer speeds, incident response times, and system availability. The VA's measurement and evaluation plan will dictate how rigorously ALVAREZ LLC's performance against these KPIs/SLAs is tracked. Regular performance reviews, reporting requirements, and potential for incentive or disincentive clauses tied to performance outcomes are critical oversight mechanisms to ensure the contractor delivers the required services effectively and taxpayers receive good value.

What is the historical spending trend for similar IT network services at the Department of Veterans Affairs?

Analyzing historical spending trends for similar IT network services at the VA provides essential context for evaluating the current $137M award. By examining past contract awards for network maintenance, support, and infrastructure upgrades over the last 5-10 years, one can identify patterns in spending levels, contract durations, and the types of services procured. This historical data helps determine if the current award represents an increase, decrease, or stable level of investment in this area. Significant deviations from historical spending could signal a shift in VA's IT strategy, a response to emerging technological needs, or potential budget fluctuations. Understanding these trends aids in assessing the reasonableness of the current contract's value and its alignment with the VA's long-term IT objectives.

What specific risks are associated with the 'Full and Open Competition After Exclusion of Sources' procurement method used for this contract?

The 'Full and Open Competition After Exclusion of Sources' method, while aiming for broad competition, introduces specific risks. The 'exclusion of sources' implies that certain potential bidders were deemed ineligible from the outset, potentially for reasons related to national security, specific technical requirements, or prior performance issues. The primary risk is that this exclusion might have inadvertently limited the pool of highly qualified bidders, potentially reducing the overall competitiveness and leading to a less optimal price or solution. Transparency regarding the justification for excluding sources is critical. If the exclusions were not well-founded or documented, it could raise concerns about fairness in the procurement process and potentially limit the government's access to the best available solutions and pricing, impacting overall value for taxpayers.

Industry Classification

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

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 161 FORT EVANS RD NE STE 335, LEESBURG, VA, 20176

Business Categories: Category Business, HUBZone Firm, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $398,116,394

Exercised Options: $398,116,394

Current Obligation: $137,095,342

Actual Outlays: $55,859,301

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD19B

IDV Type: GWAC

Timeline