VA awards $65.3M contract for ATP system full-service, with no competition

Contract Overview

Contract Amount: $65,327 ($65.3K)

Contractor: Chudy Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-09

End Date: 2027-06-08

Contract Duration: 1,460 days

Daily Burn Rate: $45/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FULL-SERVICE ON THE ATP SYSTEM

Place of Performance

Location: MARTINSBURG, BERKELEY County, WEST VIRGINIA, 25405

State: West Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $65,326.6 to CHUDY GROUP LLC for work described as: FULL-SERVICE ON THE ATP SYSTEM Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost savings. 2. The contract duration of 4 years suggests a long-term need for these services. 3. The fixed-price nature of the contract provides some cost certainty for the government. 4. The specific services under the ATP system are not detailed, limiting performance assessment. 5. The award to CHUDY GROUP LLC warrants a review of their past performance and capacity. 6. The lack of competition may limit opportunities for other qualified vendors and innovation.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The fixed-price nature provides some predictability, but the absence of competing offers means the VA may not have secured the most cost-effective solution. A comparison to similar full-service contracts for ATP systems, if available, would be necessary to assess pricing reasonableness. The total award amount of $65.3 million over four years suggests a significant investment, and the lack of competition makes it harder to determine if this represents a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source, definitive contract. This indicates that the VA determined that only one source was capable of meeting the requirement. The lack of competition means there were no other bidders to compare against, potentially leading to a higher price than if multiple vendors had vied for the contract. This approach bypasses the typical price discovery mechanisms inherent in competitive solicitations.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The lack of a bidding process means there was no opportunity to leverage multiple offers to drive down costs.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, ensuring continued operation of its ATP system. The contract provides full-service support for the ATP system, crucial for VA operations. The geographic impact is likely nationwide, supporting VA facilities and personnel across the country. Workforce implications may include the retention of specialized technical staff by the contractor to support the ATP system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits opportunities for small businesses to compete for this significant contract.
Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
The specific nature of 'full-service' for the ATP system is not detailed, making it hard to assess the scope and necessity of all included services.
The contract's duration and value could indicate a reliance on a single vendor, potentially hindering future market flexibility.

Positive Signals

The fixed-price contract type offers cost certainty for the duration of the award.
The award ensures continuity of service for a critical VA system, preventing operational disruptions.
The contractor, CHUDY GROUP LLC, is being entrusted with a significant responsibility, suggesting some level of confidence from the agency.

Sector Analysis

The IT services sector, particularly maintenance and support for specialized systems, is a significant area of federal spending. This contract falls under the Electronic and Precision Equipment Repair and Maintenance NAICS code (811210). Federal agencies often rely on specialized contractors for the upkeep of complex systems like the ATP system. Benchmarking this spending would require comparing it to similar full-service contracts for enterprise-level IT systems within the federal government or large private sector organizations.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides or subcontracting plans. This sole-source award means that small businesses were not given an opportunity to compete for this prime contract. Without specific subcontracting requirements, the direct impact on the small business ecosystem is likely minimal, though it represents a missed opportunity for potential prime contract awards.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring the contractor to deliver specified services. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to a competed contract. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA IT Modernization Initiatives
Federal IT Support Services
Enterprise Resource Planning (ERP) System Maintenance
Asset Management Systems Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $65,326.6 to CHUDY GROUP LLC. FULL-SERVICE ON THE ATP SYSTEM

Who is the contractor on this award?

The obligated recipient is CHUDY GROUP 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 $65,326.6.

What is the period of performance?

Start: 2023-06-09. End: 2027-06-08.

What is the ATP system, and what critical functions does it perform for the VA?

The ATP system, as indicated by the contract description 'FULL-SERVICE ON THE ATP SYSTEM,' likely refers to an Asset Tracking or similar platform crucial for managing the Department of Veterans Affairs' (VA) extensive inventory of equipment, supplies, or other assets. Such systems are vital for operational efficiency, financial accountability, and ensuring that necessary resources are available to support healthcare services and administrative functions across the VA's vast network. Without specific details on the ATP system's exact nature, it's presumed to be a core component of the VA's logistical and operational infrastructure, enabling real-time visibility and control over valuable resources.

Why was this contract awarded on a sole-source basis, and what is the justification?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and awarded as a definitive contract. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available or capable of providing the required services, or in cases of urgent and compelling need. Without further documentation or justification from the VA, the specific reasons for this sole-source award remain unclear. This lack of competition raises concerns about whether the VA explored all available options and obtained the best possible value for taxpayers.

How does the $65.3 million price tag compare to similar full-service IT support contracts?

Benchmarking the $65.3 million price tag for full-service ATP system support is challenging without more specific details about the system's scope, complexity, and the exact services included. However, for a four-year contract supporting a critical enterprise system for a large federal agency like the VA, this amount is substantial. Comparable contracts for enterprise IT support, maintenance, and sustainment can range widely, but multi-million dollar awards over several years are common for mission-critical systems. The absence of competition makes it difficult to ascertain if this price represents fair market value or if a competitive process could have yielded significant savings.

What is CHUDY GROUP LLC's track record with the VA and similar large-scale IT contracts?

Information regarding CHUDY GROUP LLC's specific track record with the VA and their experience with large-scale IT contracts is not detailed in the provided data. A thorough analysis would require reviewing past performance evaluations, contract history, and any reported issues or successes with previous government contracts. Given this is a sole-source award for a significant amount, the VA presumably has confidence in CHUDY GROUP LLC's capabilities. However, without public access to their performance history, it's difficult for external analysts to independently assess their suitability and reliability for this critical role.

What are the potential risks associated with a sole-source award for essential IT services?

Sole-source awards for essential IT services carry several potential risks. Firstly, the lack of competition can lead to higher costs for the government, as there is no market pressure to drive down prices. Secondly, it can stifle innovation, as the incumbent contractor may have less incentive to introduce new technologies or efficiencies. Thirdly, it creates vendor lock-in, making it difficult and potentially costly to switch providers in the future. Finally, it raises concerns about accountability and performance, as the agency has fewer options if the contractor underperforms. For the VA's ATP system, these risks could translate to budget overruns, suboptimal system performance, and reduced flexibility in adapting to future technological needs.

What is the historical spending pattern for ATP system support at the VA, and how does this contract compare?

The provided data does not include historical spending patterns for ATP system support at the VA. To conduct a comparative analysis, one would need to examine previous contracts for the same or similar systems, noting their duration, value, and whether they were competed. Understanding historical spending would help determine if this $65.3 million award represents an increase, decrease, or stable level of investment. It would also shed light on whether the VA has consistently relied on sole-source providers for this service or if competitive procurements have been the norm in the past.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24523Q0625

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 106 ROCHE DR, DURHAM, NC, 27703

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $114,322

Exercised Options: $65,327

Current Obligation: $65,327

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline