VA awards $35.2M sole-source contract for cloud hosting of IVR applications to Tech4Research LLC

Contract Overview

Contract Amount: $35,200 ($35.2K)

Contractor: Tech4research LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-07-31

End Date: 2025-07-30

Contract Duration: 730 days

Daily Burn Rate: $48/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GOVERNMENT CLOUD HOSTING SERVICES FOR INTERACTIVE VOICE RESPONSE (IVR) APPLICATIONS

Place of Performance

Location: MEDFORD, JACKSON County, OREGON, 97504

State: Oregon Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $35,200 to TECH4RESEARCH LLC for work described as: GOVERNMENT CLOUD HOSTING SERVICES FOR INTERACTIVE VOICE RESPONSE (IVR) APPLICATIONS Key points: 1. Contract awarded on a sole-source basis, raising questions about potential lack of competition and price optimization. 2. The duration of the contract is two years, with a total value of $35.2 million. 3. The North American Industry Classification System (NAICS) code 518210 indicates services related to computing infrastructure, data processing, and web hosting. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The award was made by the Department of Veterans Affairs (VA) to Tech4Research LLC. 6. The contract is a Purchase Order, a less complex award instrument than a traditional contract. 7. The contract has a base period of 730 days.

Value Assessment

Rating: questionable

Benchmarking the value for this sole-source cloud hosting contract is challenging without competitive data. The $35.2 million award over two years suggests a significant annual spend of $17.6 million. Without comparable contracts or market research data, it's difficult to definitively assess if this represents a fair and reasonable price. The lack of competition inherent in a sole-source award means there's no market pressure to drive down costs, potentially leading to a higher price than if multiple vendors had bid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the VA did not conduct a competitive bidding process. This typically occurs when only one vendor is capable of meeting the requirement, or in specific emergency situations. The absence of competition means that taxpayers do not benefit from the price discovery that occurs in an open market, potentially leading to higher costs.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts and can result in higher prices for taxpayers due to the lack of competitive pressure.

Public Impact

Veterans will benefit from continued access to Interactive Voice Response (IVR) applications used for communication and information. The contract ensures the availability of critical IT infrastructure for VA operations. The services are likely to be delivered remotely, with a national geographic impact for VA users. The contract supports the IT workforce within Tech4Research LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized hosting requirements.

Positive Signals

Ensures continuity of essential IVR services for the VA.
Firm Fixed Price contract shifts cost risk to the contractor.
Awarded to a single vendor, potentially simplifying management.

Sector Analysis

The cloud hosting and data processing sector is a critical component of government IT infrastructure. The NAICS code 518210 encompasses a broad range of services, including web hosting, data processing, and application hosting. The federal government is a significant consumer of these services, with spending in this area often driven by the need for scalable, secure, and reliable IT solutions. This contract for IVR applications fits within this broader trend of government agencies leveraging cloud-based solutions for operational efficiency.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to Tech4Research LLC, without further information on its size, does not inherently indicate a positive or negative impact on the small business ecosystem. Future analysis would require understanding Tech4Research's size and its subcontracting practices.

Oversight & Accountability

As a Purchase Order, oversight may be less rigorous than for larger, more complex contract vehicles. However, the Department of Veterans Affairs is responsible for monitoring contract performance and ensuring compliance with terms and conditions. Transparency regarding the justification for the sole-source award and ongoing performance reviews would be key oversight mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Government Cloud Computing Services
IT Infrastructure Services
Data Processing and Hosting Services
Interactive Voice Response Systems
Department of Veterans Affairs IT Contracts

Risk Flags

Sole-source award justification requires scrutiny.
Potential for uncompetitive pricing.
Lack of transparency in competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $35,200 to TECH4RESEARCH LLC. GOVERNMENT CLOUD HOSTING SERVICES FOR INTERACTIVE VOICE RESPONSE (IVR) APPLICATIONS

Who is the contractor on this award?

The obligated recipient is TECH4RESEARCH 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 $35,200.

What is the period of performance?

Start: 2023-07-31. End: 2025-07-30.

What is the track record of Tech4Research LLC in performing similar cloud hosting services for federal agencies?

Information regarding Tech4Research LLC's specific track record in performing similar cloud hosting services for federal agencies is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes with previous government contracts. Understanding their experience with IVR application hosting and cloud infrastructure specifically would be crucial. Without this data, it's difficult to gauge their capability and reliability for this particular sole-source award.

How does the annual cost of $17.6 million for cloud hosting compare to market rates for similar services?

Directly comparing the annual cost of $17.6 million for cloud hosting services to market rates is challenging without specific details on the scope, scale, and service level agreements (SLAs) of the contract. Market rates can vary significantly based on factors like storage capacity, processing power, bandwidth, security requirements, and support levels. Given this is a sole-source award, there is no direct competitive benchmark. A thorough analysis would involve obtaining quotes from multiple cloud service providers for comparable services or consulting industry reports on cloud hosting costs for government-grade solutions.

What are the specific risks associated with a sole-source award for critical IT infrastructure like IVR hosting?

Sole-source awards for critical IT infrastructure present several risks. Primarily, the lack of competition can lead to inflated prices as the vendor faces no market pressure to offer competitive rates. There's also a risk of vendor lock-in, where the agency becomes dependent on a single provider, making future transitions costly and complex. Furthermore, without competitive evaluation, there's a reduced assurance of receiving the best available technology or service levels. Oversight becomes even more critical to ensure the vendor is performing adequately and the pricing remains reasonable throughout the contract term.

What is the historical spending pattern of the VA on cloud hosting for IVR applications?

The provided data does not include historical spending patterns for the VA on cloud hosting for IVR applications. To understand this, one would need to analyze past contracts awarded by the VA for similar services over several fiscal years. This would involve searching contract databases for relevant keywords, NAICS codes, and vendors. Analyzing historical spending would help identify trends, assess the growth or decline in this service area, and provide context for the current $35.2 million award, including whether this represents an increase or decrease in investment.

What are the performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not specify the performance metrics or service level agreements (SLAs) for this contract. For cloud hosting services, key SLAs typically include uptime guarantees, response times for support, data recovery objectives, and security compliance standards. Without these details, it is difficult to assess the expected quality of service and hold the contractor accountable for performance. A review of the full contract document would be necessary to identify these critical performance expectations.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24E23Q0096

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1784 CARRERA CIR, MEDFORD, OR, 97504

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $54,400

Exercised Options: $54,400

Current Obligation: $35,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline