DOT awards $2.08M for web application tools to CYPHER, LLC, a sole-source contract

Contract Overview

Contract Amount: $2,082,616 ($2.1M)

Contractor: Cypher, LLC

Awarding Agency: Department of Transportation

Start Date: 2025-08-04

End Date: 2026-08-14

Contract Duration: 375 days

Daily Burn Rate: $5.6K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: EFAST PA 25-037-NV WEB BASED APPLICATION TOOLS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $2.1 million to CYPHER, LLC for work described as: EFAST PA 25-037-NV WEB BASED APPLICATION TOOLS Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract type is Time and Materials, which can pose cost control risks if not managed closely. 3. The duration of 375 days is standard for this type of service. 4. The agency is the Department of Transportation, specifically the Federal Aviation Administration. 5. The North American Industry Classification System (NAICS) code is 541512 for Computer Systems Design Services. 6. The contractor, CYPHER, LLC, is based in the District of Columbia.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The Time and Materials (T&M) contract type, while flexible, can lead to higher costs if not strictly managed and if the scope of work is not well-defined. The awarded amount of $2.08 million for a 375-day period suggests a daily rate that would need to be compared against market benchmarks for similar IT services to assess fairness. Given the sole-source nature, there's an inherent risk of overpayment compared to a competitively procured contract.

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 on a sole-source basis. This means that only one vendor, CYPHER, LLC, was solicited and awarded the contract. The lack of competition means that the government did not explore offers from multiple potential providers, which is typically done to ensure the best possible price and quality.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without bids from other companies, there is no market pressure to drive down prices, potentially leading to higher expenditures.

Public Impact

The Federal Aviation Administration (FAA) will benefit from enhanced web-based application tools. These tools are expected to support various operational and administrative functions within the FAA. The primary impact is on the internal operations and efficiency of the FAA. The contract is geographically focused on the District of Columbia, where the contractor is located, but the services likely support national FAA operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Time and Materials contract type carries inherent risks of cost overruns if not closely monitored.
Lack of competition may indicate potential barriers to entry for other qualified vendors or a failure to adequately market the requirement.

Positive Signals

Contract awarded to a single vendor, potentially indicating a specialized capability or a long-standing relationship.
The contract is for essential IT services supporting the Federal Aviation Administration's operations.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. Contracts like this, for developing and maintaining web-based application tools, are common across many government agencies. The market for these services is competitive, but sole-source awards bypass this competition. Benchmarking spending in this area would involve comparing the daily rates and overall contract value against similar IT support contracts awarded by the FAA or other transportation-related agencies.

Small Business Impact

This contract does not appear to have a small business set-aside (sb: false). Furthermore, the contractor, CYPHER, LLC, is not explicitly identified as a small business in the provided data. There is no indication of subcontracting plans for small businesses. This sole-source award to a potentially larger entity means that opportunities for small businesses to participate in this specific contract are likely limited.

Oversight & Accountability

Oversight for this contract will primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. The contract's Time and Materials nature necessitates close monitoring of labor hours and material costs to ensure adherence to the awarded ceiling. Transparency regarding the specific use of funds and the progress of the web application development will be crucial. While not explicitly stated, the DOT's Office of Inspector General would likely have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Federal Aviation Administration IT Modernization Programs
Department of Transportation IT Services Contracts
Computer Systems Design Services Federal Contracts
Web Application Development and Maintenance Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.1 million to CYPHER, LLC. EFAST PA 25-037-NV WEB BASED APPLICATION TOOLS

Who is the contractor on this award?

The obligated recipient is CYPHER, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $2.1 million.

What is the period of performance?

Start: 2025-08-04. End: 2026-08-14.

What is the track record of CYPHER, LLC with the federal government, particularly with the Department of Transportation?

Information regarding CYPHER, LLC's specific track record with the federal government, and particularly the Department of Transportation, is not detailed in the provided data snippet. To assess their track record, one would need to consult federal procurement databases like SAM.gov or FPDS-NG to review past performance on similar contracts. Key areas to examine would include on-time delivery, adherence to budget, quality of services rendered, and any past performance issues or awards. Without this historical data, it's difficult to gauge their reliability and expertise for this specific $2.08 million contract.

How does the awarded amount compare to similar IT services contracts for web application development within the federal government?

The awarded amount of $2,082,616.14 for 375 days of Computer Systems Design Services (NAICS 541512) for web-based application tools is difficult to benchmark precisely without more context on the scope and complexity of the services. However, federal IT services contracts can range widely. A Time and Materials contract, especially when awarded sole-source, often carries a premium compared to fixed-price or competitively bid contracts. To perform a true comparison, one would need to analyze the average daily rates for similar roles (e.g., developers, system designers) and the estimated hours required, comparing these against market data and other government contracts for comparable services, ideally those awarded competitively.

What are the primary risks associated with a sole-source Time and Materials contract for IT services?

Sole-source Time and Materials (T&M) contracts present several significant risks. Firstly, the lack of competition means the government may not be getting the best possible price, as there's no market pressure to drive down costs. Secondly, the T&M structure, where the contractor is paid for actual labor hours and materials used, can incentivize inefficiency or scope creep if not rigorously managed. Without a fixed price or strong oversight, costs can escalate beyond initial estimates. For the government, this necessitates robust project management, detailed tracking of all expenditures, and clear definition of deliverables to mitigate overspending and ensure value for taxpayer money.

What specific web-based application tools are being developed or maintained under this contract?

The provided data snippet identifies the contract's purpose as 'EFAST PA 25-037-NV WEB BASED APPLICATION TOOLS' and classifies the service under NAICS code 541512 (Computer Systems Design Services). However, it does not specify the exact nature or function of these web-based application tools. To understand the specific applications, further details would be required, such as statements of work (SOW), performance work statements (PWS), or contract award justifications. These documents would typically outline the objectives, functionalities, and intended users of the applications being developed or maintained.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and was awarded as a 'BPA CALL' on a sole-source basis. Typically, sole-source awards are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required services, or in cases of urgent and compelling need. Without the specific justification documentation (e.g., a Justification for Other Than Full and Open Competition - JOFOC), it is impossible to determine the precise reason. This lack of competition raises questions about whether alternative solutions were adequately explored or if there were unique circumstances necessitating this approach.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cypher LLC

Address: 44679 ENDICOTT DRIVE, ASHBURN, VA, 20147

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

Financial Breakdown

Contract Ceiling: $11,521,828

Exercised Options: $2,082,616

Current Obligation: $2,082,616

Actual Outlays: $891,461

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 693KA919A00002

IDV Type: BPA

Timeline