DOT's FAA awards $74.4M for Exadata relocation, raising questions on competition and value

Contract Overview

Contract Amount: $74,372 ($74.4K)

Contractor: Systems Intelligence, LLC

Awarding Agency: Department of Transportation

Start Date: 2025-09-22

End Date: 2026-03-31

Contract Duration: 190 days

Daily Burn Rate: $391/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RELOCATE ESC'S EXADATA

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73169

State: Oklahoma Government Spending

Plain-Language Summary

Department of Transportation obligated $74,372.07 to SYSTEMS INTELLIGENCE, LLC for work described as: RELOCATE ESC'S EXADATA Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Limited competition may lead to suboptimal pricing compared to market rates. 3. Short contract duration of 190 days suggests a focused, potentially urgent need. 4. The service category relates to electronic computer manufacturing, a specialized field. 5. The contract's value is significant for the specific service provided. 6. Oversight and accountability mechanisms for this sole-source award warrant scrutiny.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark due to its non-competitive nature and specific service (Exadata relocation). Without comparable bids or market data for this niche service, assessing true value-for-money is challenging. The fixed-price structure provides some cost certainty, but the lack of competition raises concerns about whether the government secured the best possible price. Further analysis would require understanding the specific technical requirements and market availability of specialized relocation services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed openly. This approach is typically reserved for situations where only one vendor can provide the required goods or services. The lack of competition means there were no other bidders to compare against, potentially limiting the government's ability to negotiate the most favorable terms and pricing. This raises questions about the thoroughness of the market research conducted to ensure no other capable vendors existed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government lacks leverage to drive down costs, potentially resulting in higher overall expenditure for this service.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving critical IT infrastructure relocation services. The service directly supports the FAA's operational capabilities by ensuring the continuity of essential data systems. The geographic impact is localized to the areas where the Exadata systems are being relocated. Workforce implications are likely limited to specialized IT personnel required for the relocation, potentially involving Systems Intelligence, LLC's staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value.
Potential for inflated pricing due to sole-source award.
Limited transparency into the justification for sole-sourcing.
Short performance period may indicate rushed procurement or limited scope.

Positive Signals

Contract awarded to a single, presumably capable, vendor.
Fixed-price contract provides cost certainty for the government.
Service delivery is tied to a specific, critical IT function.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data center operations and infrastructure management. The market for specialized IT hardware relocation, particularly for high-performance systems like Exadata, is niche. Comparable spending benchmarks are difficult to establish without detailed service scope, but IT infrastructure services represent a substantial portion of federal IT spending. This contract addresses a specific, critical need within the FAA's IT infrastructure.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Given the specialized nature of Exadata relocation and the sole-source award, it is unlikely that small businesses were significantly involved in the primary contract. Further investigation into subcontracting plans would be needed to assess any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited by the non-competitive nature; however, contract award details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Aviation Administration IT Infrastructure Modernization
Department of Transportation Data Center Operations
High-Performance Computing Relocation Services
Oracle Exadata Support Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to non-competitive procurement.
Limited transparency into vendor selection and pricing reasonableness.
Short contract duration may indicate rushed process or scope limitations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $74,372.07 to SYSTEMS INTELLIGENCE, LLC. RELOCATE ESC'S EXADATA

Who is the contractor on this award?

The obligated recipient is SYSTEMS INTELLIGENCE, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $74,372.07.

What is the period of performance?

Start: 2025-09-22. End: 2026-03-31.

What is the specific justification provided by the FAA for awarding this contract on a sole-source basis to Systems Intelligence, LLC?

The provided data indicates the contract was awarded as 'NOT COMPETED' and the award type is 'PURCHASE ORDER'. While the specific justification is not detailed in the provided data, sole-source awards are typically made when only one responsible source is available or capable of meeting the agency's needs. This could be due to proprietary technology, unique expertise, or urgent requirements where competition is not feasible. The FAA would have had to document and approve a justification and approval (J&A) for this sole-source procurement, outlining the reasons why full and open competition was not practicable. Without access to the J&A document, the precise rationale remains unknown, but common reasons include specialized skills, existing infrastructure compatibility, or critical time constraints.

How does the $74.4 million cost compare to similar Exadata relocation projects within the federal government or private sector?

Benchmarking the $74.4 million cost for Exadata relocation is challenging without more specific details on the scope of work, the number of systems, the distance of the relocation, and the required downtime. Exadata systems are high-performance, high-value hardware, and their relocation involves significant logistical and technical complexity. Costs can vary widely based on these factors. Generally, large-scale data center migrations or relocations can run into millions of dollars. Given the sole-source nature of this award, a direct cost comparison to competitively bid projects is not feasible. However, the price would ideally be assessed against internal cost estimates or industry benchmarks for similar, albeit often smaller or less complex, IT infrastructure moves. The fixed-price nature suggests the contractor has estimated these costs, but the lack of competition prevents external validation of its reasonableness.

What are the key risks associated with a sole-source award for critical IT infrastructure relocation?

The primary risk associated with a sole-source award for critical IT infrastructure relocation is the potential for overpayment due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price or terms. Another significant risk is vendor lock-in, where the agency becomes dependent on a single provider, potentially limiting future flexibility and negotiation power. There's also a risk that the chosen vendor may not possess the absolute best capabilities or innovative solutions available in the market, as competition often drives providers to offer their most advanced services. Furthermore, the justification for sole-sourcing itself can be a risk if it's not adequately documented or if market research was insufficient, potentially leading to protests or audit findings. Finally, the absence of multiple bidders can reduce transparency in the procurement process.

What is the expected impact of this contract on the FAA's operational continuity and IT service delivery?

This contract is intended to ensure the operational continuity of the FAA's Exadata systems by facilitating their relocation. Exadata systems are typically used for high-performance data processing and database management, often supporting critical applications. A successful relocation, managed under this contract, should minimize downtime and ensure that these vital IT services remain available to support the FAA's mission. The contract's short duration (190 days) suggests a focused effort to move these systems efficiently. The successful completion of this relocation is crucial for maintaining the integrity and performance of the FAA's data infrastructure, thereby supporting its air traffic control, safety, and operational management functions without significant disruption.

How does this $74.4 million award fit into the broader context of the FAA's IT spending and modernization efforts?

The $74.4 million award represents a significant investment within the FAA's IT budget, specifically allocated for infrastructure management and relocation. While the exact proportion of the FAA's total IT spending is not provided, such an amount typically signifies a project of high importance, likely related to modernization, consolidation, or upgrading critical systems. The relocation of Exadata systems suggests an effort to optimize data center operations, potentially moving to a more efficient or secure facility, or consolidating hardware. This type of expenditure aligns with broader government initiatives to modernize IT infrastructure, improve efficiency, and enhance cybersecurity. Understanding the FAA's overall IT modernization roadmap would provide further context on how this specific contract contributes to larger strategic goals.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - STORAGE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 29574

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2553 DULLES VIEW DR, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $75,872

Exercised Options: $74,372

Current Obligation: $74,372

Actual Outlays: $74,372

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline