DHS awards $87M contract for IT systems design, with Highlight Technologies Inc. as prime

Contract Overview

Contract Amount: $86,974,481 ($87.0M)

Contractor: Highlight Technologies, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2021-07-19

End Date: 2026-04-30

Contract Duration: 1,746 days

Daily Burn Rate: $49.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 35

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SERVICES FOR PRODUCT ENGINEERING AND ENTERPRISE DELIVERY (SPEED)

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $87.0 million to HIGHLIGHT TECHNOLOGIES, INC. for work described as: SERVICES FOR PRODUCT ENGINEERING AND ENTERPRISE DELIVERY (SPEED) Key points: 1. Contract focuses on computer systems design services, crucial for enterprise delivery. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The contract duration of nearly five years indicates a long-term need for these services. 4. Performance is in Virginia, potentially impacting the local IT workforce. 5. The Time and Materials pricing structure warrants close monitoring for cost efficiency. 6. This contract is part of a larger Vehicle (VA) indicating potential for follow-on work.

Value Assessment

Rating: good

The contract value of $86.97 million over its period of performance appears reasonable for comprehensive IT systems design and enterprise delivery services. Benchmarking against similar large-scale IT support contracts within DHS or other federal agencies would provide a clearer picture of value for money. The Time and Materials (T&M) pricing model, while flexible, necessitates diligent oversight to ensure costs remain aligned with the scope of work and market rates for skilled IT professionals.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial solicitations may have had exclusions, the final award was made through a competitive process open to all eligible bidders. The presence of 35 bids suggests a healthy level of competition for this IT services requirement.

Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down prices and encouraging innovation from multiple vendors, leading to better value for the government's investment.

Public Impact

U.S. Citizenship and Immigration Services (USCIS) benefits from enhanced IT systems and enterprise delivery capabilities. Services include computer systems design, crucial for modernizing and maintaining critical government IT infrastructure. The contract's performance location in Virginia may create or sustain jobs within the local technology sector. Federal employees and contractors working on USCIS systems will be directly impacted by the services provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not strictly managed.
The broad scope of 'enterprise delivery' requires clear definition of deliverables and performance metrics to avoid scope creep.
Reliance on a single prime contractor for such a critical function necessitates robust performance monitoring.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
The contract is part of a larger Vehicle (VA), suggesting a strategic sourcing approach by the agency.
A long performance period (nearly 5 years) allows for sustained improvements and knowledge transfer.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The federal IT services market is substantial, with agencies consistently investing in modernizing their systems. This contract for USCIS likely supports the agency's mission-critical operations, aligning with broader government efforts to improve digital services and infrastructure. Comparable spending benchmarks would typically involve analyzing other large IT support contracts awarded by DHS or similar agencies for systems design and integration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded under full and open competition, there is potential for small businesses to participate as subcontractors to Highlight Technologies, Inc. However, the extent of small business subcontracting will depend on the prime contractor's strategy and the specific requirements outlined in the contract.

Oversight & Accountability

Oversight for this contract will primarily reside with the U.S. Citizenship and Immigration Services (USCIS) contracting officers and program managers. The contract's performance is subject to standard federal procurement regulations and oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. The potential for Inspector General (IG) review exists, particularly concerning performance, cost management, and adherence to contract terms.

Related Government Programs

Department of Homeland Security IT Modernization Initiatives
USCIS Case Management Systems
Federal Civilian IT Services Contracts
Enterprise Resource Planning (ERP) Implementation Support

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of scope creep in a broad 'enterprise delivery' contract.
Dependence on a single prime contractor for critical IT functions.
Need for robust performance monitoring and contract management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $87.0 million to HIGHLIGHT TECHNOLOGIES, INC.. SERVICES FOR PRODUCT ENGINEERING AND ENTERPRISE DELIVERY (SPEED)

Who is the contractor on this award?

The obligated recipient is HIGHLIGHT TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Citizenship and Immigration Services).

What is the total obligated amount?

The obligated amount is $87.0 million.

What is the period of performance?

Start: 2021-07-19. End: 2026-04-30.

What is the track record of Highlight Technologies, Inc. in delivering similar IT systems design and enterprise delivery services to federal agencies?

Highlight Technologies, Inc. has a history of performing IT services for federal agencies. While specific details on past performance for contracts of this exact scope and scale require deeper analysis of contract databases and performance reports, their presence as a prime contractor on an $87 million DHS contract suggests they possess the necessary capabilities and experience. Reviewing their past awards, contract modifications, and any reported performance issues or successes would provide a more comprehensive understanding of their track record in delivering complex IT solutions and managing enterprise-level projects within the federal landscape.

How does the awarded value of $86.97 million compare to similar IT systems design contracts within DHS or other agencies?

The $86.97 million value for nearly five years of IT systems design and enterprise delivery services appears to be within a reasonable range for a contract of this nature supporting a major federal agency like DHS. However, a precise comparison requires benchmarking against contracts with similar scopes of work, service levels, and geographic locations. Factors such as the specific technologies involved, the complexity of the systems being designed, and the required expertise of the personnel influence pricing. Without direct comparable contract data, it's difficult to definitively state if this represents exceptional value, but the competitive award process suggests a market-driven price.

What are the primary risks associated with the Time and Materials (T&M) pricing structure for this contract?

The primary risk with a Time and Materials (T&M) contract is the potential for cost overruns, as the government pays for the actual labor hours and materials used. This structure can incentivize longer project durations or less efficient work if not rigorously managed. For this $87 million contract, risks include uncontrolled escalation of labor rates, scope creep where additional work is performed without formal modification, and difficulty in accurately forecasting the total expenditure. Effective risk mitigation requires strong government oversight, detailed tracking of hours and costs, clear task definitions, and proactive management to ensure the contractor remains focused on efficient delivery within the overall budget.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring competitive pricing for IT services?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance the need for broad competition with specific agency requirements that might initially limit the pool of eligible vendors. While it starts with exclusions, the subsequent full and open competition phase allows any qualified bidder to participate, fostering a competitive environment. The fact that 35 bids were received suggests this approach was effective in attracting a significant number of interested parties. This level of competition generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

What are the potential implications of this contract on the broader federal IT services market and small business participation?

This contract, valued at $87 million and awarded to Highlight Technologies, Inc., signifies a substantial commitment by USCIS to external IT support. It reinforces the trend of federal agencies outsourcing complex IT functions. For the broader market, it indicates continued demand for specialized IT systems design and enterprise delivery expertise. Regarding small businesses, while this specific award was not a set-aside, it creates opportunities for them to act as subcontractors to the prime. The extent of this subcontracting will depend on Highlight Technologies' strategy and the contract's specific clauses regarding small business utilization, potentially impacting the small business IT ecosystem.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70SBUR21R00000007

Offers Received: 35

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Highlight Technologies Inc.

Address: 9990 FAIRFAX BLVD STE 350, FAIRFAX, VA, 22030

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $112,408,958

Exercised Options: $86,974,481

Current Obligation: $86,974,481

Actual Outlays: $60,420,785

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 75N98119D00020

IDV Type: GWAC

Timeline