Agriculture's $32.7M IT contract for application development shows fair value with 3 bidders

Contract Overview

Contract Amount: $32,740,773 ($32.7M)

Contractor: Creative Information Technology, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2017-08-15

End Date: 2023-03-11

Contract Duration: 2,034 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CL::IGF APPLICATION DEVELOPMENT SUBSIDY/DISASTER

Place of Performance

Location: KANSAS CITY, CLAY County, MISSOURI, 64117

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $32.7 million to CREATIVE INFORMATION TECHNOLOGY, INC. for work described as: IGF::CL::IGF APPLICATION DEVELOPMENT SUBSIDY/DISASTER Key points: 1. The contract's value appears reasonable given the duration and scope of IT application development services. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The use of Time and Materials pricing introduces some cost variability, a potential risk indicator. 4. This contract supports critical financial operations within the Department of Agriculture. 5. The vendor has a track record of delivering IT services, but specific performance metrics are not detailed here. 6. The contract's duration of over 2000 days indicates a long-term need for these IT services.

Value Assessment

Rating: fair

The contract's total value of approximately $32.7 million over its lifespan suggests a moderate annual spend. Benchmarking against similar IT application development contracts is challenging without more specific service details. However, the presence of three bidders in a full and open competition indicates that the pricing was likely competitive. The Time and Materials (T&M) pricing structure, while common for IT services, can lead to cost overruns if not carefully managed, which warrants a 'fair' assessment rather than 'good' without further performance data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. Three bidders participated in this competition, which is a moderate level of engagement. While more bidders could potentially drive prices lower, three offers generally indicate sufficient market interest and a reasonable degree of price discovery. The agency's choice of full and open competition is a positive sign for market engagement.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by preventing inflated prices and encouraging vendors to offer their best value.

Public Impact

The primary beneficiaries are the internal users within the Department of Agriculture who rely on the applications developed and maintained under this contract. The services delivered include computer systems design and related services, crucial for modernizing and supporting financial management systems. The geographic impact is primarily within the Department of Agriculture's operational footprint, likely supporting national functions. Workforce implications include the employment of IT professionals by the contractor to deliver these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost uncertainty if not managed rigorously.
Lack of detailed performance metrics makes it difficult to assess the true value and efficiency of the services provided.
The long duration of the contract (2034 days) could lead to technology obsolescence if not actively managed.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract supports essential IT functions for a major federal agency.
The vendor, CREATIVE INFORMATION TECHNOLOGY, INC., has secured this contract, suggesting a level of established capability.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and related services. The IT services market is vast and highly competitive, with numerous companies offering application development and maintenance. The total federal spending on IT services is in the hundreds of billions annually. This contract represents a small fraction of that overall spending but is significant for the specific needs of the Department of Agriculture's financial systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor is likely a mid-to-large size firm capable of handling a contract of this magnitude. The absence of a small business set-aside means opportunities for small business participation would depend on the prime contractor's subcontracting strategy, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Agriculture's Office of the Chief Financial Officer, which is the specific agency component awarding the contract. Accountability measures are usually embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated by the contract's existence in public databases, though detailed performance reports may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Application Development
Computer Systems Design Services
Department of Agriculture Financial Systems Modernization
Time and Materials IT Contracts
Full and Open Competition IT Awards

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of technology obsolescence over the contract's long duration.
Need for robust government oversight to manage vendor performance and hours.
Limited insight into specific performance metrics and value achieved.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $32.7 million to CREATIVE INFORMATION TECHNOLOGY, INC.. IGF::CL::IGF APPLICATION DEVELOPMENT SUBSIDY/DISASTER

Who is the contractor on this award?

The obligated recipient is CREATIVE INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $32.7 million.

What is the period of performance?

Start: 2017-08-15. End: 2023-03-11.

What is the track record of CREATIVE INFORMATION TECHNOLOGY, INC. with federal contracts, particularly in application development?

CREATIVE INFORMATION TECHNOLOGY, INC. (CITI) has a history of securing federal contracts, primarily within the IT services domain. While specific details on past performance for this particular application development contract are not provided in the summary data, CITI's ability to win this $32.7 million award suggests they possess the necessary qualifications and experience. Federal procurement databases often contain past performance evaluations, which would offer a more granular view of their success rates, client satisfaction, and adherence to schedules and budgets on previous engagements. Without access to those detailed records, we infer capability from winning this significant contract.

How does the $32.7 million total contract value compare to similar IT application development contracts within the federal government?

The $32.7 million total contract value over its approximately 5.7-year duration (2034 days) translates to an average annual value of roughly $5.7 million. This figure is moderate within the broader federal IT landscape. Large-scale enterprise application development programs can easily reach tens or hundreds of millions of dollars. However, for specific departmental financial system support or specialized application development, this value is substantial and indicates a significant undertaking. Comparisons are best made with contracts for similar services (e.g., custom software development, systems integration) awarded to agencies of comparable size and complexity.

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

The primary risk with Time and Materials (T&M) contracts is cost escalation. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure provides flexibility, which is often beneficial for IT projects where the scope may evolve. However, it places a greater burden on the government to closely monitor labor hours, material costs, and overall project progress to prevent inefficiencies or overcharging. Without robust oversight and clear task definitions, T&M contracts can become significantly more expensive than initially anticipated.

How effective is the 'full and open competition' approach in ensuring value for money for this specific IT contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money, as it maximizes the pool of potential bidders and encourages competitive pricing. In this case, with three bidders participating, there was a reasonable level of competition. This suggests that CREATIVE INFORMATION TECHNOLOGY, INC. likely offered a competitive price and solution. However, the ultimate effectiveness also depends on the clarity of the solicitation requirements, the evaluation criteria used by the Department of Agriculture, and the contractor's ability to deliver on its promises efficiently. The moderate number of bidders implies the market is responsive but perhaps not as crowded as for more commoditized IT services.

What are the historical spending patterns for application development services within the Department of Agriculture?

Analyzing historical spending patterns for application development within the Department of Agriculture (USDA) would require access to detailed budget and contract data over multiple fiscal years. Generally, large federal agencies like the USDA have consistent needs for IT modernization and application support due to evolving regulatory requirements, technological advancements, and the need to improve internal efficiencies. Spending on application development can fluctuate based on specific modernization initiatives, system replacements, or the introduction of new programs. This $32.7 million contract suggests a sustained investment in their IT infrastructure, particularly for financial systems, aligning with typical agency priorities.

What are the potential implications of the contract's long duration (2034 days) on technology relevance and vendor performance?

A contract duration of 2034 days (approximately 5.7 years) for IT application development presents both opportunities and risks. On the positive side, it allows for long-term planning, stable development cycles, and the potential for deep institutional knowledge to be built by the contractor. However, the rapid pace of technological change in IT means that systems and development approaches can become outdated within such a timeframe. This necessitates proactive contract management, including provisions for technology refresh, agile adaptation, and potentially phased re-competitions or modifications to ensure the developed applications remain relevant, secure, and efficient throughout the contract's life.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: AG-3144-S-17-0017

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Creative Information Technology Inc.

Address: 7799 LEESBURG PIKE STE 500N, FALLS CHURCH, VA, 22043

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,740,773

Exercised Options: $32,740,773

Current Obligation: $32,740,773

Actual Outlays: $24,818,752

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200016W

IDV Type: GWAC

Timeline