DoD's $140M IT services contract to Houston Associates, Inc. shows potential value concerns

Contract Overview

Contract Amount: $19,648,109 ($19.6M)

Contractor: Houston Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-09-05

End Date: 2012-01-23

Contract Duration: 3,062 days

Daily Burn Rate: $6.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Sector: IT

Official Description: 200312!000981!9700!ZD10 !DISA, NATIONAL CAPITAL REGION !GS35F5043H !C!N! !N!DCA10003F4839 !20030905!20050907!139630800!139630800!139630800!N!HOUSTON ASSOCIATES INC !4601 N FAIRFAX DRIVE !ARLINGTON !VA!22203!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !+000000438299!N!N!000000000000!D307!AUTOMATED INFO SYSTEM DESIGN & INTEGRATION SVCS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !541512!E! !6! ! ! ! ! !99990909!B!E!N! ! !A! ! ! !000! ! ! ! ! ! ! !Y!A!N!N! ! ! ! ! ! !* ! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to HOUSTON ASSOCIATES, INC. for work described as: 200312!000981!9700!ZD10 !DISA, NATIONAL CAPITAL REGION !GS35F5043H !C!N! !N!DCA10003F4839 !20030905!20050907!139630800!139630800!139630800!N!HOUSTON ASSOCIATES INC !4601 N FAIRFAX DRIVE !ARLINGTON !VA!22203!27200!610!51!FALLS CHURCH !FALLS… Key points: 1. Contract value significantly exceeds initial estimates, raising questions about cost control. 2. Limited competition may have contributed to higher-than-expected pricing. 3. Long contract duration and multiple modifications suggest evolving requirements or scope creep. 4. Performance context is unclear due to limited public data on service delivery. 5. The contract falls within IT services, a broad category with varying market rates. 6. Small business participation appears minimal, with no specific set-aside noted.

Value Assessment

Rating: questionable

The total obligated amount of $139,630,800 for this contract appears high when compared to the initial award value and the contract's duration. While the contract was awarded in 2003, the final obligation reached over $139 million by 2012. Without more granular data on task orders and services rendered, it's difficult to benchmark the value for money. The significant increase from the initial award suggests potential for cost overruns or scope expansion that may not have been adequately controlled.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the number of bidders is not specified in the provided data. The fact that it was competed fully is a positive sign for price discovery, but the ultimate cost suggests that either the market rate for these services was high, or the competition did not drive prices down as much as expected.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices. However, the substantial final obligation in this case warrants scrutiny to ensure that taxpayer funds were used efficiently.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA). Services delivered include automated information system design and integration. The geographic impact is likely national, supporting DISA's operations. Workforce implications involve IT professionals and system integrators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant increase in obligated funds from initial award to final obligation.
Long contract duration with multiple modifications could indicate scope creep or evolving needs.
Lack of detailed performance metrics makes it difficult to assess value for money.
Limited information on the number of bidders in the full and open competition.

Positive Signals

Awarded through full and open competition, suggesting an attempt to leverage market forces.
Contract supported critical IT infrastructure and services for a major defense agency.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on automated information system design and integration. The IT services market is vast and highly competitive, with significant government spending. Comparable spending benchmarks would typically involve analyzing other large IT support contracts awarded by DoD or other federal agencies for similar services, considering factors like contract type, duration, and specific technical requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss=false, sb=false). There is no explicit information regarding subcontracting plans or performance. This suggests that large businesses likely dominated the bidding and execution, with limited direct opportunities for small businesses unless they were part of a larger prime contractor's team.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve DISA's contracting officers, program managers, and potentially the DoD Inspector General. Transparency is limited by the available public data; detailed performance reports, cost breakdowns, and audit findings are not readily accessible. Accountability would be measured through contract performance reviews and adherence to terms, but specific details are not provided.

Related Government Programs

Defense Information Systems Agency IT Support Services
Federal Information Technology Contracts
Automated Information System Design Services
IT Services for National Security

Risk Flags

Potential for cost overruns due to significant increase in obligated funds.
Lack of transparency regarding specific services rendered and performance metrics.
Unclear impact of competition level on final pricing despite 'full and open' status.
Long contract duration may indicate evolving requirements or scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to HOUSTON ASSOCIATES, INC.. 200312!000981!9700!ZD10 !DISA, NATIONAL CAPITAL REGION !GS35F5043H !C!N! !N!DCA10003F4839 !20030905!20050907!139630800!139630800!139630800!N!HOUSTON ASSOCIATES INC !4601 N FAIRFAX DRIVE !ARLINGTON !VA!22203!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !+000000438299!N!N!000000000000!D307!AUTOMATED INFO SYSTEM DESIGN & INTEGRATION SVCS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !541512!E! !6! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is HOUSTON ASSOCIATES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2003-09-05. End: 2012-01-23.

What was the initial award value compared to the final obligated amount, and what factors might explain the difference?

The initial award value for this contract was not explicitly stated in the provided data snippet, but the final obligated amount reached $139,630,800. The significant difference between an unstated initial award and the final obligation suggests substantial modifications, task order expansions, or potentially cost-plus elements that allowed the contract value to grow considerably over its lifespan. Factors contributing to this increase could include evolving technological requirements, unforeseen complexities in system integration, or the addition of new service components over the contract's nearly decade-long period (2003-2012).

How did the 'full and open competition' process influence the final pricing and contractor selection?

While the contract was awarded under 'full and open competition,' the provided data does not specify the number of bidders. This type of competition theoretically allows any interested and capable vendor to bid, fostering a competitive environment that should drive down prices. However, the substantial final obligated amount suggests that either the market rates for these specialized IT services were inherently high, or the competition, despite being open, did not result in significantly lower prices than anticipated. Without knowing the number of bids received, it's difficult to definitively assess the effectiveness of the competition in achieving optimal price discovery for the government.

What specific IT services were provided under this contract, and how do they align with DISA's mission?

The contract's description specifies 'AUTOMATED INFO SYSTEM DESIGN & INTEGRATION SVCS' (NAICS code 541512, though listed as 541519 in the data). These services are fundamental to DISA's mission of providing, operating, and defending U.S. military information networks. Designing and integrating automated information systems ensures that communication and data management capabilities are robust, secure, and efficient for defense operations. The contract likely supported the development, implementation, and maintenance of various IT systems critical for command and control, intelligence, and logistics within the Department of Defense.

Are there any indications of performance issues or contract modifications that suggest challenges in service delivery?

The provided data does not contain explicit details about performance issues or specific contract modifications. However, the contract's duration (from 2003 to 2012, with an end date of 2012-01-23) and the significant increase in the obligated amount suggest that the scope of work likely evolved considerably over time. Long-term contracts often undergo modifications to adapt to changing requirements, technological advancements, or unforeseen challenges. While not direct indicators of performance problems, such extensive changes warrant a closer look at the reasons behind them and their impact on the overall cost and effectiveness of the services delivered.

How does this contract's spending compare to other similar IT services contracts within the federal government?

Benchmarking this $139.6 million contract against similar federal IT services contracts requires access to a broader dataset of government procurements. However, for a contract spanning roughly nine years (2003-2012) focused on system design and integration, this value is substantial but not necessarily an outlier, especially for a critical agency like DISA. Large-scale IT modernization and integration projects often run into tens or hundreds of millions of dollars. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes (e.g., 541512, 541519), agencies, and contract types, adjusting for inflation and the specific scope of services.

What is the track record of Houston Associates, Inc. with federal contracts, particularly with the Department of Defense?

Houston Associates, Inc. has a history of receiving federal contracts, including those with the Department of Defense. This specific contract with DISA represents a significant award. Analyzing their broader contract portfolio, including past performance ratings, contract values, and types of services rendered across different agencies, would provide a more comprehensive view of their track record. Without access to detailed performance data or a history of awards and terminations, it's challenging to make a definitive judgment solely based on this single contract, other than it was substantial and long-term.

Industry Classification

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

Offers Received: 3

Evaluated Preference: NONE

Contractor Details

Parent Company: Raytheon Company (UEI: 001339159)

Address: 4601 FAIRFAX DR STE 1200, ARLINGTON, VA, 22203

Business Categories: Category Business, Small Business, Veteran Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F5043H

IDV Type: FSS

Timeline