DOJ's $40M IT contract with Chenega Government Consulting shows fair competition and potential value concerns

Contract Overview

Contract Amount: $40,127,648 ($40.1M)

Contractor: Chenega Government Consulting, LLC

Awarding Agency: Department of Justice

Start Date: 2012-03-20

End Date: 2017-09-30

Contract Duration: 2,020 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CT::IGF CRITICAL FUNCTION. (IT FSS REQUIREMENT)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $40.1 million to CHENEGA GOVERNMENT CONSULTING, LLC for work described as: IGF::CT::IGF CRITICAL FUNCTION. (IT FSS REQUIREMENT) Key points: 1. Contract awarded through full and open competition, indicating a broad market search. 2. Pricing appears reasonable when benchmarked against similar IT services contracts. 3. The contract's duration and delivery order structure suggest potential for scope creep. 4. Performance context is limited, making a definitive value-for-money assessment challenging. 5. Sector positioning is within IT services, a common area for federal procurement. 6. Risk indicators include the use of Time and Materials pricing, which can inflate costs if not managed closely.

Value Assessment

Rating: fair

The contract's total value of approximately $40 million over five years places it in the mid-tier range for IT services. Benchmarking against similar Computer Systems Design Services contracts suggests that the overall pricing is within an acceptable range. However, the use of Time and Materials (T&M) pricing, while common for IT services, introduces a risk of cost overruns if not meticulously managed and monitored by the agency. Without detailed performance metrics, a precise value-for-money assessment is difficult, but the competitive award suggests a baseline level of fairness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, specific sources may have been excluded at some point. The presence of 5 bidders suggests a moderate level of competition. This level of competition is generally positive for price discovery, as it encourages bidders to offer competitive rates. However, the 'after exclusion of sources' clause warrants further investigation to understand if it limited the competitive landscape more than a standard full and open process.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down prices compared to a sole-source or limited competition scenario. The inclusion of multiple bidders helps ensure that the government is not overpaying for the services rendered.

Public Impact

The primary beneficiaries are the Department of Justice and its component agencies, particularly the Drug Enforcement Administration, receiving critical IT support. Services delivered include computer systems design, crucial for maintaining and upgrading the agency's technological infrastructure. The geographic impact is primarily within Virginia, where the contractor is located, but the IT services support national operations. Workforce implications include the employment of IT professionals by the contractor, contributing to the federal IT services labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure.
The 'after exclusion of sources' clause in the competition type could indicate a less robust competitive environment than initially appears.
Limited public information on specific performance metrics makes it hard to gauge true value for money.
The contract's significant duration (5 years) increases the risk of technology obsolescence or changing agency needs not being met efficiently.

Positive Signals

Awarded through a full and open competitive process, ensuring a wide range of potential offerors.
Multiple bidders (5) participated, suggesting a healthy level of interest and competition.
The contractor, Chenega Government Consulting, LLC, has experience in government contracting.
The contract supports critical IT functions for a major federal law enforcement agency.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services. This sector is a significant component of federal IT spending, characterized by a mix of large prime contractors and specialized small businesses. Federal agencies rely heavily on these services for everything from system development and integration to maintenance and support. Comparable spending benchmarks in this area vary widely based on the complexity and duration of the services, but contracts in the tens of millions are common for large-scale IT support.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Without specific subcontracting goals or reporting, it's difficult to assess the broader implications for small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Drug Enforcement Administration. The contract's performance would be monitored against the terms and conditions outlined in the delivery order. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or reported.

Related Government Programs

IT Services Contracts
Computer Systems Design Services
Department of Justice IT Procurement
Drug Enforcement Administration Support Services
Information Technology Professional Services

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited transparency on specific performance metrics.
Ambiguity in 'after exclusion of sources' competition type.
Long contract duration may lead to technology obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $40.1 million to CHENEGA GOVERNMENT CONSULTING, LLC. IGF::CT::IGF CRITICAL FUNCTION. (IT FSS REQUIREMENT)

Who is the contractor on this award?

The obligated recipient is CHENEGA GOVERNMENT CONSULTING, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Drug Enforcement Administration).

What is the total obligated amount?

The obligated amount is $40.1 million.

What is the period of performance?

Start: 2012-03-20. End: 2017-09-30.

What is Chenega Government Consulting, LLC's track record with federal IT contracts, particularly with the Department of Justice?

Chenega Government Consulting, LLC has a notable history of federal contracting, including significant work with various agencies within the Department of Justice. Their portfolio often includes IT services, logistics, and professional support. For the Drug Enforcement Administration (DEA), specifically, this contract represents a substantial engagement in IT systems design. Analyzing their broader contract history reveals a pattern of securing and performing on large-value government contracts. However, a deeper dive into past performance reviews, any past disputes, or contract terminations would be necessary for a comprehensive assessment of their reliability and quality of service delivery specifically for IT systems design.

How does the $40.1 million total award value compare to similar IT systems design contracts awarded by the DEA or other DOJ components?

The $40.1 million total award value for this 5-year contract (2012-2017) positions it as a significant, mid-to-large-sized IT services contract within the Department of Justice. When benchmarked against similar Computer Systems Design Services contracts awarded by the DEA or other DOJ bureaus during that period, this value appears to be within a reasonable range, especially considering the scope of supporting critical IT functions. Contracts for system design, integration, and maintenance can easily reach these figures, particularly for agencies with complex operational needs like law enforcement. Without access to the specific Statement of Work (SOW) and the detailed technical requirements, a precise comparison is challenging, but the overall value is not an outlier for the type of service and agency involved.

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

The primary risk associated with the Time and Materials (T&M) pricing structure is the potential for cost escalation and lack of cost certainty for the government. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual time and materials used. If not rigorously managed, this can lead to inefficiencies, scope creep, and inflated costs, as the contractor may have less incentive to control hours or material expenses. For this contract, the risk is that the $40.1 million ceiling could be exceeded if labor hours or material costs are not closely monitored and controlled by the DEA. Effective oversight, detailed task orders, and regular performance reviews are crucial to mitigate these risks and ensure value for money.

How effective was the 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing for this contract?

The 'Full and Open Competition After Exclusion of Sources' approach suggests that while the competition was intended to be broad, certain potential sources were deliberately excluded. This can be done for various legitimate reasons, such as ensuring specific capabilities or past performance, or due to security requirements. While 5 bidders participated, indicating some level of competition, the exclusion of sources inherently limits the pool of potential offerors. The effectiveness in ensuring competitive pricing is therefore somewhat constrained compared to a purely 'full and open' competition without exclusions. The pricing achieved would need to be evaluated against the specific reasons for exclusion and the capabilities of the remaining bidders to determine if the optimal competitive price was secured.

What historical spending patterns exist for IT systems design services at the DEA, and how does this contract fit within them?

Historical spending patterns for IT systems design services at the DEA, and indeed across the Department of Justice, generally show a consistent need for external support due to the complexity and evolving nature of technology. Agencies often contract for these services to augment internal capabilities, manage large-scale system upgrades, or implement new technological solutions. This $40.1 million contract, awarded between 2012 and 2017, fits within this pattern as a significant investment in IT infrastructure during a period of ongoing technological advancement. It reflects the agency's reliance on specialized IT support to maintain its operational effectiveness. Analyzing prior and subsequent contracts for similar services would reveal trends in spending levels, types of services procured, and contractor choices.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Chenega Corporation (UEI: 622692994)

Address: 609 INDEPENDENCE PKWY STE 210, CHESAPEAKE, VA, 23320

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

Financial Breakdown

Contract Ceiling: $42,641,546

Exercised Options: $40,397,372

Current Obligation: $40,127,648

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS06F0705Z

IDV Type: GWAC

Timeline