Commerce awarded $26.6M to Reed Technology for document processing, a sole-source contract

Contract Overview

Contract Amount: $26,555,712 ($26.6M)

Contractor: Reed Technology and Information Services LLC

Awarding Agency: Department of Commerce

Start Date: 2017-02-01

End Date: 2018-01-31

Contract Duration: 364 days

Daily Burn Rate: $73.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF PADACAP CONTRACT (RTIS) DOC50PAPT1500003 FRONT END PROCESSING/INDEX&SCANNING

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22206

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $26.6 million to REED TECHNOLOGY AND INFORMATION SERVICES LLC for work described as: IGF::OT::IGF PADACAP CONTRACT (RTIS) DOC50PAPT1500003 FRONT END PROCESSING/INDEX&SCANNING Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. The contract value of $26.6M for a one-year period suggests a high per-unit cost for scanning and indexing. 3. Limited competition may have led to a higher price than if multiple vendors had bid. 4. The service category (publishing) is broad, and the specific needs of the USPTO are key to assessing value. 5. Performance period of one year with no options limits long-term predictability but allows for re-evaluation. 6. The contractor, Reed Technology and Information Services LLC, has a history with government contracts, but specific performance on this contract needs review.

Value Assessment

Rating: fair

The contract value of $26.6 million for a 364-day period for front-end processing, indexing, and scanning services appears high. Without specific metrics on volume (e.g., documents processed per day or per dollar), it is difficult to benchmark against similar contracts. However, given the sole-source nature, there is a risk that the pricing may not reflect the most competitive market rates. Further analysis of the scope of work and the volume of documents handled is necessary to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or proprietary technology required for the service, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to a higher cost for taxpayers.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competitive negotiation. This can result in taxpayers paying more for services than they might if multiple vendors were vying for the contract.

Public Impact

The U.S. Patent and Trademark Office (USPTO) benefits from efficient processing of its documents, crucial for patent and trademark applications. Services delivered include front-end processing, indexing, and scanning, which are essential for digitizing and managing large volumes of intellectual property-related paperwork. The geographic impact is primarily within the USPTO's operations, likely supporting its facilities in Virginia. Workforce implications are indirect, potentially impacting the need for internal USPTO staff for these tasks and supporting the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
High contract value for a one-year term suggests potential for cost overruns or inefficiencies.
The specific nature of 'front end processing' is broad and could encompass various levels of complexity and cost.
No options exercised, meaning the contract duration is fixed and may require a new procurement soon.

Positive Signals

Contract awarded to a known entity (Reed Technology and Information Services LLC) which may imply a level of established capability.
The contract addresses a core operational need for the USPTO in document management.
Firm Fixed Price contract type helps to control costs if the scope is well-defined.
The contract is for a defined period, allowing for reassessment of needs and vendor performance.

Sector Analysis

The document processing and information services sector is a significant part of the broader business services industry. This contract falls under the 'All Other Publishers' NAICS code (511199), which is somewhat unusual for a service contract focused on scanning and indexing. Typically, such services might fall under data processing, hosting, and related services (518210) or document preparation services (561410). The value of this contract, $26.6 million for one year, is substantial for a niche service, suggesting a high volume of documents processed by the USPTO. Comparable spending benchmarks would ideally look at other federal agencies' spending on large-scale document digitization and management contracts.

Small Business Impact

This contract was awarded to Reed Technology and Information Services LLC and does not indicate any small business set-aside provisions. As a sole-source award, there were no opportunities for small businesses to compete directly for the prime contract. There is no information provided regarding subcontracting plans or goals for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, though the prime contractor's own subcontracting practices would determine any indirect effects.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Commerce's Office of the Inspector General (OIG) and the contracting officers within the U.S. Patent and Trademark Office (USPTO). The contract's firm fixed-price nature provides some cost control, but oversight would focus on ensuring the contractor meets the defined scope of work, quality standards, and delivery timelines. Transparency is limited due to the sole-source nature, but contract performance data and any audit reports would be key accountability measures.

Related Government Programs

USPTO Records Management
Federal Document Digitization Programs
Information Technology Services for Government Agencies
Contracting for Administrative Support Services

Risk Flags

Sole-source award
Lack of competition
Potentially high cost due to non-competitive nature
Unclear performance metrics from provided data
Unusual NAICS code classification

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $26.6 million to REED TECHNOLOGY AND INFORMATION SERVICES LLC. IGF::OT::IGF PADACAP CONTRACT (RTIS) DOC50PAPT1500003 FRONT END PROCESSING/INDEX&SCANNING

Who is the contractor on this award?

The obligated recipient is REED TECHNOLOGY AND INFORMATION SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2017-02-01. End: 2018-01-31.

What is the specific volume of documents processed under this contract, and how does this volume influence the per-unit cost?

The provided data does not specify the volume of documents processed under this contract. The total award amount is $26,555,712.01 for a 364-day period. To determine the per-unit cost, we would need the total number of documents scanned, indexed, and processed. For example, if 10 million documents were processed, the cost per document would be approximately $2.66. If 50 million documents were processed, the cost per document would be approximately $0.53. Without the volume, a meaningful per-unit cost benchmark against industry standards or other government contracts is impossible. This lack of detail hinders a thorough value-for-money assessment.

What is the justification for awarding this contract on a sole-source basis to Reed Technology and Information Services LLC?

The justification for a sole-source award typically involves demonstrating that only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, compatibility with existing systems, or urgent and compelling circumstances. For this contract, the specific justification from the Department of Commerce's U.S. Patent and Trademark Office (USPTO) is not detailed in the provided data. A thorough review would require accessing the Justification and Approval (J&A) document associated with this sole-source procurement to understand the rationale and ensure it meets federal acquisition regulations.

How does the $26.6 million contract value compare to historical spending by the USPTO for similar document processing services?

The provided data indicates a single contract award of $26.6 million for a one-year period (2017-2018). To compare historical spending, we would need access to previous contract awards for similar services by the USPTO. Analyzing spending patterns over several years, including the number of contracts, their values, and the vendors involved, would reveal trends. If the USPTO has consistently awarded large, sole-source contracts for this service, it might indicate a long-term reliance on a specific vendor or a persistent lack of competitive opportunities. Conversely, a shift towards competitive bidding or a decrease in spending could signal changes in strategy or efficiency.

What are the specific performance metrics and quality standards outlined in the contract, and how was the contractor's performance measured?

The provided data does not include the specific performance metrics or quality standards defined within the contract's Statement of Work (SOW). A comprehensive assessment of contractor performance requires reviewing the SOW, which would detail requirements such as accuracy rates for indexing, turnaround times for scanning, data security protocols, and acceptable error thresholds. Furthermore, information on how the USPTO monitored and evaluated Reed Technology and Information Services LLC's adherence to these standards throughout the contract period (February 1, 2017, to January 31, 2018) is crucial. Without this performance data, it's impossible to judge the effectiveness and quality of the services rendered.

What is the nature of the 'front end processing' service, and does the NAICS code '511199' (All Other Publishers) accurately reflect this service?

The term 'front end processing' in the context of document management typically refers to the initial stages of handling physical or digital documents before they are fully indexed, stored, or archived. This can include tasks like receiving, sorting, logging, preparing documents for scanning (e.g., removing staples, repairing pages), and potentially initial data capture or verification. The NAICS code 511199, 'All Other Publishers,' is generally associated with businesses primarily engaged in publishing books, newspapers, magazines, and other periodicals. It is an unusual classification for a document scanning and indexing service contract. More fitting NAICS codes might include 561410 (Document Preparation Services) or 518210 (Data Processing, Hosting, and Related Services). The discrepancy suggests either a unique aspect of the service or a potentially misapplied classification, which could obscure comparisons with similar services under more standard codes.

Industry Classification

NAICS: Information › Newspaper, Periodical, Book, and Directory Publishers › All Other Publishers

Product/Service Code: BOOKS, MAPS, OTHER PUBLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Reed Elsevier Group PLC (UEI: 230792756)

Address: 7 WALNUT GROVE DR, HORSHAM, PA, 19044

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

Financial Breakdown

Contract Ceiling: $26,555,712

Exercised Options: $26,555,712

Current Obligation: $26,555,712

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DOC50PAPT1500003

IDV Type: IDC

Timeline