Commerce Dept. awards $9.9M for nautical charting system integration, raising questions on competition and value

Contract Overview

Contract Amount: $9,892,056 ($9.9M)

Contractor: Software Performance Systems, Inc.

Awarding Agency: Department of Commerce

Start Date: 2004-09-28

End Date: 2010-09-30

Contract Duration: 2,193 days

Daily Burn Rate: $4.5K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INTEGRATION AND OPERATION OF THE NAUTICAL CHARTING SYSTEM

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20901

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $9.9 million to SOFTWARE PERFORMANCE SYSTEMS, INC. for work described as: INTEGRATION AND OPERATION OF THE NAUTICAL CHARTING SYSTEM Key points: 1. The contract's non-competitive nature warrants scrutiny regarding potential overpayment and lack of market-driven pricing. 2. Limited competition suggests potential risks to innovation and cost-efficiency over the contract's lifespan. 3. The fixed-price contract type offers some cost certainty but may not fully capture evolving system needs. 4. Performance duration of nearly six years indicates a long-term reliance on the selected vendor. 5. The 'Other Computer Related Services' NAICS code is broad, potentially obscuring the specific nature of the work performed. 6. Lack of small business participation noted, suggesting missed opportunities for economic inclusion.

Value Assessment

Rating: questionable

Benchmarking the value of this $9.9 million contract is challenging due to the lack of competitive bids. Without comparable contract data or market analysis, it's difficult to ascertain if the pricing reflects fair market value. The fixed-price nature provides some cost control, but the absence of competition raises concerns about whether the government secured the best possible price and quality for the integration and operation of the nautical charting system. Further analysis would be needed to compare the per-unit cost of services or deliverables against industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that a full and open competition was not conducted. The specific reasons for this sole-source award are not detailed in the provided data, but typically such awards are made when only one source is capable of meeting the requirement, or in urgent situations. The lack of multiple bidders means there was no direct price comparison or incentive for vendors to offer their most competitive rates, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to drive down prices, potentially resulting in taxpayer funds being used less efficiently. This can mean less value for money compared to contracts that undergo a competitive bidding process.

Public Impact

The primary beneficiary is the National Oceanic and Atmospheric Administration (NOAA), which relies on the nautical charting system for its operations. The contract supports the integration and ongoing operation of a critical system for maritime navigation and safety. Geographic impact is nationwide, as NOAA's charting responsibilities cover U.S. waters. The contract likely impacts a specialized workforce within the IT and maritime services sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award raises concerns about price reasonableness and potential lack of innovation.
Broad NAICS code may obscure specific service costs and performance metrics.
Long contract duration without clear performance benchmarks could lead to cost overruns if not managed tightly.
Absence of small business participation limits opportunities for smaller, potentially more agile firms.

Positive Signals

Fixed-price contract offers some cost predictability for the government.
The contract addresses a critical government function related to national safety and infrastructure.
The vendor has been awarded a contract, suggesting they possess the necessary capabilities for this specialized service.

Sector Analysis

The IT services sector, particularly specialized software integration and operation, is a significant area of federal spending. This contract falls under 'Other Computer Related Services,' a broad category that can encompass a wide range of IT support. Federal spending in this area often involves complex systems requiring specialized expertise. Benchmarking this contract's value is difficult without more specific details on the services provided, but IT services represent billions of dollars annually across various government agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that opportunities for small business participation, either as prime contractors or subcontractors, were not explicitly pursued or mandated. Consequently, this contract may not have contributed to the government's small business contracting goals and missed potential benefits from the innovation and specialized services that small businesses can offer.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Oceanic and Atmospheric Administration (NOAA) within the Department of Commerce. As a delivery order under a larger contract vehicle (likely an IDIQ), oversight would focus on the specific deliverables, performance metrics, and adherence to the terms and conditions of the order. Transparency is limited by the non-competitive nature of the award; however, standard contract management processes and potentially the agency's Inspector General would provide oversight.

Related Government Programs

Nautical Charting System Modernization
Maritime Domain Awareness Programs
Geospatial Information Services
NOAA IT Infrastructure Support
Federal Software Development Contracts

Risk Flags

Non-competitive award
Lack of transparency in justification for sole-source
Potential for uncompetitive pricing
Limited performance data available for assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $9.9 million to SOFTWARE PERFORMANCE SYSTEMS, INC.. INTEGRATION AND OPERATION OF THE NAUTICAL CHARTING SYSTEM

Who is the contractor on this award?

The obligated recipient is SOFTWARE PERFORMANCE SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2004-09-28. End: 2010-09-30.

What specific services are included under 'INTEGRATION AND OPERATION OF THE NAUTICAL CHARTING SYSTEM'?

The provided data offers limited detail on the specific services encompassed by 'INTEGRATION AND OPERATION OF THE NAUTICAL CHARTING SYSTEM.' The NAICS code 541519 ('Other Computer Related Services') is very broad. Typically, integration services involve combining different software and hardware components into a cohesive system, while operation includes the day-to-day management, maintenance, and support of that system. For a nautical charting system, this could involve software development, database management, network infrastructure support, system upgrades, data processing, and ensuring the system's availability and reliability for NOAA's mission-critical functions. Without a detailed statement of work, the exact scope and cost breakdown remain unclear.

Why was this contract awarded on a non-competitive basis?

The data explicitly states this was a 'NON-COMPETITIVE DELIVERY ORDER' (ct: NON-COMPETITIVE DELIVERY ORDER). Federal procurement regulations allow for non-competitive awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Other justifications can include specific exceptions to the general requirement for full and open competition. Without further documentation from the agency (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the precise reason for bypassing a competitive process remains unknown. This lack of transparency makes it difficult to assess if the non-competitive award was appropriate and in the government's best interest.

How does the $9.9 million contract value compare to similar federal IT service contracts?

Directly comparing the $9.9 million value of this contract to similar federal IT service contracts is challenging without knowing the specific services rendered and the contract duration. The contract spans from September 28, 2004, to September 30, 2010, a period of approximately six years. If this $9.9 million represents the total value over six years, the average annual spend is roughly $1.65 million. This figure is moderate for federal IT contracts, especially those involving system integration and long-term operations. However, the lack of competition means this value might not represent the most cost-effective outcome achievable through a competitive bidding process. Benchmarking would require detailed analysis of comparable contracts for similar IT services, considering factors like scope, complexity, and vendor rates.

What are the potential risks associated with a sole-source IT contract of this magnitude?

Sole-source IT contracts, especially those valued at $9.9 million over six years, carry several risks. Firstly, the absence of competition can lead to inflated prices, as the contractor faces less pressure to offer competitive rates. Secondly, it can stifle innovation, as the government is reliant on a single vendor's technological roadmap and solutions. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers later. Performance can also be a concern; without competitive pressure, a vendor might be less motivated to deliver exceptional service. Finally, a non-competitive award can raise perceptions of impropriety or favoritism, even if the award was technically compliant with regulations.

What is the historical spending pattern for the Nautical Charting System or similar NOAA IT projects?

The provided data only details a single contract award of $9.9 million for the integration and operation of the Nautical Charting System from 2004 to 2010. To understand historical spending patterns, one would need to examine NOAA's procurement history over a longer period, looking at previous contracts for this system, related modernization efforts, or other IT infrastructure support. Analyzing trends in contract values, competition levels, and types of services procured would reveal whether spending has increased or decreased, if competition has changed, and how the agency has evolved its approach to acquiring IT services for critical systems like nautical charting. This single data point does not provide sufficient information to establish a historical trend.

What is the track record of SOFTWARE PERFORMANCE SYSTEMS, INC. in performing federal IT contracts?

The provided data indicates that SOFTWARE PERFORMANCE SYSTEMS, INC. was awarded this $9.9 million non-competitive delivery order for IT services. To assess their track record, one would need to review their contract history across various federal agencies. Key aspects to examine would include the number and value of contracts awarded, the types of services performed, contract performance ratings (if available), and any past performance issues or disputes. A comprehensive review would involve searching federal procurement databases like SAM.gov or FPDS-NG for all contracts awarded to this vendor, analyzing their performance history, and looking for any red flags or indicators of consistent success in delivering IT solutions to the government.

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: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 2011 CRYSTAL DR, ARLINGTON, VA, 08

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $9,900,000

Exercised Options: $9,892,056

Current Obligation: $9,892,056

Parent Contract

Parent Award PIID: GS35F5433H

IDV Type: FSS

Timeline