Commerce Dept. awards $21.7M for IT systems support, raising value-for-money questions

Contract Overview

Contract Amount: $21,747,451 ($21.7M)

Contractor: Prime Source Technologies, LLC

Awarding Agency: Department of Commerce

Start Date: 2012-10-25

End Date: 2017-10-24

Contract Duration: 1,825 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF AWARD FOR ADMINSTRATIVE TECHNICAL SYSTEMS SUPPORT

Place of Performance

Location: SUITLAND, PRINCE GEORGES County, MARYLAND, 20746

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $21.7 million to PRIME SOURCE TECHNOLOGIES, LLC for work described as: IGF::OT::IGF AWARD FOR ADMINSTRATIVE TECHNICAL SYSTEMS SUPPORT Key points: 1. The contract's value-for-money is fair, given the extended duration and the nature of administrative IT support. 2. Competition dynamics show a full and open process, which is positive for price discovery. 3. Risk indicators are moderate, with a time-and-materials pricing structure potentially leading to cost overruns if not managed closely. 4. Performance context is for administrative technical systems support, a common but critical function. 5. Sector positioning is within IT services, a large and competitive market. 6. The contract was awarded via a delivery order under a larger IDIQ, suggesting it's part of a broader procurement strategy.

Value Assessment

Rating: fair

The contract's value is assessed as fair. While the total award amount of $21.7 million over five years is substantial, the nature of administrative technical systems support is ongoing and essential. Benchmarking against similar contracts for IT support services indicates that the pricing structure, particularly if time-and-materials, requires diligent oversight to ensure cost-effectiveness. Without specific details on the labor categories and rates, a precise value-for-money assessment is challenging, but the duration suggests a need for sustained support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that it was a delivery order under an IDIQ suggests a pre-competed vehicle was utilized. The number of bidders (5) is a reasonable number for this type of service, suggesting adequate market interest and a competitive process that should have driven reasonable pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality services. This approach ensures that the government is not locked into a single provider and can leverage market forces.

Public Impact

The U.S. Census Bureau benefits from this contract through the provision of essential administrative technical systems support. Services delivered include maintaining and supporting IT systems critical for the bureau's operations. The geographic impact is primarily within Maryland, where the contractor is located and likely where services are performed. Workforce implications include the employment of IT professionals by PRIME SOURCE TECHNOLOGIES, LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time-and-materials pricing can lead to cost overruns if not closely monitored.
The extended duration of the contract (5 years) increases the risk of scope creep or evolving technological needs not being adequately addressed.
Reliance on a single delivery order under a larger IDIQ might limit flexibility if the underlying IDIQ terms are not optimal.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contractor, PRIME SOURCE TECHNOLOGIES, LLC, has a track record of performing government contracts.
The contract supports critical administrative IT functions for the U.S. Census Bureau, ensuring operational continuity.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically 'Other Computer Related Services'. The IT services market is vast and highly competitive, with significant government spending. Contracts for administrative IT support are common across federal agencies, underpinning daily operations. Benchmarks for similar IT support contracts vary widely based on scope, duration, and complexity, but this award appears to be within a typical range for a multi-year, comprehensive support agreement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor is PRIME SOURCE TECHNOLOGIES, LLC. Analysis of subcontracting opportunities for small businesses would require further investigation into the contractor's specific subcontracting plan, if one exists. Without this information, the direct impact on the small business ecosystem is unclear, though larger prime contracts can sometimes create downstream opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Census Bureau's contracting officers and program managers. The time-and-materials pricing structure necessitates close monitoring of labor hours and costs to ensure compliance with contract terms and prevent overspending. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Professional Services
Administrative Support Services
U.S. Census Bureau IT Modernization Efforts
Federal Civilian Agency IT Contracts

Risk Flags

Time and Materials Pricing
Long Contract Duration
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $21.7 million to PRIME SOURCE TECHNOLOGIES, LLC. IGF::OT::IGF AWARD FOR ADMINSTRATIVE TECHNICAL SYSTEMS SUPPORT

Who is the contractor on this award?

The obligated recipient is PRIME SOURCE TECHNOLOGIES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Census Bureau).

What is the total obligated amount?

The obligated amount is $21.7 million.

What is the period of performance?

Start: 2012-10-25. End: 2017-10-24.

What is the track record of PRIME SOURCE TECHNOLOGIES, LLC with federal contracts?

PRIME SOURCE TECHNOLOGIES, LLC has a history of receiving federal contracts. A review of available data indicates they have been awarded multiple contracts across various agencies, primarily in the IT services domain. Their performance history, as reflected in contract databases and past performance evaluations (if publicly available), would provide a clearer picture of their reliability and capability. For this specific contract, the award itself suggests they met the requirements of the full and open competition. Further due diligence would involve examining past performance reviews and any reported issues or successes on similar engagements to fully assess their track record.

How does the pricing structure compare to similar IT support contracts?

The contract utilizes a Time and Materials (T&M) pricing structure. T&M contracts can be cost-effective when the scope of work is not well-defined or is expected to change frequently. However, they carry a higher risk of cost overruns if not managed diligently. Comparing this contract's rates to market benchmarks for similar IT administrative support services in the Maryland region would be necessary for a precise value assessment. Generally, T&M contracts require robust oversight from the government to ensure that hours billed and materials used are reasonable and necessary for the work performed. Without specific rate data, a definitive comparison is difficult, but the T&M nature warrants careful monitoring.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns due to the Time and Materials (T&M) pricing structure. If labor hours are not closely tracked and managed, or if the project scope expands without proper controls, costs can escalate beyond initial estimates. Another risk is the potential for technological obsolescence or the need for evolving IT solutions over the five-year contract duration; the T&M structure might accommodate changes, but it depends on the flexibility of the underlying IDIQ and the contractor's adaptability. Finally, ensuring consistent service quality and performance from the contractor throughout the contract's life is a standard risk for any long-term service contract.

How effective is full and open competition in ensuring value for this type of service?

Full and open competition is generally considered the most effective method for ensuring value for IT support services. It allows a wide range of qualified vendors to compete, driving down prices and encouraging innovation. For administrative technical systems support, where requirements can be standardized to some extent, competition helps establish a market-based price. The fact that five bidders participated suggests a healthy competitive environment. However, the effectiveness also depends on the clarity of the solicitation requirements and the government's ability to evaluate proposals accurately. While competition is a strong indicator of potential value, ongoing performance monitoring remains crucial.

What is the historical spending trend for administrative IT support at the U.S. Census Bureau?

Historical spending trends for administrative IT support at the U.S. Census Bureau would likely show consistent investment in these services, given their critical nature for data collection and analysis. Agencies like the Census Bureau rely heavily on robust IT infrastructure. Spending in this area typically fluctuates based on modernization initiatives, system upgrades, and the overall IT lifecycle. Analyzing past contracts for similar services would reveal whether this $21.7 million award over five years represents an increase, decrease, or stable level of investment compared to previous periods. Such analysis would provide context on the agency's long-term commitment to IT support.

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: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1825 K STREET NW, SUITE 670, WASHINGTON, DC, 20006

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,714,008

Exercised Options: $21,749,635

Current Obligation: $21,747,451

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0480T

IDV Type: FSS

Timeline