FHWA IT Support Contract to INDUS CORPORATION Exceeds $174M, Awarded via Full and Open Competition

Contract Overview

Contract Amount: $271,472,397 ($271.5M)

Contractor: Indus Corporation

Awarding Agency: Department of Transportation

Start Date: 2002-04-15

End Date: 2013-04-24

Contract Duration: 4,027 days

Daily Burn Rate: $67.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: FHWA FEDERAL INFORMATION TECHNOLOGY SUPPORT SERVICES. BASE 2-YEARS TASK A: ESTIMATED COST: $2,675,112.00 AWARD FEE: $139,421.00 ESTIMATED TOTAL: $2,814,533.00 POTENTIAL TOTAL VALUE OF THE CONTRACT: $174,980,989.00

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of Transportation obligated $271.5 million to INDUS CORPORATION for work described as: FHWA FEDERAL INFORMATION TECHNOLOGY SUPPORT SERVICES. BASE 2-YEARS TASK A: ESTIMATED COST: $2,675,112.00 AWARD FEE: $139,421.00 ESTIMATED TOTAL: $2,814,533.00 POTENTIAL TOTAL VALUE OF THE CONTRACT: $174,980,989.00 Key points: 1. The contract's potential value of $174.98 million indicates a significant long-term investment in IT support. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The Cost Plus Award Fee (CPAF) structure allows for performance-based incentives. 4. The long duration (2002-2013) suggests a stable, ongoing need for these services.

Value Assessment

Rating: fair

The base task order cost of $2.67 million appears reasonable for 2 years of IT support. However, the potential total value of $174.98 million over the contract's life requires closer scrutiny to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. The Cost Plus Award Fee structure, however, can introduce variability in the final cost based on performance.

Taxpayer Impact: The competitive award process is intended to secure fair pricing for taxpayers. The long-term nature and potential value suggest significant taxpayer funds are allocated to this contract.

Public Impact

Ensures continued IT infrastructure and management for the Federal Highway Administration. Supports critical transportation data and operational systems. Potential for innovation and efficiency gains through award fee incentives. Long-term commitment to a single contractor may limit future market flexibility.

Waste & Efficiency Indicators

Waste Risk Score: 65 / 10

Warning Flags

Potential for cost overruns with CPAF structure.
Long contract duration may not reflect current market efficiencies.
Limited visibility into specific performance metrics driving award fees.

Positive Signals

Awarded through full and open competition.
Incentivizes contractor performance through award fees.
Provides stable IT support for a critical agency.

Sector Analysis

This contract falls within the Computer Facilities Management Services sector, a common area for government IT outsourcing. Benchmarks for similar contracts would focus on cost per user, system uptime, and response times.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). This suggests that larger, established IT service providers were deemed best suited for this requirement.

Oversight & Accountability

The Cost Plus Award Fee structure implies performance monitoring to justify award fees. Further oversight would involve reviewing the agency's evaluation of contractor performance and the justification for any awarded fees.

Related Government Programs

Computer Facilities Management Services
Department of Transportation Contracting
Federal Highway Administration Programs

Risk Flags

Potential for cost creep due to CPAF structure.
Long contract duration may not reflect current market pricing.
Lack of small business participation.
Limited transparency into award fee justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $271.5 million to INDUS CORPORATION. FHWA FEDERAL INFORMATION TECHNOLOGY SUPPORT SERVICES. BASE 2-YEARS TASK A: ESTIMATED COST: $2,675,112.00 AWARD FEE: $139,421.00 ESTIMATED TOTAL: $2,814,533.00 POTENTIAL TOTAL VALUE OF THE CONTRACT: $174,980,989.00

Who is the contractor on this award?

The obligated recipient is INDUS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Highway Administration).

What is the total obligated amount?

The obligated amount is $271.5 million.

What is the period of performance?

Start: 2002-04-15. End: 2013-04-24.

How effectively did the award fee structure incentivize INDUS CORPORATION to deliver superior IT support services within budget?

The effectiveness of the award fee structure hinges on clearly defined performance metrics and rigorous agency evaluation. Without access to the specific award fee criteria and the agency's assessment reports, it's difficult to definitively gauge the incentive's impact. However, the potential for significant award fees suggests a strong motivation for the contractor to meet or exceed performance expectations.

What risks were identified during the full and open competition that justified the Cost Plus Award Fee (CPAF) contract type?

CPAF contracts are often used when the scope of work is not precisely defined, or when performance outcomes are difficult to quantify upfront. Risks might include the evolving nature of IT needs, the complexity of managing large-scale IT infrastructure, or the desire to incentivize specific performance targets that are challenging to pre-negotiate. This structure allows flexibility while aiming for cost control through performance.

Does the long contract duration (2002-2013) reflect a strategic decision or a potential lack of agility in adapting to changing IT needs and market conditions?

The extended duration suggests a stable, long-term requirement for these specific IT support services by the FHWA. It could indicate a strategic decision to ensure continuity and leverage established expertise. However, it also raises questions about whether the agency adequately explored more agile contracting approaches or opportunities to re-compete to ensure the best value and incorporate newer technologies.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Tetra Tech, Inc.

Address: 1951 KIDWELL DRIVE, VIENNA, VA, 22182

Business Categories: 8(a) Program Participant, Category Business, Emerging Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $271,472,397

Exercised Options: $271,472,397

Current Obligation: $271,472,397

Actual Outlays: $-38,218

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline