DoD's $55.6M contract for engineering services awarded to Alpha Data Corporation shows potential value concerns

Contract Overview

Contract Amount: $13,606,888 ($13.6M)

Contractor: Alpha Data Corporation

Awarding Agency: Department of Defense

Start Date: 2002-11-13

End Date: 2008-03-31

Contract Duration: 1,965 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST NO FEE

Sector: IT

Official Description: 200302!000076!5700!GM04 !AAC/PKZ !F0863502C0095 !A!N! !N! !20021113!20031231!556373942!556373942!556373942!N!ALPHA DATA CORPORATION !1326 LEWIS TURNER BLVD !FORT WALTON BE !FL!32547!20050!091!12!EGLIN AFB !OKALOOSA !FLORIDA !+000001529792!N!N!000001529792!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !541519!E! !3! ! ! ! ! !99990909!B!A!N!A! !A!N!S!2!004!K! !Z!Y!Z! ! !N!A!N!N!C! ! ! !D!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32547

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to ALPHA DATA CORPORATION for work described as: 200302!000076!5700!GM04 !AAC/PKZ !F0863502C0095 !A!N! !N! !20021113!20031231!556373942!556373942!556373942!N!ALPHA DATA CORPORATION !1326 LEWIS TURNER BLVD !FORT WALTON BE !FL!32547!20050!091!12!EGLIN AFB !OKALO… Key points: 1. The contract's duration of 1965 days (over 5 years) suggests a significant investment, warranting scrutiny of its overall value. 2. While the contract was competed, the specific details of the competition (e.g., number of bidders, evaluation criteria) are not fully detailed, impacting price discovery assessment. 3. The contract type (Cost No Fee) can sometimes lead to less price certainty compared to fixed-price contracts. 4. The awarded amount of $55.6M over more than 5 years averages to approximately $11.1M annually, requiring benchmarking against similar services. 5. The contractor, Alpha Data Corporation, has a track record that needs to be evaluated in the context of this significant award. 6. The 'Other Computer Related Services' NAICS code suggests a broad scope, making direct cost comparisons challenging without further detail.

Value Assessment

Rating: fair

The total award amount of $55.6 million over a period of 1965 days (approximately 5.3 years) averages to roughly $10.5 million per year. Without specific details on the services rendered and the deliverables, it is difficult to benchmark this against similar contracts. The 'Cost No Fee' contract type, while providing flexibility, can sometimes result in higher costs for the government if not managed tightly, as the contractor is reimbursed for allowable costs plus a fixed fee. Further analysis of the contractor's performance and the specific scope of work would be needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources may have been excluded based on specific criteria. The record shows 4 bids were received. The level of competition, with four bidders, suggests a reasonable opportunity for price discovery, but the exclusion of sources warrants a closer look at the justification for such exclusions to ensure maximum competition was achieved.

Taxpayer Impact: A competitive process with four bidders generally benefits taxpayers by encouraging multiple companies to offer their best pricing and technical solutions, potentially leading to a more cost-effective outcome.

Public Impact

The primary beneficiaries are likely the Department of Defense and its personnel, who receive engineering and technical services essential for operations. The services delivered are categorized under 'Engineering Technical Services' and 'Other Computer Related Services,' indicating support for complex systems and IT infrastructure. The contract is geographically focused on Eglin AFB in Florida, suggesting a direct impact on the local economy and workforce in that region. The contract may have implications for the specialized technical workforce, requiring skilled engineers and IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' contract type can sometimes lead to less stringent cost control compared to fixed-price arrangements.
The broad NAICS code 'Other Computer Related Services' makes it challenging to ascertain the precise nature of services and benchmark costs effectively.
The 'Full and Open Competition After Exclusion of Sources' requires scrutiny to ensure that the exclusion criteria did not unduly limit competition.

Positive Signals

The contract was awarded through a competitive process, indicating that multiple vendors had the opportunity to bid.
The award to Alpha Data Corporation suggests they met the technical and performance requirements outlined in the solicitation.
The contract duration of over 5 years indicates a stable, long-term need for these services by the Department of Defense.

Sector Analysis

This contract falls within the broader Information Technology and Professional Services sector, specifically under the 'Other Computer Related Services' category (NAICS 541519). This sector is characterized by a wide range of services, from software development to IT consulting and engineering support. The total federal spending in this sector is substantial, with numerous contracts awarded annually. Benchmarking this contract's value would require comparing it to other large-scale engineering and IT support contracts awarded by the Department of Defense and other federal agencies to similar-sized firms.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the 'sb' field is false. Therefore, there are no direct subcontracting implications specifically mandated for small businesses through this contract's set-aside status. However, the prime contractor, Alpha Data Corporation, may still engage small businesses as subcontractors based on their own business practices and the nature of the services required.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, given its award through Eglin AFB. The contract type (Cost No Fee) necessitates robust oversight to ensure that costs incurred by the contractor are allowable, reasonable, and allocable to the contract. Accountability measures would include performance reviews, milestone tracking, and financial audits. Transparency would depend on the agency's policies regarding the release of contract details and performance reports.

Related Government Programs

Defense Information Technology Contracting
Engineering and Technical Services Contracts
IT Support Services
Aerospace Engineering Services
Department of Defense IT Procurement

Risk Flags

Potential for cost overruns due to Cost No Fee contract type.
Limited transparency on specific services rendered, hindering value assessment.
Justification for 'exclusion of sources' needs review to ensure maximum competition.
Contract duration suggests long-term reliance, requiring ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to ALPHA DATA CORPORATION. 200302!000076!5700!GM04 !AAC/PKZ !F0863502C0095 !A!N! !N! !20021113!20031231!556373942!556373942!556373942!N!ALPHA DATA CORPORATION !1326 LEWIS TURNER BLVD !FORT WALTON BE !FL!32547!20050!091!12!EGLIN AFB !OKALOOSA !FLORIDA !+000001529792!N!N!000001529792!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !541519!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is ALPHA DATA CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $13.6 million.

What is the period of performance?

Start: 2002-11-13. End: 2008-03-31.

What is the specific scope of 'Engineering Technical Services' and 'Other Computer Related Services' covered under this contract?

The provided data indicates the contract covers 'ENGINEERING TECHNICAL SERVICES' and falls under NAICS code 541519, 'Other Computer Related Services.' While the specific details of the scope of work are not fully elaborated in the summary data, these categories typically encompass a wide range of activities. For 'Engineering Technical Services,' this could include design, development, testing, and maintenance of systems, as well as technical support and analysis. 'Other Computer Related Services' often involves IT consulting, systems integration, data processing, and computer facilities management. Given the award to Eglin AFB, it is plausible that these services relate to supporting complex defense systems, communication networks, or IT infrastructure critical to the base's operations. A more detailed review of the contract's Statement of Work (SOW) would be necessary to understand the precise deliverables and technical requirements.

How does the awarded amount of $55.6 million compare to similar engineering and IT services contracts awarded by the Department of Defense?

The awarded amount of $55.6 million over approximately 5.3 years represents an average annual value of about $10.5 million. To benchmark this effectively, one would need to compare it against contracts for similar services (engineering, IT support, technical services) awarded by the DoD to companies of comparable size and capability. Factors such as the specific technologies involved, the level of security clearance required, the geographic location, and the contract type (e.g., cost-plus vs. fixed-price) significantly influence pricing. Without access to a comprehensive database of comparable DoD contracts with detailed scope and pricing, a precise comparison is difficult. However, for large-scale, long-term engineering and IT support contracts within the DoD, this amount falls within a common range, though its value-for-money depends heavily on the specific services rendered and performance outcomes.

What is the track record of Alpha Data Corporation in performing similar government contracts?

The provided data identifies Alpha Data Corporation as the contractor for this $55.6 million award. To assess their track record, a review of their past performance on federal contracts would be essential. This would involve examining contract databases (like FPDS or SAM.gov) for previous awards, contract values, performance ratings, and any history of contract disputes, terminations, or corrective actions. A positive track record with successful completion of similar-sized and complex engineering or IT services contracts would indicate a lower performance risk. Conversely, any history of poor performance, cost overruns, or missed deadlines on prior government engagements would raise concerns about their ability to successfully execute this current contract. Without specific historical performance data, it's impossible to definitively assess their track record.

What are the potential risks associated with the 'Cost No Fee' (CNF) contract type for this engagement?

The 'Cost No Fee' (CNF) contract type means the contractor is reimbursed for all allowable, allocable, and reasonable costs incurred in performing the contract, but receives no additional fee or profit. While this can be beneficial for the government in situations where the scope is highly uncertain or evolving, it can also present risks. One primary risk is that the contractor may have less incentive to control costs rigorously, as their profit is not directly tied to cost savings. The government bears the full financial risk of cost overruns. Effective oversight and robust auditing are therefore critical to ensure that costs claimed by the contractor are legitimate and necessary for contract performance. Without strong government management and clear performance metrics, CNF contracts can sometimes lead to higher overall expenditures than other contract types.

How does the 'Full and Open Competition After Exclusion of Sources' mechanism impact potential savings for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' is a procurement method that allows for broad competition but permits the exclusion of specific sources based on defined criteria. While it aims for competition, the exclusion of sources can potentially limit the number of bidders and the diversity of solutions offered. If the exclusion criteria are overly restrictive or not well-justified, it could inadvertently reduce competitive pressure, potentially leading to higher prices than if all qualified sources were allowed to compete. Taxpayers benefit most from robust competition where multiple capable vendors vie for the contract, driving down prices through market forces. Therefore, the justification and impact of any source exclusions under this contract type are crucial for assessing the extent to which taxpayer savings were maximized.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST NO FEE (S)

Contractor Details

Address: 1326 LEWIS TURNER BLVD, FORT WALTON BE, FL

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Timeline