Indyne Inc. awarded $282M for Air Force IT sustainment, raising value-for-money questions

Contract Overview

Contract Amount: $282,150,287 ($282.2M)

Contractor: Indyne, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-06-17

End Date: 2018-09-30

Contract Duration: 3,757 days

Daily Burn Rate: $75.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: 45 SW FY09 FUNDING FOR IOMS SUSTAINMENT

Place of Performance

Location: CANAVERAL AIR STATION, BREVARD County, FLORIDA, 32925

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $282.2 million to INDYNE, INC. for work described as: 45 SW FY09 FUNDING FOR IOMS SUSTAINMENT Key points: 1. Contract value of $282M over 10 years suggests significant long-term investment in IT sustainment. 2. The 'Facilities Support Services' NAICS code may indicate a broader scope than just IT, potentially impacting cost allocation. 3. A 10-year duration for an IT sustainment contract could present risks related to technological obsolescence and evolving requirements. 4. The contract was awarded under full and open competition, which typically fosters competitive pricing. 5. The use of a Cost Plus Incentive Fee (CPIF) contract type allows for shared savings but requires careful monitoring of performance and costs. 6. The significant contract value and long duration warrant scrutiny of Indyne's performance and cost control measures.

Value Assessment

Rating: fair

The total award amount of $282 million over approximately 10 years for facilities support services, which may encompass IT sustainment, is substantial. Benchmarking this against similar long-term sustainment contracts is challenging without more specific service details. The Cost Plus Incentive Fee (CPIF) structure suggests an attempt to align contractor incentives with government cost-saving goals, but the overall value-for-money depends heavily on the achieved performance metrics and the efficiency of cost management throughout the contract's life. The relatively high base contract value before potential incentives warrants careful examination of the underlying cost structure and the necessity of such a long-term commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. With 9 bidders identified, this suggests a reasonably competitive environment at the outset. The presence of numerous bidders generally provides the government with a better opportunity to secure competitive pricing and identify the most capable contractor. However, the specific pricing structures and the final negotiated terms would determine the ultimate level of price discovery achieved.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it tends to drive down prices and encourage efficiency from the winning contractor, maximizing the value of public funds.

Public Impact

The primary beneficiaries are the Department of the Air Force, receiving sustainment services for its facilities and potentially IT infrastructure. Services delivered likely include maintenance, repair, and operational support for facilities, with an IT component possibly related to network or system upkeep. The geographic impact is centered in Florida (ST), where the contractor is located and services are likely performed. Workforce implications include job creation and sustainment within Indyne, Inc. and potentially its subcontractors, particularly in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) increases risk of technological obsolescence and potential for cost overruns if requirements change significantly.
CPIF contract type requires robust oversight to ensure incentives are effectively driving desired outcomes without encouraging unnecessary cost escalation.
The broad 'Facilities Support Services' NAICS code may obscure the specific IT costs and performance, making direct comparison difficult.
Potential for scope creep over a decade-long contract, leading to increased costs beyond initial projections.

Positive Signals

Full and open competition with 9 bidders suggests a healthy market and potential for competitive pricing.
CPIF contract structure can incentivize cost savings and efficient performance when properly managed.
A long-term contract can provide stability and predictability for both the government and the contractor, potentially leading to better service integration.
The award to Indyne, Inc. indicates a level of trust and proven capability in providing these types of services.

Sector Analysis

The Facilities Support Services sector is a broad category encompassing a wide range of operational and maintenance activities for government and commercial properties. This contract, with its IT sustainment component, fits within the larger government contracting landscape where agencies outsource non-core functions. The market for such services is competitive, with numerous providers ranging from large corporations to specialized firms. The $282 million value positions this as a significant contract within its sub-sector, likely supporting critical infrastructure for the Air Force.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration (SB: false, SS: false). While Indyne, Inc. may utilize small businesses for subcontracting, there is no explicit requirement or focus on small business set-asides for this particular award. This suggests that the primary focus was on full and open competition to secure the best overall value, rather than specifically promoting small business prime contracting. The impact on the small business ecosystem would depend on Indyne's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates diligent monitoring of performance metrics, cost expenditures, and the achievement of incentive targets. Transparency would be facilitated through regular reporting requirements mandated by the contract. While no specific Inspector General (IG) jurisdiction is mentioned, the Department of Defense IG typically has broad authority over defense contracts, and could investigate if performance or cost issues arise.

Related Government Programs

Air Force IT Modernization Programs
Defense Facilities Maintenance Contracts
Government IT Services Contracts
Cost Plus Incentive Fee Contracts
Long-Term Government Service Agreements

Risk Flags

Long-term contract duration risk
Potential for cost overruns
Technological obsolescence
Scope definition ambiguity
CPIF oversight complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $282.2 million to INDYNE, INC.. 45 SW FY09 FUNDING FOR IOMS SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is INDYNE, INC..

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 $282.2 million.

What is the period of performance?

Start: 2008-06-17. End: 2018-09-30.

What is Indyne, Inc.'s track record with the Department of Defense and specifically the Air Force?

Indyne, Inc. has a history of contracting with the U.S. government, including the Department of Defense. While specific details on their performance across all contracts require deeper analysis, their ability to secure a $282 million, 10-year contract with the Air Force suggests a demonstrated capacity and a level of trust from the agency. Further investigation into past performance reviews, any documented disputes, or awards/recognitions related to their previous government contracts would provide a more comprehensive understanding of their track record. Analyzing their performance on similar sustainment or IT-related contracts would be particularly insightful.

How does the $282 million total award compare to similar facilities support and IT sustainment contracts?

The $282 million total award over approximately 10 years is a substantial figure for facilities support and IT sustainment. Comparing it directly is complex due to the broad 'Facilities Support Services' NAICS code and the potential mix of IT sustainment. However, for large-scale, long-term government contracts involving infrastructure and operational support, this value is significant but not unprecedented. Benchmarking would ideally involve contracts with similar durations, scope (including IT elements), and agency (e.g., other branches of the military). The average annual value of roughly $28 million suggests a major operational support requirement. Without more granular data on the specific IT services and the exact breakdown of costs, precise comparisons are difficult, but it indicates a high-value, long-term commitment.

What are the primary risks associated with a 10-year contract for IT sustainment?

A 10-year duration for IT sustainment presents several key risks. Technological obsolescence is a major concern; IT systems and infrastructure can become outdated much faster than a decade. This could lead to the government paying for legacy systems or requiring costly modifications. Evolving requirements are another risk; the Air Force's needs may change significantly over 10 years due to new threats, strategic shifts, or technological advancements, potentially making the original scope of work insufficient or irrelevant. Furthermore, long-term contracts can sometimes reduce flexibility and make it harder to adopt newer, more cost-effective solutions that emerge during the contract period. Contractor performance can also degrade over time, and the long duration might lessen the urgency for continuous improvement if oversight is not rigorous.

How effectively can the Cost Plus Incentive Fee (CPIF) structure manage costs and performance for this contract?

The Cost Plus Incentive Fee (CPIF) structure is designed to incentivize the contractor (Indyne, Inc.) to control costs while meeting performance targets. In theory, if the contractor performs better than a target (e.g., lower costs, higher quality), both the government and the contractor share in the savings. Conversely, if performance falls short, the contractor's fee is reduced. The effectiveness hinges on clearly defined performance metrics, realistic cost targets, and robust government oversight. For this contract, the Air Force must meticulously track Indyne's spending and performance against established baselines. The CPIF can be a powerful tool for aligning interests, but it requires sophisticated management and auditing to prevent potential gaming of the system or disputes over target achievement.

What does the historical spending pattern reveal about Air Force investments in facilities support and IT sustainment?

Historical spending patterns for the Air Force in facilities support and IT sustainment typically show a consistent need for these services, often reflecting a strategy of outsourcing non-core functions to leverage private sector expertise and potentially achieve cost efficiencies. Large, long-term contracts like this one suggest a strategic decision to ensure stable support for critical infrastructure over extended periods. Analyzing past spending would reveal trends in contract values, durations, and the types of services procured. It would also indicate whether the Air Force has historically relied on full and open competition or other methods for these types of services. Significant year-over-year spending in these categories underscores their ongoing importance to Air Force operations.

What are the implications of the 'Facilities Support Services' NAICS code potentially encompassing more than just IT?

If the 'Facilities Support Services' NAICS code (561210) encompasses more than just IT, it implies that the $282 million contract covers a broader range of activities, potentially including building maintenance, groundskeeping, custodial services, and utility management, alongside IT sustainment. This broad scope can make it challenging to isolate and evaluate the cost-effectiveness and performance specifically related to the IT components. It raises questions about how costs are allocated between different service areas and whether the IT sustainment portion is receiving adequate focus and funding. For analysts, it necessitates a careful review of the contract's Performance Work Statement (PWS) to understand the full scope and ensure that the IT sustainment aspect is being managed efficiently within the larger facilities support framework.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA252107R8501

Offers Received: 9

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 11800 SUNRISE VALLEY DR, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $306,355,621

Exercised Options: $306,355,621

Current Obligation: $282,150,287

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline