DoD's $53.6M software development contract to Obsidian Global, LLC awarded under full and open competition

Contract Overview

Contract Amount: $53,591,074 ($53.6M)

Contractor: Obsidian Global, LLC

Awarding Agency: Department of Defense

Start Date: 2023-05-15

End Date: 2026-09-14

Contract Duration: 1,218 days

Daily Burn Rate: $44.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE CONTRACTOR SHALL EXECUTE, DELIVER, AND DEPLOY SCHEDULED SOFTWARE BUILDS AND RELEASES, ALONG WITH NECESSARY SERVICE PACKS REQUIRED TO MAINTAIN MISSION AND SERVICE DELIVERY OPERATIONAL SUITABILITY.

Place of Performance

Location: RANDOLPH AFB, BEXAR County, TEXAS, 78150

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $53.6 million to OBSIDIAN GLOBAL, LLC for work described as: THE CONTRACTOR SHALL EXECUTE, DELIVER, AND DEPLOY SCHEDULED SOFTWARE BUILDS AND RELEASES, ALONG WITH NECESSARY SERVICE PACKS REQUIRED TO MAINTAIN MISSION AND SERVICE DELIVERY OPERATIONAL SUITABILITY. Key points: 1. Contract focuses on custom software builds and releases to ensure operational suitability. 2. Awarded via a delivery order under a larger contract vehicle. 3. The contract duration spans over three years, indicating a significant, ongoing need. 4. The firm fixed-price structure aims to control costs and provide predictability. 5. The contractor, Obsidian Global, LLC, is based in Texas. 6. This contract falls under the Custom Computer Programming Services NAICS code.

Value Assessment

Rating: good

The contract's value of $53.6 million over approximately three years for custom software development appears reasonable given the scope of maintaining mission-critical systems. Benchmarking against similar large-scale software development contracts within the Department of Defense suggests this pricing is within expected ranges. The firm fixed-price nature provides cost certainty, which is a positive indicator for value.

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 a competitive process was initiated. While the specific number of bidders is not detailed, this designation suggests multiple qualified vendors had the opportunity to compete. This level of competition is generally favorable for achieving competitive pricing and ensuring a wide pool of capable contractors is considered.

Taxpayer Impact: A full and open competition process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces and encouraging innovation from a broad range of providers.

Public Impact

The primary beneficiaries are the Department of the Air Force and its operational units, which will receive updated and maintained software. Services delivered include the execution, delivery, and deployment of scheduled software builds and releases. The contract supports the ongoing operational suitability and mission delivery of critical Air Force systems. The geographic impact is primarily within the Department of Defense's operational theaters, though the contractor is based in Texas. Workforce implications include the need for skilled software developers and support personnel by Obsidian Global, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed throughout the contract lifecycle.
Reliance on a single contractor for critical software updates could pose a risk if performance issues arise.
Ensuring continuous alignment with evolving technological advancements and cybersecurity best practices will be crucial.

Positive Signals

The firm fixed-price contract type provides cost predictability for the government.
Awarded under full and open competition, suggesting a robust selection process.
The contract duration indicates a long-term commitment to maintaining essential software capabilities.
The focus on operational suitability suggests a commitment to system reliability and mission success.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The market for such services within the federal government is substantial, driven by the continuous need for software development, maintenance, and modernization across all agencies. Comparable spending benchmarks for large-scale software development and sustainment contracts within the Department of Defense often run into tens or hundreds of millions of dollars, reflecting the complexity and criticality of these systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Obsidian Global, LLC, is likely a larger entity or has been awarded this contract through a competitive process that did not prioritize small business participation. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to leverage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified software builds and releases. Transparency is facilitated through contract award databases, though detailed performance metrics and specific oversight activities are generally not publicly disclosed.

Related Government Programs

Defense Information Technology Contracting
Custom Software Development Services
Air Force IT Modernization Programs
Software Sustainment Contracts
Federal IT Services

Risk Flags

Potential for performance issues if contractor lacks sufficient expertise in specific Air Force systems.
Risk of cost overruns if development complexity is underestimated, despite FFP structure.
Dependency on contractor for critical software updates could impact operational continuity.
Cybersecurity vulnerabilities if software is not developed with robust security protocols.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.6 million to OBSIDIAN GLOBAL, LLC. THE CONTRACTOR SHALL EXECUTE, DELIVER, AND DEPLOY SCHEDULED SOFTWARE BUILDS AND RELEASES, ALONG WITH NECESSARY SERVICE PACKS REQUIRED TO MAINTAIN MISSION AND SERVICE DELIVERY OPERATIONAL SUITABILITY.

Who is the contractor on this award?

The obligated recipient is OBSIDIAN GLOBAL, LLC.

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 $53.6 million.

What is the period of performance?

Start: 2023-05-15. End: 2026-09-14.

What is Obsidian Global, LLC's track record with the Department of Defense and other federal agencies?

Assessing Obsidian Global, LLC's track record requires a review of their past performance on federal contracts. This includes examining contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. A positive track record with similar scope and complexity, particularly within the Department of Defense, would indicate a lower performance risk for this $53.6 million software development contract. Conversely, a history of underperformance or unresolved issues could signal potential challenges in meeting the current contract's requirements for scheduled software builds and releases over its 1218-day duration.

How does the $53.6 million value compare to similar custom software development contracts for the Air Force?

The $53.6 million value for custom computer programming services over approximately three years (1218 days) for the Department of the Air Force is substantial but falls within the expected range for large-scale software development and sustainment efforts. The Air Force, like other branches of the DoD, invests heavily in maintaining and modernizing its IT infrastructure. Contracts of this magnitude are typically awarded for complex projects involving mission-critical systems, requiring significant development, integration, and ongoing support. Benchmarking against publicly available data for similar firm-fixed-price, full-and-open competition contracts for custom software development within the defense sector would provide a more precise comparison, but the overall value appears aligned with the scope of work described.

What are the primary risks associated with this firm-fixed-price contract for software development?

While firm-fixed-price (FFP) contracts are designed to provide cost certainty, they introduce specific risks, particularly in complex software development. A primary risk is that the contractor may cut corners on quality or scope to maintain profitability if development costs exceed initial estimates. For this contract, risks include potential delays in software builds and releases, inadequate testing leading to operational unsuitability, or the contractor underestimating the complexity of integration with existing Air Force systems. Effective government oversight, clear performance metrics, and robust acceptance criteria are crucial to mitigate these risks and ensure the delivered software meets the required mission and service delivery operational suitability.

How effective are the 'Full and Open Competition After Exclusion of Sources' procedures in ensuring value for taxpayers on this contract?

The 'Full and Open Competition After Exclusion of Sources' procedure is intended to maximize competition while potentially addressing specific circumstances that might limit the pool of eligible bidders. When executed properly, this method should still yield competitive pricing and a wide selection of qualified vendors, thereby benefiting taxpayers. However, the 'exclusion of sources' aspect warrants scrutiny. If the exclusion was based on overly restrictive pre-qualification criteria or if it unnecessarily limited the number of potential bidders, it could inadvertently reduce competition and potentially lead to higher costs than a truly unrestricted full and open competition. Detailed justification for any source exclusion is key to assessing its impact on taxpayer value.

What is the historical spending pattern for custom computer programming services by the Department of the Air Force?

The Department of the Air Force historically spends billions of dollars annually on IT services, including custom computer programming. This spending is driven by the need to develop, maintain, and modernize a vast array of systems supporting intelligence, logistics, command and control, and personnel management. Spending patterns can fluctuate based on strategic priorities, technological shifts (e.g., cloud migration, AI adoption), and specific program requirements. Analyzing historical spending data for NAICS code 541511 (Custom Computer Programming Services) within the Air Force would reveal trends in contract values, award types (e.g., IDIQ, delivery orders), and key contractors, providing context for the $53.6 million award to Obsidian Global, LLC.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1055 THOMAS JEFFERSON ST NW, WASHINGTON, DC, 20007

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $78,068,538

Exercised Options: $53,591,074

Current Obligation: $53,591,074

Actual Outlays: $8,148,564

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $15,277,467

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877120D0012

IDV Type: IDC

Timeline