DoD's $36.5M Dataminr Subscription for Computing Infrastructure Raises Questions on Value and Competition

Contract Overview

Contract Amount: $36,540,000 ($36.5M)

Contractor: Dataminr, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-04-23

End Date: 2021-04-23

Contract Duration: 365 days

Daily Burn Rate: $100.1K/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: MCCRAY-AMOS-PHK-PUBLICALLY AVALIABLE INFORMATION (PAI) DOD ENTERPRISE LICENSE SUBSCRIPTION

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10016

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $36.5 million to DATAMINR, INC. for work described as: MCCRAY-AMOS-PHK-PUBLICALLY AVALIABLE INFORMATION (PAI) DOD ENTERPRISE LICENSE SUBSCRIPTION Key points: 1. The $36.5 million contract for Dataminr's enterprise license raises concerns about the value proposition given the cost. 2. Competition was limited, with a 'full and open competition after exclusion of sources' suggesting potential pre-selection. 3. The firm fixed price contract for a 365-day duration presents a clear cost but doesn't guarantee optimal value. 4. The sector is IT, specifically Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services.

Value Assessment

Rating: questionable

The $36.5 million price tag for a one-year enterprise license from Dataminr appears high when compared to general IT infrastructure and data processing services. Without specific performance metrics or a detailed breakdown of services, it's difficult to ascertain if this price reflects fair market value for the capabilities provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources,' which implies that while competition was sought, certain sources were excluded, potentially limiting the competitive landscape. This method can impact price discovery by not allowing all potential vendors to bid.

Taxpayer Impact: Taxpayers may be impacted if the limited competition resulted in a price higher than what could have been achieved through a truly open and unrestricted bidding process.

Public Impact

Citizens may question the necessity and cost-effectiveness of such a large subscription for data analytics services. Transparency in the procurement process is crucial to ensure public funds are used efficiently. The use of advanced data analytics by the DoD raises broader discussions about privacy and data security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about price fairness.
High contract value warrants scrutiny of value for money.
Lack of detailed service breakdown hinders value assessment.

Positive Signals

Firm fixed price provides cost certainty.
Contract duration is clearly defined.

Sector Analysis

This contract falls within the IT sector, specifically focusing on computing infrastructure, data processing, and web hosting. Spending in this area is substantial across government, but benchmarks for specialized data analytics platforms like Dataminr are less standardized, making direct comparisons challenging.

Small Business Impact

The contract does not indicate any specific provisions or set-asides for small businesses. The nature of the service and the large contract value suggest it may be geared towards larger, established providers, potentially excluding smaller innovative firms.

Oversight & Accountability

The 'exclusion of sources' clause in the competition method warrants further oversight to ensure it was justified and did not unduly restrict competition. Accountability for the value received for $36.5 million is essential.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for overpayment due to limited competition.
Lack of transparency in source exclusion.
Difficulty in benchmarking specialized data analytics services.
Unclear return on investment for a high-cost subscription.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.5 million to DATAMINR, INC.. MCCRAY-AMOS-PHK-PUBLICALLY AVALIABLE INFORMATION (PAI) DOD ENTERPRISE LICENSE SUBSCRIPTION

Who is the contractor on this award?

The obligated recipient is DATAMINR, 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 $36.5 million.

What is the period of performance?

Start: 2020-04-23. End: 2021-04-23.

What specific capabilities does Dataminr provide that justify the $36.5 million price tag, and how do these capabilities compare to alternative solutions in terms of cost-effectiveness?

The justification for Dataminr's $36.5 million price likely stems from its proprietary real-time event detection and data analytics platform, which aggregates and analyzes vast amounts of public data. This includes social media, news, and sensor data to provide alerts on critical events. However, a detailed cost-benefit analysis comparing its unique features against potentially lower-cost, albeit less comprehensive, alternatives is needed to confirm cost-effectiveness for the DoD's specific needs.

How was the 'exclusion of sources' determined, and what steps were taken to ensure this limitation did not negatively impact the government's ability to secure the best possible price?

The determination for excluding sources typically involves specific justifications, such as unique capabilities, existing infrastructure compatibility, or prior performance. To ensure fair pricing despite this limitation, the DoD likely relied on market research, independent cost estimates, and negotiation strategies. However, the absence of broader competition inherently reduces the pressure on vendors to offer the lowest possible price, making robust internal valuation critical.

What metrics are in place to measure the effectiveness and return on investment of this Dataminr subscription for the Department of Defense?

Effectiveness is likely measured by the timeliness and accuracy of alerts provided by Dataminr, and how these alerts contribute to mission objectives, such as situational awareness or threat detection. Quantifying the direct return on investment can be challenging for intelligence and defense applications. Key performance indicators might include the number of actionable intelligence reports generated, response times to critical events, and the prevention of negative outcomes attributed to the system's insights.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA701420R0005

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6 E 32ND ST FL 2, NEW YORK, NY, 10016

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $258,661,097

Exercised Options: $48,720,000

Current Obligation: $36,540,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline