Battelle Memorial Institute awarded $23.6M for Air Force Total Ownership Cost Decision Support System

Contract Overview

Contract Amount: $23,616,222 ($23.6M)

Contractor: Battelle Memorial Institute

Awarding Agency: Department of Defense

Start Date: 2018-01-02

End Date: 2023-03-31

Contract Duration: 1,914 days

Daily Burn Rate: $12.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TO ACQUIRE SOFTWARE ENGINEERING AND TECHNICAL SERVICES FOR THE AIR FORCE TOTAL OWNERSHIP COST DECISION SUPPORT SYSTEM (AFTOC DSS) FOR THE 520 SOFTWARE MAINTENANCE SQUADRON.

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to BATTELLE MEMORIAL INSTITUTE for work described as: IGF::OT::IGF TO ACQUIRE SOFTWARE ENGINEERING AND TECHNICAL SERVICES FOR THE AIR FORCE TOTAL OWNERSHIP COST DECISION SUPPORT SYSTEM (AFTOC DSS) FOR THE 520 SOFTWARE MAINTENANCE SQUADRON. Key points: 1. Contract awarded to a single vendor, raising questions about competitive pricing. 2. Long contract duration of over 5 years suggests a need for sustained support. 3. Firm Fixed Price contract type may limit contractor risk but could lead to higher initial costs. 4. The service category is broad, encompassing computing infrastructure and data processing. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

The contract value of $23.6 million over approximately 5 years for software engineering and technical services appears to be within a reasonable range for a sole-source award of this nature. However, without competitive bids, it is difficult to definitively benchmark the value for money. The firm fixed-price structure suggests that the government has locked in costs, but the absence of competition means there's less assurance that the price reflects the lowest possible market rate. Further analysis would require comparing this to similar sole-source contracts for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to a higher price than might have been achieved otherwise.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not have the opportunity to solicit and evaluate multiple proposals to ensure the best value was obtained.

Public Impact

The primary beneficiary is the U.S. Air Force, which receives critical software engineering and technical services. The contract supports the Total Ownership Cost Decision Support System (AFTOC DSS), aiding in financial planning and resource allocation. Services are likely delivered to personnel within the 520 Software Maintenance Squadron. The geographic impact is primarily within the Air Force's operational and support infrastructure, likely concentrated in Utah where the contract is managed. Workforce implications include the need for specialized software engineers and technical support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Long contract duration could lead to vendor lock-in and reduced flexibility.
Firm Fixed Price contract may not fully account for potential cost savings through efficiency.

Positive Signals

Award to an established entity (Battelle Memorial Institute) suggests a level of trust and proven capability.
Firm Fixed Price contract provides cost certainty for the government.
Focus on a specific, critical system (AFTOC DSS) indicates alignment with Air Force strategic needs.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on software engineering and technical services. The market for such services is large and competitive, with numerous firms capable of providing these solutions. However, the sole-source nature of this award bypasses typical market dynamics. Comparable spending benchmarks for similar software development and maintenance contracts within the Department of Defense can vary widely based on complexity, duration, and specific requirements.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to directly participate in this specific contract are limited. The prime contractor, Battelle Memorial Institute, is a large research and development organization, and while they may engage small businesses in their broader operations, this particular award does not directly foster small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force's contracting and program management offices. The Inspector General's office for the Department of Defense may also conduct audits or investigations into contract performance and spending. Transparency is limited due to the sole-source nature, but contract award data is generally available through federal procurement databases. Accountability measures would be defined within the contract's terms and conditions, focusing on performance metrics and delivery schedules.

Related Government Programs

Air Force IT Services
Software Development Contracts
Defense Decision Support Systems
IT Infrastructure Services
Technical Support Services

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for cost overruns not borne by contractor
Limited transparency in award process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to BATTELLE MEMORIAL INSTITUTE. IGF::OT::IGF TO ACQUIRE SOFTWARE ENGINEERING AND TECHNICAL SERVICES FOR THE AIR FORCE TOTAL OWNERSHIP COST DECISION SUPPORT SYSTEM (AFTOC DSS) FOR THE 520 SOFTWARE MAINTENANCE SQUADRON.

Who is the contractor on this award?

The obligated recipient is BATTELLE MEMORIAL INSTITUTE.

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 $23.6 million.

What is the period of performance?

Start: 2018-01-02. End: 2023-03-31.

What is Battelle Memorial Institute's track record with the Department of Defense for similar IT services?

Battelle Memorial Institute has a significant history of contracting with the Department of Defense across various research, development, and technical services. While specific data on their IT services track record for the Air Force is not detailed here, their overall presence suggests substantial experience. They are known for undertaking complex projects. A deeper dive into federal procurement databases like FPDS or SAM.gov would reveal the volume and nature of their past DoD contracts, including any performance ratings or past performance evaluations that could shed light on their reliability for this specific AFTOC DSS contract.

How does the $23.6 million contract value compare to similar Air Force IT support contracts?

Benchmarking the $23.6 million value requires comparing it to similar Air Force IT support contracts, particularly those involving software engineering and decision support systems. Given this contract's duration of over five years, the annual average is approximately $4.7 million. This figure is moderate within the vast landscape of federal IT spending. Larger, more complex system development or enterprise-wide IT services contracts can easily reach tens or hundreds of millions of dollars. However, without knowing the specific scope, complexity, and deliverables of the AFTOC DSS, a precise comparison is challenging. The sole-source nature also complicates direct value-for-money comparisons.

What are the primary risks associated with a sole-source IT services contract of this magnitude?

The primary risks associated with a sole-source IT services contract of this magnitude include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or become more efficient, and the risk of vendor lock-in. Without competitive pressure, the government may not be securing the best possible price or the most advanced solutions. Furthermore, if the sole-source provider experiences financial difficulties or significant performance issues, the government has limited immediate alternatives, potentially jeopardizing the continuity of critical services like the AFTOC DSS. Ensuring robust contract oversight and clear performance metrics becomes even more crucial in sole-source situations.

How effective is the AFTOC DSS in supporting Air Force total ownership cost decisions?

The effectiveness of the Air Force Total Ownership Cost Decision Support System (AFTOC DSS) is directly tied to the quality of the software engineering and technical services provided under this contract. The system is designed to aid the Air Force in making informed decisions regarding the long-term costs associated with acquiring and maintaining its assets. While the contract's existence indicates a recognized need for such a system, its actual effectiveness would be measured by its ability to provide accurate, timely, and actionable data to decision-makers, ultimately contributing to better financial planning and resource allocation within the Air Force. User feedback and system performance metrics would be key indicators of its success.

What has been the historical spending trend for the AFTOC DSS or similar systems within the Air Force?

Historical spending on the AFTOC DSS or similar decision support systems within the Air Force would provide context for the current $23.6 million award. If previous contracts for this system were also sole-source and of similar value, it might indicate a consistent approach. Conversely, if there's a history of competitive bidding or fluctuating costs, the current award's terms might warrant closer scrutiny. Analyzing spending patterns over several fiscal years would reveal whether the Air Force is increasing, decreasing, or maintaining its investment in this capability, and whether costs are trending upwards or downwards.

What are the implications of the Firm Fixed Price (FFP) contract type for this software engineering service?

The Firm Fixed Price (FFP) contract type for this software engineering service means that the contractor, Battelle Memorial Institute, is obligated to perform the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk from the government to the contractor. For the government, FFP provides budget certainty and simplifies financial management. However, contractors may build in a contingency premium to account for potential cost overruns, which could result in a higher initial price compared to other contract types like cost-plus. For software development, FFP can be effective when requirements are well-defined, but it may disincentivize scope changes or innovation if not managed carefully.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA822417R0030

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 505 KING AVENUE, COLUMBUS, OH, 43201

Business Categories: Category Business, Corporate Entity Tax Exempt, Manufacturer of Goods, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,091,296

Exercised Options: $24,552,837

Current Obligation: $23,616,222

Actual Outlays: $3,487,384

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $4,536,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline