DoD's $38.8M IT support contract awarded to Jacobs Technology Inc. lacked competition, raising value concerns

Contract Overview

Contract Amount: $38,841,283 ($38.8M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2015-09-28

End Date: 2017-09-30

Contract Duration: 733 days

Daily Burn Rate: $53.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: IT

Official Description: IGF::OT::IGF INTERIM SUPPORT SERVICES (ISS)

Place of Performance

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

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to JACOBS TECHNOLOGY INC. for work described as: IGF::OT::IGF INTERIM SUPPORT SERVICES (ISS) Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The IT support services provided are critical for ongoing defense operations. 3. The duration of the contract (733 days) suggests a need for stable, long-term support. 4. The lack of competition is a significant risk indicator for potential overspending. 5. The contract's value of $38.8 million warrants scrutiny regarding its cost-effectiveness. 6. The Computer Systems Design Services category is broad and can encompass various IT functions.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to benchmark the value for money received. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can also lead to cost overruns if not managed tightly. Comparing this to similar IT support contracts within the Department of Defense would be essential to determine if the pricing was fair and reasonable. The absence of competition suggests that taxpayers may not have received the best possible price for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Jacobs Technology Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. The lack of competition means there was no market pressure to drive down prices or encourage innovative solutions. It raises questions about whether alternative, potentially more cost-effective, solutions were overlooked.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through a competitive bidding process. This can result in higher overall spending for government services.

Public Impact

The Department of Defense benefits from the provision of essential IT support services. These services likely ensure the smooth functioning of critical defense systems and infrastructure. The contract's impact is primarily within the defense sector, supporting military operations. The workforce implications are tied to the personnel employed by Jacobs Technology Inc. to deliver these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can reduce transparency and accountability in government spending.
The CPFF contract type carries inherent risks of cost escalation if not rigorously monitored.
Absence of market benchmarking makes it difficult to assess true value for money.

Positive Signals

Jacobs Technology Inc. is a known entity in government contracting, suggesting some level of established capability.
The contract duration implies a recognized need for sustained IT support within the agency.
The specific IT services provided are crucial for defense operations, indicating a focus on essential functions.

Sector Analysis

The IT services sector is a significant area of government spending, encompassing a wide range of support, development, and maintenance activities. Contracts for computer systems design services, like this one, are crucial for maintaining the technological backbone of federal agencies. The market for these services is competitive, but sole-source awards can circumvent this dynamic. Benchmarking this contract's value against similar IT support contracts awarded through full and open competition would provide a clearer picture of its cost-effectiveness.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses based on the provided data. The award to a large contractor like Jacobs Technology Inc. suggests that the primary focus was on capability and potentially past performance rather than fostering small business participation. This contract does not appear to contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet their obligations. The specific oversight mechanisms for a sole-source, CPFF contract would involve detailed monitoring of costs, performance, and adherence to contract terms. Transparency is limited due to the lack of a competitive process, and accountability relies heavily on the effectiveness of DCMA's oversight and the contractor's internal controls.

Related Government Programs

IT Support Services
Computer Systems Design Services
Defense IT Modernization
Information Technology Infrastructure

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (CPFF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to JACOBS TECHNOLOGY INC.. IGF::OT::IGF INTERIM SUPPORT SERVICES (ISS)

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2015-09-28. End: 2017-09-30.

What is the track record of Jacobs Technology Inc. in providing similar IT support services to the Department of Defense?

Jacobs Technology Inc. has a significant history of contracting with the U.S. government, including the Department of Defense, across various service areas. For IT support and computer systems design, their track record generally indicates experience in managing complex projects. However, the specific performance metrics and quality of service for this particular $38.8 million contract, awarded sole-source, are not detailed here. A deeper dive into past performance reviews, any documented issues or commendations, and the success rates of their previous IT-related contracts would be necessary for a comprehensive assessment. Without this granular data, it's challenging to definitively state their overall effectiveness on this specific engagement beyond the fact that the contract was completed.

How does the $38.8 million contract value compare to similar IT support contracts awarded competitively by the DoD?

Direct comparison of this $38.8 million contract value to competitively awarded contracts is challenging due to its sole-source nature. Competitive bidding typically drives prices down, meaning a similar scope of work procured through full and open competition might have resulted in a lower overall cost. To perform a robust comparison, one would need to identify contracts with identical or highly similar service descriptions (e.g., computer systems design, IT infrastructure support) awarded within the same timeframe to comparable agencies within the DoD. Factors such as contract duration, specific deliverables, and geographic scope would need to be matched as closely as possible. Given the lack of competition here, it is plausible that the price paid was higher than what could have been achieved through a competitive process.

What are the primary risks associated with a sole-source award for IT support services valued at $38.8 million?

The primary risk associated with a sole-source award of this magnitude is the potential for inflated costs due to the absence of price competition. Without multiple bidders vying for the contract, the contractor may have less incentive to offer the most competitive pricing. Another significant risk is the potential for reduced innovation, as there is no market pressure to develop novel or more efficient solutions. Furthermore, sole-source awards can sometimes indicate a lack of adequate market research or planning, potentially leading to suboptimal contract structures or service delivery. There's also a risk of contractor complacency, as the lack of competitive threat might reduce the impetus for continuous improvement in service quality and efficiency.

What was the justification for awarding this $38.8 million IT support contract on a sole-source basis?

The provided data does not include the specific justification for awarding this $38.8 million IT support contract on a sole-source basis. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency. Common justifications include unique capabilities possessed by the contractor, the need to maintain continuity of essential services where switching contractors would be detrimental, or in situations where a public exigency would not permit a delay incident to competitive solicitation. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the precise rationale.

How does the contract type (Cost Plus Fixed Fee) influence the risk and value proposition for this $38.8 million IT support contract?

The Cost Plus Fixed Fee (CPFF) contract type for this $38.8 million IT support contract presents a mixed risk and value proposition. On the one hand, it allows for flexibility in scope, which can be beneficial for IT projects where requirements may evolve. The fixed fee provides the contractor with a predictable profit margin. However, the 'cost-plus' element means the government reimburses the contractor for all allowable costs incurred, plus the agreed-upon fixed fee. This structure carries a significant risk of cost overruns if the contractor's costs are not meticulously managed and scrutinized by the government. The value proposition is weakened by the potential for costs to escalate beyond initial estimates, especially in a sole-source environment where competitive pressure to control costs is absent. Effective oversight is paramount to mitigate these risks.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 10 TARA BLVD STE 200, NASHUA, NH, 03062

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

Financial Breakdown

Contract Ceiling: $54,682,432

Exercised Options: $54,682,432

Current Obligation: $38,841,283

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline