DoD's $20.5M ERP support contract awarded to Global Management Services, LLC raises questions on competition and value

Contract Overview

Contract Amount: $20,498,993 ($20.5M)

Contractor: Global Management Services, LLC

Awarding Agency: Department of Defense

Start Date: 2014-03-27

End Date: 2017-07-31

Contract Duration: 1,222 days

Daily Burn Rate: $16.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF ENTERPRISE RESOURCE PLANNING (ERP) DEVELOPMENT AND SUPPORT 2 IN THE BUSINESS ENTERPRISE SYSTEMS (BES) DIRECTORATE SUPPORTING THE DEFENSE ENTERPRISE ACCOUNTING AND MANAGEMENT SYSTEM (DEAMS) FOR THE GLOBAL COMBAT SUPPORT SYSTEM-AIR FORCE (GCSS-AF) INTEGRATION FRAMEWORK IN ADDITION TO DEFENSE INFORMATION SYSTEMS AGENCY (DISA) DEFENSE ENTERPRISE COMPUTING CENTERS(DECC)

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99508

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to GLOBAL MANAGEMENT SERVICES, LLC for work described as: IGF::OT::IGF ENTERPRISE RESOURCE PLANNING (ERP) DEVELOPMENT AND SUPPORT 2 IN THE BUSINESS ENTERPRISE SYSTEMS (BES) DIRECTORATE SUPPORTING THE DEFENSE ENTERPRISE ACCOUNTING AND MANAGEMENT SYSTEM (DEAMS) FOR THE GLOBAL COMBAT SUPPORT SYSTEM-AIR FORCE (GCSS-AF) INTEGRATION FRAMEWORK… Key points: 1. The contract's value of $20.5 million over its period of performance warrants scrutiny for cost-effectiveness. 2. Awarded on a 'not available for competition' basis, the lack of open bidding limits price discovery and potentially inflates costs. 3. The fixed-price contract type offers some cost certainty but may not fully incentivize efficiency if the initial price was not competitive. 4. The duration of 1222 days suggests a significant, long-term need for these enterprise resource planning services. 5. The contract supports critical defense systems like DEAMS and GCSS-AF, indicating a high impact on operational readiness. 6. The absence of small business set-aside flags suggests limited direct benefit to the small business ecosystem for this specific award.

Value Assessment

Rating: questionable

The $20.5 million contract value for ERP development and support appears substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. However, the 'not available for competition' award basis raises concerns that the pricing may not have been subjected to the most rigorous market testing, potentially leading to a less favorable price than could have been achieved through open competition. The firm fixed-price nature provides some cost control, but the overall value proposition is weakened by the limited competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, indicating that a sole-source justification was likely used. This means that only one vendor, Global Management Services, LLC, was considered for this award. The lack of open competition limits the government's ability to explore a wider range of solutions and pricing options, potentially resulting in higher costs for taxpayers and a less optimal outcome than could be achieved through a competitive process.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings and innovation that typically arise from a competitive bidding environment. This can lead to higher overall spending for the same or similar services.

Public Impact

The primary beneficiaries are the Department of the Air Force and the wider Department of Defense, which receive essential support for critical enterprise resource planning systems. Services delivered include development and support for the Defense Enterprise Accounting and Management System (DEAMS) and the Global Combat Support System-Air Force (GCSS-AF) integration framework. The geographic impact is likely global, given the nature of defense enterprise systems and the involvement of DISA DECC facilities. The contract supports specialized IT roles, potentially impacting a workforce skilled in ERP systems, cybersecurity, and defense logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits potential for innovation and better solutions.
Contract duration and value suggest significant reliance on a single vendor.
No indication of small business participation or subcontracting goals.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Supports critical defense enterprise systems, ensuring operational continuity.
Awarded to a single entity, potentially allowing for focused expertise and streamlined execution.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the IT industry supporting government operations. The market for ERP development and support is substantial, with numerous large and small firms offering specialized services. This contract's focus on defense-specific systems like DEAMS and GCSS-AF highlights a niche within the broader IT services market, often characterized by long-term relationships and high security requirements. Comparable spending benchmarks in this area are difficult to ascertain without more specific service details, but IT support for major defense systems typically represents significant government expenditure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that Global Management Services, LLC, the awardee, is likely not a small business, or if it is, the contract was not awarded under a small business set-aside program. Consequently, there are no direct subcontracting implications for small businesses mandated by this award. The absence of small business considerations in this sole-source award limits opportunities for the small business ecosystem to participate in supporting these critical defense IT systems.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Defense Contract Audit Agency (DCAA) may also conduct audits to ensure cost allowability and reasonableness, particularly given the contract's value. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Enterprise Accounting and Management System (DEAMS)
Global Combat Support System-Air Force (GCSS-AF)
Defense Information Systems Agency (DISA) Enterprise Computing Centers (DECC)
Enterprise Resource Planning (ERP) Systems Support
Business Enterprise Systems (BES) Directorate

Risk Flags

Sole-source award limits competition.
Potential for uncompetitive pricing.
Lack of transparency in vendor selection.
No small business set-aside.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to GLOBAL MANAGEMENT SERVICES, LLC. IGF::OT::IGF ENTERPRISE RESOURCE PLANNING (ERP) DEVELOPMENT AND SUPPORT 2 IN THE BUSINESS ENTERPRISE SYSTEMS (BES) DIRECTORATE SUPPORTING THE DEFENSE ENTERPRISE ACCOUNTING AND MANAGEMENT SYSTEM (DEAMS) FOR THE GLOBAL COMBAT SUPPORT SYSTEM-AIR FORCE (GCSS-AF) INTEGRATION FRAMEWORK IN ADDITION TO DEFENSE INFORMATION SYSTEMS AGENCY (DISA) DEFENSE ENTERPRISE COMPUTING CENTERS(DECC)

Who is the contractor on this award?

The obligated recipient is GLOBAL MANAGEMENT SERVICES, 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 $20.5 million.

What is the period of performance?

Start: 2014-03-27. End: 2017-07-31.

What is the track record of Global Management Services, LLC in supporting large-scale defense ERP systems?

Information regarding the specific track record of Global Management Services, LLC in supporting large-scale defense ERP systems is not detailed in the provided data. To assess their capability and past performance, a review of their contract history, client testimonials, and any performance evaluations would be necessary. Given this is a sole-source award, it implies a pre-existing relationship or a specific capability that the agency believed only this contractor could fulfill. Further investigation into their prior work on similar systems, such as DEAMS or GCSS-AF, or other ERP implementations within the DoD or other federal agencies, would be crucial for a comprehensive understanding of their expertise and reliability in this domain.

How does the $20.5 million contract value compare to similar ERP support contracts within the DoD?

Benchmarking the $20.5 million contract value for ERP development and support requires access to a broader dataset of comparable contracts. Factors such as the specific modules supported, the number of users, the complexity of integrations, and the duration of the contract significantly influence pricing. Without these details and a comparative analysis of similar sole-source or competitively awarded ERP contracts within the Department of Defense, it is challenging to definitively state whether this value is high or low. However, given the critical nature of defense ERP systems and the specialized expertise required, such contract values are not uncommon, though the lack of competition warrants careful scrutiny of the pricing justification.

What are the primary risks associated with awarding a significant IT support contract on a sole-source basis?

The primary risks associated with awarding a significant IT support contract on a sole-source basis include: 1. **Higher Costs:** Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to inflated costs for the government. 2. **Limited Innovation:** The absence of multiple bidders can stifle innovation, as the government may not be exposed to a wider range of technological solutions or more efficient service delivery methods. 3. **Vendor Lock-in:** A sole-source award can create dependency on a single vendor, making it difficult and costly to switch providers in the future, even if performance declines. 4. **Reduced Accountability:** While oversight mechanisms exist, the lack of competitive pressure can sometimes reduce a contractor's urgency to meet or exceed performance expectations. 5. **Potential for Suboptimal Solutions:** The government might not secure the best-fit solution available in the market if alternatives were not explored.

What is the expected effectiveness of the ERP development and support services provided under this contract for DEAMS and GCSS-AF?

The expected effectiveness of the ERP development and support services hinges on the contractor's ability to maintain and enhance the functionality, reliability, and security of the DEAMS and GCSS-AF systems. These systems are critical for financial management and combat support within the Air Force, respectively. Effective service delivery should translate into improved data accuracy, streamlined processes, enhanced decision-making capabilities, and robust cybersecurity. The contract's firm fixed-price nature suggests an expectation of defined deliverables and performance standards. However, the ultimate effectiveness will depend on the quality of the vendor's execution, the clarity of requirements, and the government's own program management and oversight.

How has historical spending on ERP systems within the Air Force's Business Enterprise Systems Directorate evolved?

Analyzing historical spending patterns for ERP systems within the Air Force's Business Enterprise Systems (BES) Directorate is crucial for contextualizing the $20.5 million awarded to Global Management Services, LLC. While the provided data focuses on a single contract, a comprehensive review would involve examining spending trends over several fiscal years. This would include identifying the total budget allocated to ERP initiatives, the number and value of contracts awarded (both competitive and sole-source), and the specific systems being supported (like DEAMS and GCSS-AF). Understanding this historical context can reveal whether spending has been increasing or decreasing, whether there's a trend towards sole-source awards, and how this particular contract fits into the broader financial landscape of the BES Directorate's IT investments.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4600 DEBARR RD STE 200, ANCHORAGE, AK, 99508

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, American Indian Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,498,993

Exercised Options: $20,498,993

Current Obligation: $20,498,993

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline