DoD's $26.5M MROI Contract with Diligent Consulting Faces Scrutiny Over Custom Programming Services

Contract Overview

Contract Amount: $26,491,770 ($26.5M)

Contractor: Diligent Consulting, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-07-11

End Date: 2020-09-16

Contract Duration: 798 days

Daily Burn Rate: $33.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: MAINTENANCE, REPAIR, AND OVERHAUL INITIATIVE (MROI)

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78209

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to DILIGENT CONSULTING, INC. for work described as: MAINTENANCE, REPAIR, AND OVERHAUL INITIATIVE (MROI) Key points: 1. The contract for Maintenance, Repair, and Overhaul Initiative (MROI) is valued at $26.5 million. 2. Competition was 'Full and Open Competition After Exclusion of Sources', raising questions about true market reach. 3. The contract type is 'Cost Plus Incentive Fee', which can lead to cost overruns if not managed tightly. 4. The NAICS code 541511 points to Custom Computer Programming Services, a sector with varying cost benchmarks.

Value Assessment

Rating: questionable

The Cost Plus Incentive Fee structure requires careful monitoring to ensure costs remain reasonable. Benchmarking against similar custom programming contracts is essential to validate the $26.5 million award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The 'Full and Open Competition After Exclusion of Sources' method suggests that while competition was sought, specific conditions limited the pool of bidders. This could impact price discovery and potentially lead to higher costs than a truly open competition.

Taxpayer Impact: The incentive fee structure and limited competition raise concerns about optimal taxpayer value. Effective oversight is needed to ensure costs are justified.

Public Impact

Taxpayers may be paying more than necessary due to the limited competition and incentive fee structure. The effectiveness of the MROI initiative's custom programming services needs to be evaluated against its stated goals. The Department of the Air Force's procurement process for this contract warrants further examination for fairness and efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition method
Cost Plus Incentive Fee contract type
Lack of clear performance metrics for MROI initiative

Positive Signals

Contract awarded to a specific entity for a defined initiative
Defined contract duration and delivery order structure

Sector Analysis

This contract falls under Custom Computer Programming Services, a sector where costs can vary significantly based on complexity and expertise. Benchmarking against industry standards for similar IT services is crucial for assessing value.

Small Business Impact

The data provided does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation is needed to assess small business participation.

Oversight & Accountability

The 'Cost Plus Incentive Fee' structure necessitates robust oversight to manage costs and ensure contractor performance aligns with incentives. The 'Exclusion of Sources' clause requires justification and monitoring to prevent undue limitations on competition.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for inflated costs due to Cost Plus Incentive Fee structure.
Limited competition may have restricted price discovery.
Lack of transparency regarding the exclusion of sources.
Need for clear performance metrics to justify incentive fees.
Uncertainty about the actual value delivered by the custom programming services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to DILIGENT CONSULTING, INC.. MAINTENANCE, REPAIR, AND OVERHAUL INITIATIVE (MROI)

Who is the contractor on this award?

The obligated recipient is DILIGENT CONSULTING, 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 $26.5 million.

What is the period of performance?

Start: 2018-07-11. End: 2020-09-16.

What specific criteria led to the exclusion of certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?

The exclusion of sources suggests that specific technical capabilities or pre-existing relationships may have been prioritized, potentially limiting the bidder pool. This can reduce competitive pressure, leading to a higher price than if a broader range of vendors had been eligible. A thorough review of the justification for exclusion is necessary to understand its pricing implications.

How effectively are the incentive fees structured to drive desired outcomes for the MROI initiative, and what mechanisms are in place to prevent cost overruns?

The effectiveness of incentive fees hinges on clearly defined, measurable performance metrics directly tied to the MROI initiative's goals. Robust oversight is critical to monitor contractor progress against these metrics and to ensure that incentive payments are earned and justified. Without stringent controls, cost-plus contracts, especially with incentives, can lead to escalating expenses.

What is the measurable impact of the custom computer programming services provided under this contract on the Department of the Air Force's maintenance, repair, and overhaul operations?

Assessing the impact requires defining key performance indicators (KPIs) for the MROI initiative, such as reduced downtime, improved efficiency in repair processes, or cost savings in maintenance. Without these metrics, it's difficult to determine if the $26.5 million investment has yielded tangible benefits or if the programming services have effectively addressed the intended operational challenges.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA877015R1011

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 901 NE LOOP 410 STE 600, SAN ANTONIO, TX, 78209

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

Financial Breakdown

Contract Ceiling: $46,652,427

Exercised Options: $26,841,419

Current Obligation: $26,491,770

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877112D1003

IDV Type: IDC

Timeline