Air Force awards $46.6M contract for Enterprise Resource Planning (ERP) services to DLT Solutions, LLC

Contract Overview

Contract Amount: $46,609,491 ($46.6M)

Contractor: DLT Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2012-05-25

End Date: 2017-05-24

Contract Duration: 1,825 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AFSEL ERP ELA

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $46.6 million to DLT SOLUTIONS, LLC for work described as: AFSEL ERP ELA Key points: 1. Contract value represents a significant investment in critical IT infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Performance period of five years indicates a long-term need for these services. 4. The contract falls within the 'Other Computer Related Services' NAICS code, highlighting a specific IT niche. 5. Fixed-price contract type aims to control costs and provide budget certainty.

Value Assessment

Rating: good

The contract value of $46.6 million over five years averages to approximately $9.3 million annually. Benchmarking this against similar large-scale ERP implementations within the Department of Defense is challenging without more granular data on scope and specific services. However, the fixed-price nature suggests an attempt to manage costs effectively. The number of bids received (2) is on the lower side for a contract of this magnitude, which could imply either a highly specialized requirement or potential limitations in market reach.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Despite the full and open designation, only two bids were received. This limited number of bidders could suggest a specialized market, high barriers to entry for potential competitors, or that only a few firms possessed the necessary qualifications and capacity to bid on such a large and complex requirement.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers by encouraging broad participation and potentially lower prices, the low number of bidders warrants attention. It suggests that the government may not have achieved the full benefit of price competition that a larger pool of bidders would typically provide.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives essential IT support for its Enterprise Resource Planning system. Services delivered include 'Other Computer Related Services,' crucial for the functioning and maintenance of the ERP system. The geographic impact is primarily within the United States, supporting Air Force operations nationwide. Workforce implications include the need for skilled IT professionals to manage and maintain the ERP system, potentially supporting jobs within DLT Solutions, LLC and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) for a contract of this size and scope could indicate potential issues with market engagement or competition.
The specific nature of 'Other Computer Related Services' might require further definition to fully assess value and performance.

Positive Signals

Awarded under full and open competition, maximizing the opportunity for eligible contractors to participate.
Firm Fixed Price contract type provides cost certainty for the government.
Long performance period (5 years) suggests a stable and ongoing requirement, allowing for efficient service delivery and relationship building.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive and diverse. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a broad range of IT support, integration, and consulting services. The market for large-scale ERP solutions is dominated by a few major players, but specialized support services can be provided by a wider array of firms. The total federal spending on IT services is in the hundreds of billions annually, making this contract a relatively small portion of the overall IT expenditure but significant for the specific ERP system it supports.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, DLT Solutions, LLC, is not typically classified as a small business. There is no explicit mention of subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, though DLT may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Performance monitoring, delivery tracking, and invoice review are standard accountability measures. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air Force Enterprise Resource Planning (ERP) Systems
Department of Defense IT Services Contracts
Federal Civilian IT Services
IT Consulting and Integration Services

Risk Flags

Low number of bidders for a large contract
Potential for vendor lock-in if competition remains limited
Need for detailed performance metrics to assess value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.6 million to DLT SOLUTIONS, LLC. AFSEL ERP ELA

Who is the contractor on this award?

The obligated recipient is DLT SOLUTIONS, 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 $46.6 million.

What is the period of performance?

Start: 2012-05-25. End: 2017-05-24.

What is the track record of DLT Solutions, LLC in performing similar large-scale IT service contracts for the federal government?

DLT Solutions, LLC has a history of contracting with the federal government, often acting as a reseller and solutions provider for various IT products and services. Their experience typically involves supporting large enterprise systems, including ERP solutions, across multiple agencies. While specific performance metrics for past contracts are not detailed here, their longevity in the federal market suggests a capacity to meet contractual obligations. However, the nature of their business often involves partnerships and reselling, so direct performance of all services may vary. Further investigation into past performance reviews and contract close-outs would provide a more comprehensive understanding of their track record.

How does the awarded price compare to market rates for similar ERP support services?

Directly comparing the awarded price of $46.6 million over five years to market rates for 'Other Computer Related Services' is complex due to the broadness of the NAICS code and the specific nature of ERP support. ERP systems are highly specialized, and their maintenance and enhancement costs can vary significantly based on the software, customization, and scale of the implementation. Without detailed service level agreements, scope of work, and specific deliverables, a precise market rate comparison is difficult. However, the average annual cost of approximately $9.3 million suggests a substantial investment, typical for supporting complex enterprise systems within a large federal agency like the Air Force.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for IT service contracts, especially those supporting ERP systems, KPIs would focus on system availability, uptime, response times for issue resolution, successful implementation of upgrades or new features, data integrity, and user satisfaction. The firm fixed-price nature of the contract implies that the contractor is responsible for delivering the defined scope of work within the agreed-upon budget, and performance would be measured against the contractual requirements and service level agreements (SLAs) that are part of the full contract documentation.

What is the historical spending pattern for ERP services within the Department of the Air Force?

Historical spending on ERP services within the Department of the Air Force is likely substantial and has evolved over time as systems are implemented, maintained, and upgraded. Agencies like the Air Force invest heavily in ERP systems to manage financial, logistical, and human resources. Spending patterns would reflect initial implementation costs, ongoing maintenance and support contracts, and periodic modernization efforts. Without access to historical Air Force budget data specifically itemized for ERP, it's difficult to provide precise figures. However, it's reasonable to assume consistent, multi-million dollar annual expenditures dedicated to maintaining and enhancing these critical enterprise systems.

What are the potential risks associated with a sole-source or limited-competition award for critical IT infrastructure?

While this contract was awarded under full and open competition, the low number of bidders (2) raises concerns similar to those of limited competition. Risks associated with limited competition for critical IT infrastructure include potentially higher costs due to reduced price pressure, less innovation from a smaller pool of vendors, and increased vendor lock-in. If the incumbent contractor faces performance issues or goes out of business, finding a replacement with the necessary expertise could be challenging and costly. This underscores the importance of robust market research and strategies to encourage broader participation in future procurements.

How does this contract align with the Air Force's broader IT modernization goals?

This contract for ERP services directly supports the Air Force's foundational IT infrastructure, which is essential for its modernization goals. Modernizing ERP systems often involves upgrading to cloud-based solutions, enhancing data analytics capabilities, and improving integration with other defense systems. By ensuring the continued support and potential enhancement of its ERP, the Air Force is maintaining a critical operational capability that underpins many of its strategic initiatives. The specific alignment would depend on the contract's scope, such as whether it includes upgrades, migrations, or simply ongoing maintenance and support.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DLT Mergerco LLC (UEI: 079720068)

Address: 2411 DULLES CORNER PARK STE 800, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $46,609,491

Exercised Options: $46,609,491

Current Obligation: $46,609,491

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F4543G

IDV Type: FSS

Timeline