DoD awards $6.16M for Cloud Sustainment to Northstar Resources, raising competition concerns

Contract Overview

Contract Amount: $6,156,766 ($6.2M)

Contractor: Alaska Northstar Resources LLC

Awarding Agency: Department of Defense

Start Date: 2023-06-19

End Date: 2026-06-18

Contract Duration: 1,095 days

Daily Burn Rate: $5.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GB CLOUD SUSTAINMENT AND SUPPORT

Place of Performance

Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36114

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $6.2 million to ALASKA NORTHSTAR RESOURCES LLC for work described as: GB CLOUD SUSTAINMENT AND SUPPORT Key points: 1. Significant contract value for cloud sustainment services. 2. Sole-source award limits competitive pricing and innovation. 3. Potential for higher costs due to lack of competition. 4. IT sector spending on cloud infrastructure is substantial.

Value Assessment

Rating: questionable

The contract value of $6.16 million for cloud sustainment is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar cloud support contracts in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and may lead to less favorable terms for the government.

Taxpayer Impact: The lack of competition could result in taxpayers paying more than necessary for these essential cloud services.

Public Impact

Citizens may be paying a premium for cloud services due to limited competition. Lack of transparency in sole-source awards can erode public trust. Essential IT infrastructure support is being provided without competitive vetting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Limited price competition
Potential for cost overruns

Positive Signals

Essential IT service provision
Long-term contract duration

Sector Analysis

This contract falls within the IT sector, specifically cloud computing infrastructure and support. Spending in this area has grown significantly as government agencies increasingly rely on cloud solutions for data storage and processing.

Small Business Impact

The contract was awarded to ALASKA NORTHSTAR RESOURCES LLC. There is no indication that small businesses were involved as subcontractors or partners in this sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the price is fair and reasonable and that future opportunities are competed.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in vendor selection.
Risk of contractor complacency due to no competition.
Limited opportunity for small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.2 million to ALASKA NORTHSTAR RESOURCES LLC. GB CLOUD SUSTAINMENT AND SUPPORT

Who is the contractor on this award?

The obligated recipient is ALASKA NORTHSTAR RESOURCES 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 $6.2 million.

What is the period of performance?

Start: 2023-06-19. End: 2026-06-18.

What is the justification for the sole-source award, and has a market research report been conducted to confirm no other vendors could provide these services?

The provided data states the contract is 'NOT AVAILABLE FOR COMPETITION,' implying a justification exists, likely related to unique capabilities or existing infrastructure dependencies. However, without the specific justification document or a market research report, it's impossible to verify if a thorough analysis was performed to ensure no other vendors could meet the requirements or if competition was genuinely precluded.

How does the $6.16 million price compare to industry benchmarks for similar cloud sustainment and support services, especially considering the lack of competition?

Without competitive bids, directly benchmarking this $6.16 million contract is challenging. Industry prices for cloud sustainment vary widely based on service level agreements, scope, and provider. However, sole-source contracts often carry a premium. A detailed cost analysis comparing specific service components against market rates would be necessary to determine if the price is fair and reasonable.

What mechanisms are in place to ensure the effectiveness and quality of cloud sustainment services provided by ALASKA NORTHSTAR RESOURCES LLC under this sole-source contract?

Effectiveness and quality are typically ensured through Service Level Agreements (SLAs) within the contract, performance metrics, and regular government oversight. The Department of the Air Force would be responsible for monitoring performance against these SLAs and addressing any deficiencies. However, the lack of competitive pressure might reduce the incentive for the contractor to exceed basic performance standards.

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 › IT AND TELECOM - APLLICATIONS

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: 315 LINCOLN ST, SITKA, AK, 99835

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, 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: $10,845,740

Exercised Options: $6,668,148

Current Obligation: $6,156,766

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline