GSA awards $29.5M contract for electronic computer manufacturing to CRAY INC

Contract Overview

Contract Amount: $29,492,246 ($29.5M)

Contractor: Cray Inc.

Awarding Agency: General Services Administration

Start Date: 2008-02-13

End Date: 2009-01-03

Contract Duration: 325 days

Daily Burn Rate: $90.7K/day

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TI-08

Place of Performance

Location: LORTON, FAIRFAX County, VIRGINIA, 22079

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $29.5 million to CRAY INC. for work described as: TI-08 Key points: 1. Contract value represents a significant investment in specialized computing hardware. 2. Competition dynamics for this contract are not immediately clear from the provided data. 3. The contract duration of 325 days suggests a focused, short-term requirement. 4. Fixed-price contract type indicates a defined scope and cost structure. 5. The award to CRAY INC. suggests a need for high-performance computing capabilities. 6. This award falls under the Federal Acquisition Service, indicating a centralized procurement approach.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the hardware procured and its intended use. The raw dollar amount of $29.5 million is substantial, but its value-for-money depends heavily on the performance and longevity of the electronic computer systems. Comparing it to similar high-performance computing procurements would provide better context. The fixed-price nature suggests the government aimed to control costs, but the actual value realized depends on meeting performance specifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data does not specify the competition level for this contract. It is unclear if this was a full and open competition, a limited competition, or a sole-source award. The number of bidders and the procurement method significantly influence price discovery and the potential for obtaining the best value.

Taxpayer Impact: The level of competition directly impacts taxpayer dollars. Robust competition typically leads to lower prices and better terms, maximizing the value of federal investments. Limited or sole-source awards may result in higher costs.

Public Impact

Federal agencies requiring advanced computing power for data processing and analysis are the primary beneficiaries. The contract delivers electronic computer hardware, likely high-performance computing systems. The geographic impact is likely concentrated where the hardware is deployed, potentially across various federal agency locations. Workforce implications may include IT specialists for installation, maintenance, and operation of the new systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding competition could hide potential overspending.
Specific performance metrics and their achievement are not detailed, making value assessment difficult.
The long-term support and maintenance costs associated with specialized hardware are not specified.

Positive Signals

Fixed-price contract type helps manage cost certainty for the government.
Award to a known entity like CRAY INC. may indicate a reliance on specialized expertise.
The contract falls under GSA's Federal Acquisition Service, suggesting adherence to established procurement processes.

Sector Analysis

This contract falls within the Information Technology sector, specifically electronic computer manufacturing. The market for high-performance computing (HPC) is specialized, often dominated by a few key players capable of delivering the required processing power and architecture. Federal spending in this area supports critical national functions, including scientific research, intelligence analysis, and simulation. Comparable spending benchmarks would involve looking at other large-scale HPC procurements by agencies like the Department of Defense or national laboratories.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the specialized nature of electronic computer manufacturing, particularly high-performance computing, it is less likely to be a primary target for small business set-asides unless specific components or services were involved. Subcontracting opportunities for small businesses would depend on the prime contractor's strategy and the specific requirements of the hardware and its deployment.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. GSA has established procurement regulations and oversight mechanisms to ensure compliance and accountability. The contract's fixed-price nature provides a degree of cost control. Transparency would be enhanced by public contract databases and reporting requirements, though specific performance monitoring details are not provided here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

High-Performance Computing Modernization Program
IT Hardware Procurement
Federal Data Center Consolidation Initiative
General Services Administration Schedules

Risk Flags

Lack of competition details
Potential for technological obsolescence
Unclear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $29.5 million to CRAY INC.. TI-08

Who is the contractor on this award?

The obligated recipient is CRAY INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $29.5 million.

What is the period of performance?

Start: 2008-02-13. End: 2009-01-03.

What specific type of electronic computer system was procured under this contract, and what were its intended applications?

The contract ID TI-08 and the North American Industry Classification System (NAICS) code 334111 ('Electronic Computer Manufacturing') indicate the procurement of computer hardware. Given the vendor, CRAY INC., known for supercomputing, it is highly probable that this contract was for high-performance computing (HPC) systems. These systems are typically used for computationally intensive tasks such as scientific simulations (e.g., climate modeling, nuclear physics), complex data analysis, artificial intelligence, and cryptography. Without access to the detailed contract statement of work, the precise specifications and intended applications remain inferred based on the vendor's specialization and the general needs of federal agencies for advanced processing capabilities.

How does the award price of approximately $29.5 million compare to market rates for similar high-performance computing systems at the time of award (2008)?

Comparing the $29.5 million award to market rates in 2008 for high-performance computing (HPC) systems is complex due to the bespoke nature of such procurements. CRAY INC. systems are typically high-end, custom-configured solutions. In 2008, the HPC market was rapidly evolving. Large-scale supercomputer procurements could range from tens of millions to hundreds of millions of dollars depending on the processing power (measured in FLOPS), memory, storage, and interconnects. A system costing around $29.5 million would likely represent a mid-range to high-end HPC cluster or a specialized system for a specific agency's needs. To accurately benchmark, one would need to compare specifications like peak performance, node count, and architecture against publicly available pricing or data from similar government or academic procurements from that era.

What were the potential risks associated with this contract, and how might they have been mitigated?

Potential risks for this contract include technological obsolescence, as HPC technology advances rapidly; performance shortfalls if the system did not meet specified computational requirements; integration challenges with existing agency IT infrastructure; and potential cost overruns if the fixed-price contract had unforeseen complexities. Mitigation strategies could have included rigorous testing and acceptance criteria, phased delivery and payment schedules tied to performance milestones, strong vendor support and maintenance agreements, and ensuring the chosen architecture had a reasonable roadmap for future upgrades. The fixed-price nature itself is a risk mitigation tool for cost certainty, assuming the scope was well-defined.

What is CRAY INC.'s track record with federal government contracts, particularly for large-scale computing systems?

CRAY INC. has a long-standing history of providing supercomputing and high-performance computing solutions to the U.S. federal government. Agencies such as the Department of Energy (DOE) national laboratories (e.g., Oak Ridge, Lawrence Livermore), the National Oceanic and Atmospheric Administration (NOAA), and defense-related agencies have been significant customers. Their track record generally involves delivering complex, high-value systems tailored to specific scientific and national security missions. While specific contract performance details are often proprietary, CRAY's continued presence in the federal HPC market suggests a generally positive track record in meeting the demanding technical requirements of government clients, although like any large technology vendor, they may have faced challenges on specific projects.

How does this $29.5 million award fit into the broader context of federal spending on IT hardware and computing infrastructure around 2008?

In 2008, federal IT spending was substantial, driven by modernization efforts, cybersecurity needs, and the increasing demand for data processing capabilities across agencies. A $29.5 million award for specialized electronic computer manufacturing, likely HPC systems, represents a significant but not extraordinary portion of the overall federal IT budget. Agencies like the Department of Defense, intelligence agencies, and scientific research bodies (like DOE labs and NASA) are the primary consumers of such high-end systems. This contract aligns with the trend of agencies investing in advanced computing to support complex modeling, simulation, and data analytics, which were becoming increasingly critical for national security, scientific discovery, and economic competitiveness.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Contractor Details

Address: 411 1ST AVE S STE 600, SEATTLE, WA, 98104

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,492,246

Exercised Options: $29,492,246

Current Obligation: $29,492,246

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0196R

IDV Type: FSS

Timeline