GSA's $34.6M IT contract for computer systems awarded to HPE Government, LLC, faced limited competition

Contract Overview

Contract Amount: $34,621,566 ($34.6M)

Contractor: HPE Government, LLC

Awarding Agency: General Services Administration

Start Date: 2009-01-29

End Date: 2009-12-16

Contract Duration: 321 days

Daily Burn Rate: $107.9K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TECHNOLOGY INSERTION (TI) 09 COMPUTER SYSTEM

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55485, UNITED STATES OF AMERICA

State: Minnesota Government Spending

Plain-Language Summary

General Services Administration obligated $34.6 million to HPE GOVERNMENT, LLC for work described as: TECHNOLOGY INSERTION (TI) 09 COMPUTER SYSTEM Key points: 1. The contract's value of $34.6 million for computer systems represents a significant investment in federal IT infrastructure. 2. Awarded under a competitive delivery order, the procurement process involved multiple bidders, suggesting a degree of market engagement. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of the contract (321 days) indicates a relatively short-term need for the specified technology insertion. 5. The contract falls under the Electronic Computer Manufacturing NAICS code, highlighting its focus on hardware procurement. 6. The award to HPE Government, LLC, places it within the competitive landscape of federal IT hardware providers.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more granular data on the exact computer systems procured and their configurations. However, the $34.6 million price tag for a single delivery order suggests a substantial acquisition. Comparing it to similar large-scale IT hardware procurements by the GSA or other agencies would be necessary for a more precise value assessment. The firm fixed-price structure is a positive indicator for cost control, but the overall value for money depends on the performance and longevity of the delivered technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a 'Competitive Delivery Order,' indicating that while the initial contract vehicle may have been competed, this specific order likely had a limited number of participating bidders. The 'no' field showing 5 suggests there were 5 bids received for this specific order. While competitive, the limited number of bidders for a delivery order can sometimes lead to less aggressive pricing compared to a full and open competition for a new requirement.

Taxpayer Impact: A limited competition, even with 5 bidders, may result in higher prices for taxpayers than a broader, full-and-open competition. However, it still offers some price discovery and prevents a sole-source situation.

Public Impact

Federal agencies utilizing General Services Administration (GSA) schedules benefit from streamlined procurement of essential computer systems. The contract supports the operational needs of federal agencies by providing updated computer hardware. The geographic impact is likely nationwide, as GSA contracts serve various federal entities across the country. The contract supports the IT workforce involved in the deployment, maintenance, and utilization of these computer systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the technology insertion is proprietary.
Risk of obsolescence if the technology is not future-proofed.
Dependence on a single awardee for this specific technology insertion.

Positive Signals

Awarded under a competitive delivery order, indicating some level of market vetting.
Firm Fixed Price contract type helps control costs.
GSA schedules are designed for efficient and cost-effective procurement.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer hardware manufacturing and systems. The IT hardware market is highly competitive, with numerous large and small companies vying for government contracts. GSA's Federal Acquisition Service (FAS) plays a crucial role in consolidating IT purchasing power for federal agencies, often leveraging large-scale contracts like this to achieve economies of scale. The NAICS code 334111 (Electronic Computer Manufacturing) confirms the focus on hardware production.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb: false). While the prime contractor is HPE Government, LLC, a large entity, there is no explicit information on subcontracting plans for small businesses within this specific delivery order. The impact on the small business ecosystem would depend on whether HPE Government, LLC engages small businesses for any part of the fulfillment or support related to this contract.

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. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

GSA IT Schedule 70
Federal Civilian IT Procurement
Computer Hardware Procurement
Technology Modernization Contracts

Risk Flags

Limited Competition
Potential for Technology Obsolescence
Lack of Small Business Subcontracting Detail

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $34.6 million to HPE GOVERNMENT, LLC. TECHNOLOGY INSERTION (TI) 09 COMPUTER SYSTEM

Who is the contractor on this award?

The obligated recipient is HPE GOVERNMENT, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $34.6 million.

What is the period of performance?

Start: 2009-01-29. End: 2009-12-16.

What specific types of computer systems were procured under this contract, and what was their intended use?

The contract specifies 'TECHNOLOGY INSERTION (TI) 09 COMPUTER SYSTEM.' While the exact model or configuration is not detailed in the provided data, 'Technology Insertion' typically implies upgrading or replacing existing systems with newer, more advanced technology. This could range from servers and workstations to specialized computing hardware. The intended use would be to enhance the operational capabilities of federal agencies by providing more efficient, powerful, or secure computing resources, likely supporting various administrative, operational, or mission-critical functions.

How does the awarded price of $34.6 million compare to market rates for similar computer systems during the contract period (2009)?

Directly comparing the $34.6 million total award to precise market rates for specific computer systems in 2009 is difficult without knowing the exact specifications. However, GSA contracts often aim to leverage bulk purchasing power to secure favorable pricing. The fact that it was a competitive delivery order with 5 bids suggests some level of price negotiation occurred. To assess value, one would need to benchmark the unit costs of comparable systems from other vendors or government contracts active during that period. Given the scale, it's plausible that GSA achieved competitive pricing, but a detailed analysis would require more granular product information.

What is HPE Government, LLC's track record with GSA contracts, particularly for computer systems?

HPE Government, LLC (and its predecessors/affiliates) has a long-standing history of providing IT hardware and services to the federal government, often through GSA schedules. Their participation in numerous competitive solicitations and delivery orders indicates a significant presence in the federal IT market. A deeper dive into FPDS or GSA Advantage would reveal the volume and types of contracts they have held, their performance ratings on past contracts, and their success rate in competitive bids. Generally, established vendors like HPE are expected to meet performance and delivery requirements.

What were the primary risks associated with this technology insertion contract, and how were they mitigated?

Key risks for a technology insertion contract include potential for technical obsolescence if the chosen technology is not future-proof, integration challenges with existing systems, and performance issues. The mitigation strategies likely included the firm fixed-price contract type, which shifts some financial risk to the contractor. Additionally, the competitive nature of the award suggests that bidders proposed solutions meeting specific technical requirements. Robust testing and acceptance criteria within the contract would also serve to mitigate performance and integration risks. The relatively short duration (321 days) might also suggest a focus on a specific, manageable upgrade rather than a long-term, complex system overhaul.

How has GSA's spending on computer systems evolved since this contract was awarded in 2009?

Federal spending on IT, including computer systems, has generally increased significantly since 2009, driven by digital transformation initiatives, cloud adoption, cybersecurity needs, and the demand for more powerful computing resources. GSA's role has also evolved, with a greater emphasis on cloud services, software, and managed IT services alongside hardware. While specific figures for GSA's computer system spending would require detailed analysis of historical data, the overall trend indicates a growing market, with agencies continually seeking to modernize their infrastructure. This contract represents a snapshot of hardware procurement practices during a period of increasing IT investment.

Industry Classification

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

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 4QCF97094506

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Silicon Graphics International Corp. (UEI: 841322394)

Address: 12200 PLUM ORCHARD DR STE G, SILVER SPRING, MD, 20904

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,621,566

Exercised Options: $34,621,566

Current Obligation: $34,621,566

Parent Contract

Parent Award PIID: GS35F0325M

IDV Type: FSS

Timeline