DoD's $71.1M custom computer programming contract awarded to ARTEL LLC shows fair value with 2 bidders

Contract Overview

Contract Amount: $71,122,251 ($71.1M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2015-02-03

End Date: 2020-02-15

Contract Duration: 1,838 days

Daily Burn Rate: $38.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF 324 MHZ KU

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $71.1 million to ARTEL LLC for work described as: IGF::OT::IGF 324 MHZ KU Key points: 1. Contract value of $71.1M over 5 years suggests a moderate annual spend. 2. Competition was robust with 2 bidders, indicating a healthy market for these services. 3. The contract type is Firm Fixed Price, which transfers risk to the contractor. 4. Performance is in Virginia, a key hub for defense IT services. 5. The NAICS code 541511 points to specialized custom computer programming. 6. This contract represents a significant investment in specialized IT capabilities for the Defense Information Systems Agency.

Value Assessment

Rating: good

The contract's total value of $71.1 million over approximately five years averages to about $14.2 million annually. While specific benchmarks for custom computer programming services are difficult to ascertain without detailed scope, the presence of two bidders suggests a competitive environment that likely drove a reasonable price. The firm fixed-price nature of the contract also indicates that the contractor bears the risk of cost overruns, which is generally favorable for the government. Further analysis would require comparing the specific deliverables and technical requirements against similar contracts.

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. With two bidders, the competition level was moderate. While more bidders could potentially lead to lower prices, two bidders still provide a basis for price discovery and comparison. The Defense Information Systems Agency likely evaluated proposals based on a combination of technical merit and price to ensure the best value.

Taxpayer Impact: The full and open competition with two bidders suggests that taxpayers received a fair price, as the government had options and the contractor had an incentive to be competitive. However, a higher number of bidders could have potentially yielded even greater savings.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency, which receives custom computer programming services. These services are crucial for maintaining and enhancing the agency's IT infrastructure and operational capabilities. The geographic impact is concentrated in Virginia, where the contract performance is located. The contract supports skilled jobs in the custom computer programming sector, contributing to the IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Dependence on a single contractor for critical custom programming services could pose a risk if performance issues arise.
Ensuring the custom solutions remain adaptable to future technological advancements.

Positive Signals

Firm Fixed Price contract structure transfers cost risk to the contractor.
Full and open competition indicates a structured procurement process.
The contract duration of approximately five years allows for stability in service delivery.
Awarded to ARTEL LLC, whose performance history would need further review for specific strengths.

Sector Analysis

The custom computer programming services sector is a vital component of the broader IT industry, supporting government and commercial entities with specialized software development and integration. This contract falls within the IT services market, which is characterized by rapid innovation and a demand for skilled labor. The Defense Information Systems Agency's spending on such services is indicative of the critical role technology plays in modern defense operations. Benchmarking this contract's value would require detailed analysis of the specific programming tasks and their complexity relative to industry standards.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the nature of custom computer programming for a major defense agency, it is possible that larger, specialized firms like ARTEL LLC are better positioned to handle the scope and complexity. Further investigation into subcontracting opportunities for small businesses would be beneficial.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency's contracting officers and program managers. The Inspector General of the Department of Defense may also conduct audits or investigations into contract performance and financial management. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics are often internal.

Related Government Programs

Defense Information Systems Agency IT Services
Department of Defense Software Development Contracts
Custom Computer Programming Services
Federal IT Infrastructure Support

Risk Flags

Contract performance risk
Cost overrun potential (mitigated by FFP)
Dependency on contractor's specialized skills

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.1 million to ARTEL LLC. IGF::OT::IGF 324 MHZ KU

Who is the contractor on this award?

The obligated recipient is ARTEL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $71.1 million.

What is the period of performance?

Start: 2015-02-03. End: 2020-02-15.

What is the track record of ARTEL LLC in delivering custom computer programming services to the federal government, particularly within the Department of Defense?

A comprehensive review of ARTEL LLC's past performance is crucial for assessing the risk associated with this contract. This would involve examining previous federal contracts awarded to ARTEL, focusing on their successful completion, adherence to timelines and budgets, and any documented performance issues or disputes. Specifically, looking at contracts with the Defense Information Systems Agency (DISA) or other DoD components for similar custom programming services would provide the most relevant insights. Government performance evaluations, such as Contractor Performance Assessment Reporting System (CPARS) reports, would offer detailed feedback from previous agencies on ARTEL's capabilities, management, and overall reliability. Without access to these specific performance records, it is difficult to definitively assess their track record beyond the fact of this award.

How does the average annual value of this contract compare to similar custom computer programming contracts awarded by the DoD or other federal agencies?

The average annual value of this contract is approximately $14.2 million ($71.1M / 5 years). To benchmark this, one would need to compare it against contracts for custom computer programming services with similar scope, complexity, and duration awarded by the Department of Defense or other federal agencies. Factors such as the specific programming languages, systems integration requirements, security protocols, and the level of customization involved would need to be considered. For instance, contracts focused on developing highly classified systems or integrating complex legacy systems might command higher annual values. Conversely, contracts for more standardized software development or maintenance might be lower. Accessing detailed contract data from sources like the Federal Procurement Data System (FPDS) or specialized market research reports would be necessary for a robust comparison.

What are the primary risks associated with a firm fixed-price contract for custom computer programming, and how are they mitigated in this case?

The primary risk in a firm fixed-price (FFP) contract for custom computer programming is that the contractor may incur costs exceeding the agreed-upon price, potentially leading to reduced quality, corner-cutting, or even contractor default if the overrun is substantial. For the government, the risk is receiving a product or service that does not fully meet requirements due to the contractor's cost-saving measures. Mitigation strategies often include clearly defined statements of work (SOW), detailed technical specifications, robust quality assurance processes, and regular progress monitoring by the government. For this specific contract, the presence of two bidders suggests a competitive environment that may have incentivized ARTEL LLC to price realistically. The Defense Information Systems Agency's oversight and acceptance criteria would be critical in ensuring the delivered programming meets the required standards despite the FFP structure.

What is the potential impact of this contract on the broader federal IT services market, particularly concerning competition and innovation?

This contract, awarded under full and open competition with two bidders, suggests a moderately competitive segment within the federal IT services market for custom computer programming. The award to ARTEL LLC signifies a significant opportunity for the contractor, potentially enhancing their reputation and capacity for future large-scale government projects. From a market perspective, it indicates a demand for specialized programming skills within the DoD. The competition level, while not extremely high, still provides a mechanism for price discovery and encourages contractors to offer competitive solutions. Regarding innovation, the success of this contract will depend on how well the custom solutions developed by ARTEL LLC meet evolving defense needs and integrate with new technologies. The government's requirements and ARTEL's ability to deliver cutting-edge solutions will ultimately shape the impact on innovation in this niche.

How has federal spending on custom computer programming services, as represented by this contract, trended over the past five years, and what does this specific award suggest about current spending pa

Federal spending on custom computer programming services has generally been substantial and consistent, driven by the ongoing need for tailored software solutions across various agencies, particularly in defense and intelligence. This contract, awarded in 2015 with an end date in 2020, reflects a period where significant investments were being made in modernizing IT systems and developing specialized applications. The total value of $71.1 million over five years indicates a substantial, but not exceptionally large, commitment for a project of this nature within the DoD. Current spending patterns, based on broader trends, continue to emphasize digital transformation, cybersecurity, and advanced analytics, all of which rely heavily on custom programming. This specific award suggests that agencies like DISA continue to procure bespoke software solutions to meet unique operational requirements, rather than relying solely on off-the-shelf products.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Artel, LLC

Address: 13665 DULLES TECHNOLOGY DR STE 300, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,122,251

Exercised Options: $71,122,251

Current Obligation: $71,122,251

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5151H

IDV Type: FSS

Timeline