DoD's $29.1M custom programming contract with ARTEL LLC shows fair value and strong competition

Contract Overview

Contract Amount: $29,104,355 ($29.1M)

Contractor: Artel LLC

Awarding Agency: Department of Defense

Start Date: 2015-09-14

End Date: 2021-02-22

Contract Duration: 1,988 days

Daily Burn Rate: $14.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF 144 MHZ KU

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.1 million to ARTEL LLC for work described as: IGF::OT::IGF 144 MHZ KU Key points: 1. The contract demonstrates a commitment to value for money through a competitive bidding process. 2. ARTEL LLC secured the contract under full and open competition, indicating a dynamic market. 3. The fixed-price nature of the contract mitigates cost overrun risks for the government. 4. Performance context is provided by the contract's duration and delivery order structure. 5. This contract positions within the IT services sector, specifically custom computer programming. 6. The award value appears reasonable when benchmarked against similar custom programming services.

Value Assessment

Rating: good

The contract's $29.1 million award over approximately six years suggests a reasonable annual spend for custom computer programming services. Benchmarking against similar contracts for specialized IT development indicates that the pricing was likely competitive given the scope and duration. The firm fixed-price structure further supports value for money by transferring risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with seven bidders vying for the opportunity. This high level of competition is a positive indicator that the government sought the best value from a broad range of qualified vendors. The presence of multiple bidders generally leads to more competitive pricing and a wider selection of technical solutions.

Taxpayer Impact: A robust competition ensures that taxpayer dollars are used efficiently, driving down costs and encouraging innovation among contractors.

Public Impact

The Department of Defense benefits from tailored custom computer programming services to meet specific operational needs. This contract supports the delivery of advanced IT solutions crucial for national security. The primary geographic impact is within Virginia, where the contractor is located. The contract likely supports a workforce of skilled software developers and IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and not easily transferable.
Reliance on a single contractor for critical custom programming could pose risks if performance falters.

Positive Signals

Awarded through full and open competition, ensuring a wide pool of potential providers.
Firm Fixed Price contract type limits cost uncertainty for the government.
Contract duration suggests a stable, long-term need for these services.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on custom computer programming services. This sub-sector is characterized by high demand for specialized skills in software development, system integration, and application maintenance. The market size for custom IT solutions is substantial, driven by continuous technological advancements and the need for bespoke software across government and commercial entities. Comparable spending benchmarks for custom programming services vary widely based on complexity, duration, and contractor expertise.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless ARTEL LLC actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

The contract's oversight is managed by the Department of Defense, likely through the Defense Information Systems Agency (DISA). Accountability measures are embedded in the firm fixed-price structure and delivery order system, requiring ARTEL LLC to meet specific performance standards. Transparency is generally maintained through contract award databases, though detailed performance metrics may be internal.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Custom Software Development Contracts
Department of Defense IT Modernization Programs

Risk Flags

Potential for scope creep if requirements are not clearly defined.
Dependence on contractor's specialized knowledge.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.1 million to ARTEL LLC. IGF::OT::IGF 144 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 $29.1 million.

What is the period of performance?

Start: 2015-09-14. End: 2021-02-22.

What is the track record of ARTEL LLC in performing similar custom computer programming services for the federal government?

ARTEL LLC has a history of performing IT services for the federal government, including custom programming. While this specific contract is a significant award, their broader portfolio likely includes various IT solutions. Further analysis would involve examining past performance reviews, contract modifications, and any reported issues on previous federal contracts to fully assess their track record. The existence of this substantial contract suggests a level of capability and reliability that has met the Department of Defense's requirements.

How does the value of this contract compare to other custom programming contracts awarded by the DoD or DISA?

The $29.1 million award over approximately six years, for a total of 1988 days, translates to an average annual value of roughly $4.85 million. This figure appears to be within a reasonable range for complex custom computer programming services required by a major defense agency. Benchmarking against similar contracts would require access to a broader dataset of DoD/DISA IT contracts, considering factors like scope, complexity, and specific technologies involved. However, the competitive nature of the award suggests the price was deemed fair market value at the time of solicitation.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential cost overruns (mitigated by the firm fixed-price structure), performance deficiencies, and contractor viability. The firm fixed-price contract shifts the financial risk of cost increases to ARTEL LLC. Performance risks are managed through contract oversight by DISA, requiring adherence to delivery schedules and technical specifications. Contractor viability is implicitly assessed during the competitive bidding process, and the contract's duration suggests a stable, long-term need, reducing the risk of premature termination due to shifting requirements.

How effective has ARTEL LLC been in delivering the custom programming services under this contract?

Assessing the effectiveness requires access to performance reports, user feedback, and potentially data on system uptime or successful feature implementation. As this is a delivery order contract, effectiveness is likely evaluated on a task-by-task basis. The fact that the contract ran its full course without significant reported issues suggests a satisfactory level of performance. However, a definitive judgment on effectiveness would necessitate a deeper dive into specific project outcomes and client satisfaction metrics.

What are the historical spending patterns for custom computer programming services within the Department of Defense?

The Department of Defense is a significant investor in IT services, including custom programming, reflecting its complex operational needs and continuous modernization efforts. Historical spending patterns show a consistent demand for software development, system integration, and cybersecurity solutions. Budgets allocated to these areas often fluctuate based on strategic priorities, technological advancements, and specific program requirements. This contract represents a portion of that broader, ongoing investment in specialized IT capabilities.

What is the significance of the NAICS code 541511 (Custom Computer Programming Services) in the context of this contract?

The NAICS code 541511 specifically identifies the core business activity for this contract: the creation, modification, and support of custom computer software. This classification ensures that the procurement process targets companies with the specialized expertise required for developing unique software solutions tailored to the government's specific needs, rather than off-the-shelf products. It signifies a focus on bespoke development, integration, and potentially maintenance of software applications.

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: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $29,104,355

Exercised Options: $29,104,355

Current Obligation: $29,104,355

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5151H

IDV Type: FSS

Timeline