DoD's $42.1M Secure Web Services Contract Awarded to Georgia Tech Applied Research Corp. Raises Value Questions

Contract Overview

Contract Amount: $42,158,547 ($42.2M)

Contractor: Georgia Tech Applied Research Corp

Awarding Agency: Department of Defense

Start Date: 2019-04-28

End Date: 2021-10-31

Contract Duration: 917 days

Daily Burn Rate: $46.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SECURE WEB SERVICES

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30318

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $42.2 million to GEORGIA TECH APPLIED RESEARCH CORP for work described as: SECURE WEB SERVICES Key points: 1. The contract's value proposition is unclear given the lack of competitive bidding and the cost-plus-fixed-fee structure. 2. Limited competition for this significant IT services contract may have led to suboptimal pricing. 3. The absence of a clear performance benchmark or comparison makes assessing the contractor's effectiveness challenging. 4. This contract represents a substantial investment in IT services within the Defense sector. 5. The contractor, Georgia Tech Applied Research Corp., is a non-profit research institute, suggesting a focus on specialized services rather than pure commercial IT. 6. The contract duration of 917 days (over 2.5 years) indicates a long-term need for these secure web services.

Value Assessment

Rating: questionable

The value for money on this $42.1 million contract is difficult to assess due to its 'NOT COMPETED' status and Cost Plus Fixed Fee (CPFF) award type. CPFF contracts can sometimes lead to higher costs as the contractor is reimbursed for all allowable costs plus a fixed fee, potentially reducing the incentive for cost control. Without a competitive bidding process, it's impossible to benchmark pricing against market rates or other potential providers. The lack of detailed performance metrics or comparison to similar contracts makes it hard to determine if the government received optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This significantly limits price discovery and potentially increases costs for the government. The rationale for a sole-source award is not provided in the data, but it typically implies a unique capability or urgent need that only one vendor could fulfill. The absence of competition means taxpayers did not benefit from potential cost savings that could arise from a bidding process.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to compete and offer lower bids.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which receives secure web services. These services are critical for enabling secure communication and data exchange within the defense infrastructure. The geographic impact is primarily within the United States, supporting defense operations. The contract likely supports a workforce skilled in IT services, cybersecurity, and web development, potentially within the Georgia Tech ecosystem.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value.
Cost-plus-fixed-fee structure may disincentivize cost efficiency.
Absence of clear performance benchmarks makes it difficult to evaluate contractor effectiveness.
Sole-source award limits transparency and taxpayer benefit from competitive pricing.

Positive Signals

Award to Georgia Tech Applied Research Corp., a reputable research institution, may indicate a focus on specialized, high-quality technical services.
The contract addresses a critical need for secure web services within the Department of Defense.
The long contract duration suggests a stable and ongoing requirement for these services.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer-related services. The IT services market is vast and highly competitive, with numerous companies offering web development, cloud services, and cybersecurity solutions. However, government contracts, especially those for defense agencies, often require specialized security clearances and capabilities. The award to a research corporation like Georgia Tech Applied Research Corp. suggests a focus on advanced or specialized IT solutions rather than standard commercial offerings. Comparable spending benchmarks for similar secure web services within the defense sector would typically vary based on scope, security requirements, and duration.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Georgia Tech Applied Research Corp., a large research institution, suggests that the primary focus was on specialized capabilities rather than fostering small business participation. This means the direct impact on the small business ecosystem is likely minimal, and opportunities for small businesses to participate in this specific contract are limited.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, as a Department of Defense contract, it would typically be subject to oversight by the agency's Inspector General, internal agency review processes, and potentially congressional oversight committees. Transparency is limited due to the sole-source nature of the award and the lack of publicly available performance metrics. Accountability would primarily rest on the contractual terms and the contractor's adherence to them, with potential recourse through contract modifications or termination if performance issues arise.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Department of Defense Cybersecurity Contracts
Federal Secure Web Services Procurement
Research and Development Contracts in IT

Risk Flags

Sole-source award lacks competitive pricing.
CPFF contract type may reduce cost control incentives.
Lack of performance metrics hinders value assessment.
Limited transparency due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.2 million to GEORGIA TECH APPLIED RESEARCH CORP. SECURE WEB SERVICES

Who is the contractor on this award?

The obligated recipient is GEORGIA TECH APPLIED RESEARCH CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.2 million.

What is the period of performance?

Start: 2019-04-28. End: 2021-10-31.

What is the specific nature of the 'Secure Web Services' provided under this contract?

The provided data indicates the contract is for 'SECURE WEB SERVICES' and falls under the North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services.' While the exact nature of these services is not detailed, it likely encompasses the development, maintenance, and operation of web-based applications and platforms that require high levels of security, data protection, and access control. Given the awarding agency is the Department of Defense (DoD) via the Defense Information Systems Agency (DISA), these services are crucial for supporting military operations, intelligence sharing, and administrative functions that handle sensitive or classified information. This could include secure portals, encrypted communication channels, or protected data repositories.

Why was this contract awarded on a sole-source basis instead of being competed?

The provided data states the contract was 'NOT COMPETED,' indicating a sole-source award. The specific justification for this sole-source determination is not included in the data. Typically, sole-source awards are made when only one responsible source is available or capable of providing the required service or supply. Reasons can include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a specific research institution possesses unique expertise essential for a project. Without further documentation from the agency, the precise rationale remains unknown, but it implies that Georgia Tech Applied Research Corp. was deemed the only viable option by the Defense Information Systems Agency for these secure web services at the time of award.

How does the Cost Plus Fixed Fee (CPFF) contract type impact the overall cost and contractor incentive?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor, Georgia Tech Applied Research Corp., is reimbursed for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee. This structure provides the government with flexibility, especially for research and development or services where the scope is not precisely defined at the outset. However, it can reduce the contractor's incentive to control costs, as they are guaranteed to cover their expenses and receive a profit (the fee) regardless of how efficiently they manage resources. The fixed fee is negotiated upfront and does not change with the actual cost, but the 'cost' portion can fluctuate. This makes it harder for the government to achieve the lowest possible price compared to fixed-price contracts, especially when awarded without competition.

What is the track record of Georgia Tech Applied Research Corp. with federal contracts, particularly with the DoD?

Georgia Tech Applied Research Corp. (GTARC) is a non-profit research corporation affiliated with the Georgia Institute of Technology. As such, it has a significant track record of performing research, development, and specialized technical services for various U.S. government agencies, including the Department of Defense. GTARC often engages in complex, cutting-edge projects that require deep scientific and engineering expertise. While specific details of their past DoD contracts are not provided in this data snippet, their affiliation with a major research university suggests a history of successful collaboration with government entities on technically demanding initiatives. Their focus is typically on innovation and problem-solving rather than standard commercial service delivery.

Are there any benchmarks available to compare the cost-effectiveness of this contract?

Direct benchmarks for the cost-effectiveness of this specific $42.1 million 'SECURE WEB SERVICES' contract are not readily available within the provided data. The contract was awarded on a sole-source basis (NOT COMPETED) and utilized a Cost Plus Fixed Fee (CPFF) structure. These factors inherently limit the ability to perform direct cost comparisons with similar competitively awarded contracts. To establish benchmarks, one would typically look at: 1) the number of bids received in similar sole-source or competed contracts for comparable services, 2) the average price per unit of service or per labor hour for similar roles, and 3) the overall cost trends for secure web services within the defense sector. Without this comparative data, assessing whether the government received optimal value is challenging.

What are the potential risks associated with a sole-source, CPFF contract for IT services?

Sole-source contracts, especially those using a Cost Plus Fixed Fee (CPFF) structure for IT services, carry several potential risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a bidding process, as the government doesn't benefit from market pressures driving down costs. Secondly, the CPFF structure can reduce the contractor's incentive to control expenses, as all allowable costs are reimbursed. This increases the risk of cost overruns. For IT services, which can be complex and evolve rapidly, defining 'allowable costs' and ensuring efficient performance can be challenging for the government to oversee. There's also a risk that the unique capability claimed for the sole-source award might not be as exclusive as initially assessed, or that alternative solutions could have been developed through competition. Finally, transparency is reduced, making it harder for oversight bodies and the public to scrutinize the expenditure.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC102819R0039

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 505 10TH ST, ATLANTA, GA, 30318

Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business, Higher Education (Public), Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,158,547

Exercised Options: $42,158,547

Current Obligation: $42,158,547

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline