DOD awards $12.1M Cloud Infrastructure as Code contract to Alaska Northstar Resources LLC on a sole-source basis

Contract Overview

Contract Amount: $12,113,849 ($12.1M)

Contractor: Alaska Northstar Resources LLC

Awarding Agency: Department of Defense

Start Date: 2021-08-19

End Date: 2026-09-29

Contract Duration: 1,867 days

Daily Burn Rate: $6.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DEPARTMENT OF DEFENSE (DOD) CLOUD INFRASTRUCTURE AS CODE (IAC)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.1 million to ALASKA NORTHSTAR RESOURCES LLC for work described as: DEPARTMENT OF DEFENSE (DOD) CLOUD INFRASTRUCTURE AS CODE (IAC) Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price competition. 2. The contract duration of over 5 years suggests a long-term reliance on the selected vendor. 3. The fixed-price contract type aims to control costs, but the lack of competition may inflate the unit price. 4. Performance is in Virginia, despite the contractor's name suggesting an Alaskan focus. 5. The contract falls under custom computer programming services, a common area for IT spending. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value for this specific contract is challenging due to the lack of publicly available comparable sole-source awards for Cloud Infrastructure as Code services within the Department of Defense. The fixed-price nature of the contract provides some cost certainty, but the absence of competitive bidding means there's no market-driven validation of the pricing. Without a competitive process, it's difficult to ascertain if the government secured the best possible value or if the pricing reflects a premium due to limited vendor options.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning that only one vendor, Alaska Northstar Resources LLC, was solicited. The specific reasons for this sole-source determination are not detailed in the provided data, but typically such awards occur when only one vendor possesses the necessary specialized capabilities, or in urgent situations. The lack of competition means that taxpayers did not benefit from the price discovery mechanisms inherent in a multi-bidder scenario.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to negotiate the most favorable terms and pricing.

Public Impact

The Department of Defense benefits from the development and implementation of Cloud Infrastructure as Code, likely enhancing its cloud computing capabilities. Services delivered include custom computer programming, crucial for modernizing IT infrastructure. The geographic impact is primarily within Virginia, where the performance is located. Workforce implications may include specialized IT roles for the contractor's personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Long contract duration (over 5 years) may lock the government into a specific vendor without ongoing market evaluation.
Lack of small business participation could be a missed opportunity for economic inclusion.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Focus on Cloud Infrastructure as Code aligns with modernizing defense IT systems.
Contract awarded to a specific entity suggests a perceived need for their unique capabilities.

Sector Analysis

The contract falls within the Information Technology sector, specifically Custom Computer Programming Services. The Department of Defense is a significant investor in cloud computing and related infrastructure services to enhance operational efficiency and security. Spending in this area is driven by the need to modernize legacy systems, adopt agile development practices, and leverage scalable cloud solutions. Comparable spending benchmarks are difficult to establish precisely due to the sole-source nature of this award, but the overall IT services market for the federal government is substantial.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this significant IT contract are limited. The absence of a small business focus in this award could impact the broader small business ecosystem within the federal contracting space, particularly for those specializing in cloud infrastructure services.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) from the Defense Information Systems Agency (DISA) and potentially the agency's Inspector General. Accountability measures are tied to the performance requirements outlined in the contract. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competitively bid contracts.

Related Government Programs

DOD Cloud Computing Strategy
Defense Information Technology Contracting
Custom Software Development Services
Infrastructure as Code Implementation

Risk Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to ALASKA NORTHSTAR RESOURCES LLC. DEPARTMENT OF DEFENSE (DOD) CLOUD INFRASTRUCTURE AS CODE (IAC)

Who is the contractor on this award?

The obligated recipient is ALASKA NORTHSTAR RESOURCES 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 $12.1 million.

What is the period of performance?

Start: 2021-08-19. End: 2026-09-29.

What specific capabilities does Alaska Northstar Resources LLC possess that justified a sole-source award for Cloud Infrastructure as Code services?

The provided data does not specify the exact justification for the sole-source award to Alaska Northstar Resources LLC. Typically, sole-source contracts are awarded when a particular vendor is the only one capable of meeting the government's requirements due to unique capabilities, specialized knowledge, or proprietary technology. For Cloud Infrastructure as Code (IAC), this could involve specific expertise with certain cloud platforms (e.g., AWS, Azure, GCP), unique security clearances, or established integration with existing DOD systems that no other vendor can replicate. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), it is impossible to definitively state the reasons behind this decision. This lack of transparency is a common concern with sole-source awards.

How does the $12.1 million contract value compare to typical spending on Cloud Infrastructure as Code services within the DOD?

Directly comparing this $12.1 million contract to typical DOD spending on Cloud Infrastructure as Code (IAC) is challenging without more granular data on similar sole-source or competitively awarded IAC contracts. The DOD's overall IT budget is vast, and spending on cloud services and infrastructure management is a significant component. However, a contract of this value, spanning over five years (approximately $2.4 million annually), suggests a substantial project. If this were a competitive bid, the price would be benchmarked against multiple proposals. As a sole-source award, its value is harder to assess against market rates, but it represents a considerable investment in a critical IT capability for the department.

What are the primary risks associated with awarding a long-term (over 5 years) sole-source contract for critical IT infrastructure?

The primary risks associated with a long-term sole-source contract for critical IT infrastructure like Cloud Infrastructure as Code (IAC) include potential cost overruns, vendor lock-in, and reduced innovation. Without competition, the vendor may have less incentive to offer the most competitive pricing over the contract's life, potentially leading to higher costs for the government. Vendor lock-in occurs when the government becomes heavily reliant on a single provider's proprietary solutions or expertise, making it difficult and costly to switch providers later. Furthermore, the lack of competitive pressure can stifle innovation, as the incumbent vendor may not feel compelled to introduce cutting-edge solutions or efficiencies that could be brought by new market entrants.

What performance metrics or oversight mechanisms are likely in place to ensure Alaska Northstar Resources LLC delivers effectively on this contract?

While specific performance metrics are not detailed in the provided data, standard oversight mechanisms for a contract of this nature would include a Contracting Officer's Representative (COR) responsible for monitoring performance, ensuring compliance with contract terms, and verifying deliverables. The contract likely specifies key performance indicators (KPIs) related to the successful implementation, maintenance, and security of the Cloud Infrastructure as Code. Regular progress reports, technical reviews, and potentially site visits would be part of the oversight process. The firm fixed-price nature of the contract also incentivizes the contractor to meet performance standards to ensure profitability, though the lack of competition might reduce the urgency.

How does this contract align with the Department of Defense's broader cloud computing strategy and digital modernization efforts?

This contract for Cloud Infrastructure as Code (IAC) directly aligns with the Department of Defense's broader cloud computing strategy and digital modernization efforts. IAC is a foundational element for adopting and managing cloud environments efficiently, securely, and at scale. By enabling the automation of infrastructure provisioning and management, it supports the DOD's goals of increasing agility, improving cybersecurity posture, and reducing operational costs. Implementing IAC allows the DOD to treat infrastructure as code, facilitating version control, testing, and rapid deployment of cloud resources, which is crucial for maintaining a technological edge and supporting modern warfighting capabilities.

What is the potential impact of this sole-source award on the competitive landscape for Cloud Infrastructure as Code services within the federal IT market?

A sole-source award, especially for a significant contract like this $12.1 million DOD Cloud Infrastructure as Code (IAC) agreement, can have a mixed impact on the competitive landscape. On one hand, it removes a potential opportunity for other companies to compete and demonstrate their capabilities, potentially limiting market entry for newer or smaller firms. On the other hand, it might signal a specific demand or technological requirement within the DOD that could encourage other companies to develop similar specialized expertise to compete for future, potentially competitive, awards. However, the primary effect is a missed opportunity for broader market price discovery and vendor diversification within this specific contract's scope.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC102821R0041

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 315 LINCOLN ST STE 300, SITKA, AK, 99835

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,528,277

Exercised Options: $13,528,277

Current Obligation: $12,113,849

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline