DoD's $35M Red Hat contract awarded to August Schell Enterprises, Inc. for IT services

Contract Overview

Contract Amount: $35,076,920 ($35.1M)

Contractor: August Schell Enterprises, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2026-10-31

Contract Duration: 1,825 days

Daily Burn Rate: $19.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RED HAT PART NUMBER MCT0696

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $35.1 million to AUGUST SCHELL ENTERPRISES, INC. for work described as: RED HAT PART NUMBER MCT0696 Key points: 1. Contract value of $35,069,196.70 over 5 years. 2. Awarded under full and open competition. 3. Firm Fixed Price contract type suggests predictable costs. 4. Performance period spans from November 2021 to October 2026. 5. Services fall under 'Other Computer Related Services' NAICS code. 6. Contract awarded via Delivery Order. 7. No small business set-aside indicated.

Value Assessment

Rating: good

The contract value of approximately $35 million over five years for IT services appears reasonable given the scope. Benchmarking against similar IT service contracts within the Department of Defense is necessary for a definitive value assessment. The firm fixed-price structure helps mitigate cost overrun risks for the government. However, without specific details on the services rendered and the quantity of Red Hat products or support, a precise value-for-money evaluation is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, specific criteria or prior exclusions may have influenced the pool of bidders. The presence of two bidders suggests a moderate level of competition. A higher number of bidders typically leads to more competitive pricing and a wider range of solutions, but two bidders can still yield a fair market price if the competition is robust.

Taxpayer Impact: The full and open competition, even with a limited number of bidders, aims to ensure that taxpayer funds are used efficiently by leveraging market forces to secure competitive pricing and quality services.

Public Impact

Provides essential IT services and software support to the Department of Defense. Enhances the operational capabilities of defense information systems. Supports the cybersecurity and infrastructure needs of military operations. Likely impacts IT personnel within the Defense Information Systems Agency. Ensures continuity of critical IT services for national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific Red Hat products are heavily customized or integrated.
Reliance on a single vendor for critical IT services could pose a risk if the vendor faces financial or operational difficulties.
The 'after exclusion of sources' clause warrants further investigation into the rationale for any exclusions.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Awarded through a competitive process, suggesting potential for good value.
Long-term contract (5 years) allows for stable IT support and planning.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer-related services and software support. The federal IT services market is substantial, with agencies like the Department of Defense being major consumers. Contracts for specialized software and support, such as those involving Red Hat products, are common as agencies rely on robust operating systems and platforms for their complex operations. Benchmarking would involve comparing this contract's value and duration to other similar software licensing and support agreements within the federal government.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The prime contractor, August Schell Enterprises, Inc., is responsible for its own subcontracting plans if applicable, but this award does not inherently create opportunities for small businesses through a set-aside mechanism.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Information Systems Agency (DISA) program office. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services and products. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

Defense Information Systems Agency IT Services
Department of Defense Software Licensing
Federal IT Infrastructure Support
Red Hat Enterprise Linux Support Contracts

Risk Flags

Potential lack of detailed cost breakdown
Limited competition (2 bidders)
Need for performance metric clarity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to AUGUST SCHELL ENTERPRISES, INC.. RED HAT PART NUMBER MCT0696

Who is the contractor on this award?

The obligated recipient is AUGUST SCHELL ENTERPRISES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $35.1 million.

What is the period of performance?

Start: 2021-11-01. End: 2026-10-31.

What specific Red Hat products or services are covered under this contract, and what is the breakdown of costs?

The provided data identifies the contract as related to 'RED HAT PART NUMBER MCT0696' and falls under NAICS code 541519 (Other Computer Related Services). However, it does not detail the specific Red Hat products (e.g., Red Hat Enterprise Linux subscriptions, Ansible Automation Platform, OpenShift) or services (e.g., technical support, consulting, training) included. The total award amount is $35,069,196.70. Without a detailed breakdown of line items or service descriptions, it is impossible to ascertain the cost allocation per product or service. This level of detail is crucial for understanding the value proposition and ensuring fair pricing for each component of the contract.

How does the pricing of this contract compare to other federal or commercial contracts for similar Red Hat products and support?

Benchmarking the pricing of this $35 million, 5-year contract against comparable federal or commercial agreements for Red Hat products and support is essential for assessing value for money. Given that it's a firm fixed-price contract, the government has a degree of cost certainty. However, without access to specific pricing details for Red Hat Enterprise Linux subscriptions, support levels (e.g., Standard, Premium, Self-Support), or any associated professional services, a direct comparison is difficult. Factors like volume discounts, contract duration, and the specific mix of products/services procured significantly influence pricing. A comprehensive analysis would require comparing unit costs or total contract values for similar quantities and service levels from other government agencies or large commercial enterprises procuring from Red Hat or its resellers.

What is the track record of August Schell Enterprises, Inc. in fulfilling large federal IT contracts, particularly those involving Red Hat products?

August Schell Enterprises, Inc. has a history of receiving federal contracts, as indicated by its presence in contract databases. To assess their track record for this specific type of contract, a review of their past performance on similar IT service and software procurement awards, especially those involving Red Hat technologies, would be necessary. This would involve examining contract completion history, any reported performance issues or successes, and their experience with the Defense Information Systems Agency (DISA) or other Department of Defense components. A positive track record with similar large-scale, complex IT procurements would increase confidence in their ability to successfully execute this $35 million contract.

What are the specific performance metrics and deliverables outlined in this contract to ensure successful service delivery?

The provided data does not specify the performance metrics or deliverables associated with this contract. As a firm fixed-price contract for 'Other Computer Related Services' related to Red Hat products, it is expected to include defined service level agreements (SLAs), delivery schedules for software or support, and potentially reporting requirements. The success of the contract hinges on August Schell Enterprises, Inc. meeting these unstated obligations. Without explicit performance metrics, it is challenging to objectively evaluate the contractor's performance and ensure the government is receiving the full value of the $35 million investment.

How does this contract's spending compare to historical federal spending on Red Hat products and related IT services?

To understand the historical spending context, one would need to analyze federal procurement data for Red Hat products and similar IT services over several fiscal years. This contract, valued at approximately $35 million over five years, represents a significant investment. Comparing this to previous years' spending by the DoD or other agencies on Red Hat solutions can reveal trends in demand, pricing, and the types of services being procured. It would also help determine if this award is an increase, decrease, or consistent with past spending patterns, potentially indicating shifts in technology adoption or strategic priorities within the defense sector.

Industry Classification

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

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1700 ROCKVILLE PIKE STE 405, ROCKVILLE, MD, 20852

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,076,920

Exercised Options: $35,076,920

Current Obligation: $35,076,920

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD80B

IDV Type: GWAC

Timeline