DoD's $17.3M Red Hat contract awarded to August Schell Enterprises, Inc. for IT services

Contract Overview

Contract Amount: $17,336,680 ($17.3M)

Contractor: August Schell Enterprises, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-12-01

End Date: 2025-11-30

Contract Duration: 730 days

Daily Burn Rate: $23.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RED HAT SWM

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to AUGUST SCHELL ENTERPRISES, INC. for work described as: RED HAT SWM Key points: 1. Value for money appears reasonable given the firm-fixed-price structure and 2-year duration. 2. Competition was full and open after exclusion of sources, indicating a competitive process. 3. Risk indicators are moderate, with a fixed-price contract and a single award. 4. Performance context involves IT services for the Defense Information Systems Agency. 5. Sector positioning is within IT services, specifically computer-related services.

Value Assessment

Rating: good

The contract's firm-fixed-price nature suggests a degree of cost certainty. Benchmarking against similar IT service contracts for the DoD indicates that the price per year ($8.67M) is within a reasonable range for specialized services. The total value of $17.3M over two years aligns with typical IT support contracts of this scope.

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,' suggesting that while the competition was open, specific sources may have been excluded prior to the final award. The presence of multiple bidders (3 indicated) is positive, implying a degree of market interest and potential for price negotiation.

Taxpayer Impact: The competitive nature, even with exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source award.

Public Impact

The Department of Defense benefits from essential IT services provided by this contract. This contract supports the Defense Information Systems Agency's operational capabilities. The services delivered are crucial for maintaining and enhancing the DoD's IT infrastructure. Workforce implications are likely within the IT sector, potentially supporting specialized roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited vendor pool due to 'exclusion of sources' clause.
Reliance on a single awardee for critical IT services could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract structure provides cost predictability.
Award to an established entity suggests a degree of reliability.
Competition, even with exclusions, implies some level of market vetting.

Sector Analysis

The IT services sector is a significant area of federal spending, with agencies like the DoD being major consumers. This contract falls under the 'Other Computer Related Services' NAICS code (541519), which encompasses a broad range of IT support, consulting, and integration services. Spending in this category is substantial, reflecting the ongoing need for advanced technological solutions within government.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. The primary contractor, August Schell Enterprises, Inc., is likely a mid-to-large-sized business, and their engagement does not inherently create opportunities for small business subcontracting unless specified in their own business practices.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Information Systems Agency's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, requiring delivery of specified services. Transparency is facilitated by federal contract databases, though specific performance metrics and IG oversight details are not provided in this summary.

Related Government Programs

Defense Information Systems Agency IT Support Contracts
DoD Software and Hardware Procurement
Federal Civilian IT Services
General Services Administration IT Schedule Contracts

Risk Flags

Potential for limited competition due to 'exclusion of sources'.
Contract performance risk associated with a single awardee.
Dependence on contractor's ability to meet IT service level agreements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to AUGUST SCHELL ENTERPRISES, INC.. RED HAT SWM

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 $17.3 million.

What is the period of performance?

Start: 2023-12-01. End: 2025-11-30.

What is the track record of August Schell Enterprises, Inc. with the federal government, particularly in IT services?

August Schell Enterprises, Inc. has a history of federal contracting, primarily within the IT and professional services domains. While specific performance details for this particular contract are not yet available due to its recent award, their past awards suggest experience in delivering services to various government agencies. A deeper analysis would involve reviewing past performance evaluations (if publicly available) and the scope of their previous federal engagements to assess their reliability and expertise in fulfilling complex IT requirements. Their presence in federal contracting indicates they meet certain baseline requirements for government work.

How does the value of this contract compare to similar IT service contracts awarded by the DoD?

The contract value of $17.3 million over two years, averaging approximately $8.65 million annually, is within the expected range for specialized IT services supporting a major defense agency like DISA. Comparable contracts often involve system integration, network support, cybersecurity, and software maintenance. The firm-fixed-price structure provides a benchmark against which other fixed-price contracts of similar scope and duration can be compared. Without specific service details, a precise comparison is difficult, but the overall value appears aligned with market rates for such services within the federal IT landscape.

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

Key risks include potential performance issues from the contractor, reliance on a single awardee for critical services, and the possibility of cost overruns if the firm-fixed-price structure is not adequately managed. Mitigation strategies are embedded in the contract type; the firm-fixed-price nature incentivizes the contractor to control costs. The 'Full and Open Competition After Exclusion of Sources' suggests a vetting process that aims to select a capable vendor. DISA's program management and oversight are crucial for monitoring performance and addressing any deviations from the contract requirements. The 2-year duration also limits long-term exposure to potential performance degradation.

What is the expected effectiveness of the services provided under this contract for the Defense Information Systems Agency?

The effectiveness of the services will depend on the specific IT support being rendered, such as network management, system maintenance, or software development. Given that DISA is a critical agency for military communications and information systems, the services are expected to enhance operational readiness and efficiency. The contract's success will be measured by the contractor's ability to meet performance standards, maintain system uptime, and provide timely support. The firm-fixed-price model aims to ensure that the agency receives the defined services within budget, contributing to predictable IT operational costs.

What are the historical spending patterns for 'Other Computer Related Services' by the Department of Defense?

The Department of Defense consistently represents one of the largest federal spenders in the 'Other Computer Related Services' category (NAICS 541519). Historical data shows a significant and often increasing trend in this area, driven by the need for advanced IT infrastructure, cybersecurity solutions, cloud computing, and specialized software development to maintain military superiority. Annual spending often runs into billions of dollars across various defense agencies. This specific contract, while a fraction of that total, aligns with the broader pattern of substantial investment in IT services by the DoD.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

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: $19,537,190

Exercised Options: $17,336,680

Current Obligation: $17,336,680

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD80B

IDV Type: GWAC

Timeline