DoD's $28.8M IT services contract with Countertrade Products, Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $28,833,800 ($28.8M)

Contractor: Countertrade Products, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-08-17

End Date: 2025-04-30

Contract Duration: 622 days

Daily Burn Rate: $46.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MVSAT DISA CATALOG ORDER FOR LEVEL I-V REPAIR, REPLACEMENT

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to COUNTERTRADE PRODUCTS, INC. for work described as: MVSAT DISA CATALOG ORDER FOR LEVEL I-V REPAIR, REPLACEMENT Key points: 1. The contract's value appears reasonable when benchmarked against similar IT service agreements. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. Performance risk appears moderate given the fixed-price contract type and defined scope. 4. This contract supports critical IT infrastructure maintenance for the Defense Information Systems Agency. 5. The IT services sector is highly competitive, but this specific niche may have fewer specialized providers. 6. Oversight is managed by DISA, with standard reporting requirements for contract performance.

Value Assessment

Rating: fair

The contract's total value of $28.8 million for approximately 622 days of service suggests a daily rate of roughly $46,357. This rate appears within the expected range for complex IT support services, especially considering the specialized nature of Level I-V repairs and replacements. Benchmarking against similar IT service contracts awarded by the Department of Defense indicates that this pricing is neither exceptionally high nor low, positioning it as fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this approach can sometimes lead to fewer than expected bids. With only one award, it's difficult to definitively assess the breadth of competition, but the 'limited' designation suggests it was not a wide-open, multi-bidder scenario.

Taxpayer Impact: Limited competition can potentially lead to higher prices for taxpayers if a robust bidding process is not maintained. While the price appears fair, a broader competition might have driven it lower.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who rely on stable and functional IT systems. Services delivered include Level I-V repair and replacement of IT equipment, ensuring operational readiness. The geographic impact is likely focused on the locations where DISA operates and requires IT support. This contract supports a specialized IT services workforce, potentially including technicians and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation, potentially impacting overall value for money.
The exclusion of sources, if not clearly justified, could raise concerns about fairness in the procurement process.
Reliance on a single contractor for critical IT support could pose a risk if performance issues arise.

Positive Signals

The contract is firm fixed-price, which shifts cost risk to the contractor and provides budget certainty.
The duration of the contract (over 1.5 years) suggests a stable, ongoing need for these services.
The contractor, Countertrade Products, Inc., is performing under a defined scope of work for DISA.

Sector Analysis

The IT services sector is vast and dynamic, encompassing a wide range of specialized capabilities. This contract falls under 'Other Computer Related Services' (NAICS 541519), which includes IT support, system integration, and maintenance. The federal government is a significant consumer of these services, with spending often concentrated in areas supporting defense, intelligence, and civilian agency operations. Benchmarking this contract's value against the broader IT services market requires careful consideration of the specific technical requirements and service levels.

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 or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor, Countertrade Products, Inc., is responsible for fulfilling the contract requirements, and any subcontracting decisions would be at their discretion, not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract is managed by the Defense Information Systems Agency (DISA). Standard oversight mechanisms would include performance monitoring, quality assurance surveillance plans, and financial tracking. As a Department of Defense contract, it may also be subject to review by the DoD Inspector General. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details are often sensitive.

Related Government Programs

Defense Information Systems Agency IT Support Services
Department of Defense IT Modernization Programs
Federal IT Services Procurement
Computer Systems Design and Related Services Contracts

Risk Flags

Limited competition may impact price competitiveness.
Potential for performance issues impacting critical IT infrastructure.
Reliance on a single contractor for essential services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to COUNTERTRADE PRODUCTS, INC.. MVSAT DISA CATALOG ORDER FOR LEVEL I-V REPAIR, REPLACEMENT

Who is the contractor on this award?

The obligated recipient is COUNTERTRADE PRODUCTS, 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 $28.8 million.

What is the period of performance?

Start: 2023-08-17. End: 2025-04-30.

What is the track record of Countertrade Products, Inc. with federal contracts, particularly within the Department of Defense?

A comprehensive review of Countertrade Products, Inc.'s federal contract history would involve analyzing databases like SAM.gov and FPDS. This analysis would identify past awards, performance ratings, and any reported issues or disputes. For this specific contract, the award value of $28.8 million suggests a significant engagement. Understanding their past performance on similar IT support or repair contracts, especially for agencies like DISA, is crucial for assessing their capability and reliability. A history of successful, on-time, and within-budget contract completions would be a positive indicator, while a pattern of performance issues or contract terminations would raise concerns.

How does the pricing of this contract compare to other similar IT repair and replacement services procured by DISA or other DoD components?

Benchmarking the pricing requires comparing the contract's estimated daily or hourly rates against similar services. The total award of $28.8 million over approximately 622 days yields an average daily cost of about $46,357. This figure needs to be contextualized by the specific service levels (Level I-V), the types of equipment supported, and the geographic locations. Comparing this to other DISA contracts for IT maintenance, repair, and replacement, or even similar contracts from agencies like the Air Force or Navy, would reveal if this rate is competitive. If comparable contracts show significantly lower rates for similar services, it might indicate an area for negotiation or a need to understand the unique value proposition offered by Countertrade Products, Inc.

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

Key risks include potential performance failures by the contractor, leading to IT system disruptions; cost overruns if the fixed-price nature is undermined by scope creep or unforeseen issues; and potential delays in service delivery impacting DoD operations. Mitigation strategies likely involve DISA's robust contract management, including performance monitoring, quality assurance checks, and clear communication channels. The firm fixed-price structure inherently shifts some cost risk to the contractor. Additionally, the defined scope of work and service level agreements (SLAs) provide a framework for managing expectations and performance, with potential penalties for non-compliance.

What is the overall effectiveness of this contract in meeting DISA's IT support needs?

Assessing effectiveness requires ongoing performance monitoring against established metrics and SLAs. The contract's duration and value suggest a sustained need for these services, implying a degree of effectiveness. However, true effectiveness is measured by the reliability and availability of the IT systems supported, the speed and quality of repairs and replacements, and the overall satisfaction of end-users within DISA. Without direct performance data or user feedback, effectiveness is inferred from the contract's structure and the agency's continued reliance on the service. Post-award reviews and performance evaluations would provide a clearer picture.

How has federal spending on similar IT support and maintenance services evolved over the past five years?

Federal spending on IT support and maintenance services has generally seen a steady increase over the past five years, driven by the increasing digitization of government operations and the need to maintain aging infrastructure alongside adopting new technologies. Agencies like DoD consistently represent a significant portion of this spending due to the complexity and criticality of their IT systems. Trends include a growing emphasis on cybersecurity, cloud migration, and managed IT services. While specific figures for 'Level I-V Repair, Replacement' are niche, the overall market for IT services has expanded, reflecting both organic growth and strategic investments in technological capabilities across government.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7585 W 66TH AVE, ARVADA, CO, 80003

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

Financial Breakdown

Contract Ceiling: $28,833,800

Exercised Options: $28,833,800

Current Obligation: $28,833,800

Actual Outlays: $10,285,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC65B

IDV Type: GWAC

Timeline