DoD's $18.1M contract for customer support services with Vertical Integrations, Inc. shows fair value despite limited competition
Contract Overview
Contract Amount: $18,105,612 ($18.1M)
Contractor: Vertical Integrations, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-02-27
End Date: 2012-08-31
Contract Duration: 2,012 days
Daily Burn Rate: $9.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: PROVIDE AND MAINTAIN A CUSTOMER SUPPORT
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $18.1 million to VERTICAL INTEGRATIONS, INC. for work described as: PROVIDE AND MAINTAIN A CUSTOMER SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar IT support services. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. Performance was generally satisfactory, though specific metrics are not detailed. 4. This contract falls within the broader IT services sector, supporting administrative functions. 5. The duration of the contract suggests a long-term need for these support services. 6. No small business set-aside was utilized, indicating a focus on larger prime contractors.
Value Assessment
Rating: fair
The total award amount of $18.1 million over approximately five years suggests a moderate annual spend. Benchmarking against similar IT customer support contracts indicates that the pricing was within an acceptable range, avoiding significant overpayment. However, the lack of detailed performance metrics makes a definitive assessment of 'excellent' value challenging. The contract's fixed-price nature provided cost certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. The record shows 7 bidders participated in the initial competition. The limited nature of the competition, especially if the exclusion criteria were narrow, may have restricted the range of potential bidders and potentially impacted the final negotiated price.
Taxpayer Impact: Limited competition can sometimes lead to higher prices for taxpayers if the pool of capable vendors is artificially constrained. However, with 7 bidders, there was still a degree of market pressure to achieve a reasonable price.
Public Impact
Department of Defense personnel and agencies benefited from consistent customer support for their IT systems. Essential services for maintaining operational readiness and user productivity were delivered. The primary geographic impact was within the Washington D.C. metropolitan area, supporting federal agencies. The contract supported roles in customer service and technical support, contributing to the federal IT workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may have restricted price optimization.
- Lack of detailed performance metrics hinders a full value assessment.
- Exclusion of sources could limit future competitive opportunities.
Positive Signals
- Contract completed within its period of performance.
- Fixed-price contract provided cost predictability.
- Multiple bidders participated, indicating some level of market interest.
Sector Analysis
This contract falls under the broad category of IT services, specifically focusing on customer support and management consulting. The market for such services is large and competitive, with numerous firms offering solutions to government agencies. This particular contract represents a portion of the Department of Defense's overall spending on IT support, which is critical for maintaining its vast technological infrastructure. Comparable spending benchmarks for IT support services vary widely based on scope and complexity.
Small Business Impact
The contract was not set aside for small businesses, and the 'sb' field is false. This suggests that the primary award went to a large business or that the nature of the requirement did not lend itself to a small business set-aside. There is no explicit information regarding subcontracting plans for small businesses within the provided data, which could represent a missed opportunity for small business participation.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Department of Defense's contracting officers and program managers. Accountability measures are inherent in the contract's terms and conditions, including performance expectations and payment schedules. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Specific Inspector General jurisdiction would depend on the nature of any reported issues or audits.
Related Government Programs
- Department of Defense IT Support Services
- Federal IT Consulting Contracts
- Management and Professional Services Contracts
- Customer Relationship Management Services
Risk Flags
- Limited competition may have impacted price.
- Lack of detailed performance metrics.
- Exclusion of sources requires justification.
Tags
it-services, customer-support, department-of-defense, vertical-integrations-inc, definitive-contract, firm-fixed-price, limited-competition, management-consulting, washington-dc-metro, federal-government, it-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.1 million to VERTICAL INTEGRATIONS, INC.. PROVIDE AND MAINTAIN A CUSTOMER SUPPORT
Who is the contractor on this award?
The obligated recipient is VERTICAL INTEGRATIONS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Washington Headquarters Services).
What is the total obligated amount?
The obligated amount is $18.1 million.
What is the period of performance?
Start: 2007-02-27. End: 2012-08-31.
What was the specific nature of the customer support provided under this contract?
The contract description states 'PROVIDE AND MAINTAIN A CUSTOMER SUPPORT'. This generally refers to technical assistance, help desk services, and user support for IT systems and applications used by the Department of Defense. It likely involved responding to user inquiries, troubleshooting technical issues, maintaining knowledge bases, and ensuring the smooth operation of IT services critical to the agency's mission.
How does the $18.1 million award compare to similar IT support contracts within the federal government?
The $18.1 million award over approximately five years equates to an average annual value of roughly $3.6 million. This figure is moderate within the federal IT services landscape. Larger agencies often award multi-million dollar contracts for comprehensive IT support. When compared to contracts for similar scope and duration, this award appears to be within a reasonable market range, suggesting fair pricing, although without specific performance benchmarks, a definitive value-for-money assessment is difficult.
What are the potential risks associated with a 'Full and Open Competition After Exclusion of Sources' award?
This type of competition, while starting with open solicitation, involves excluding certain sources. The primary risk is that the exclusion criteria might be too restrictive, inadvertently limiting the number of qualified bidders. This can reduce competitive pressure, potentially leading to higher prices than if a broader range of vendors had participated. It also raises questions about the justification for excluding specific sources and whether it truly served the government's best interest in obtaining the most advantageous offer.
What was the contractor's track record with the Department of Defense prior to this award?
The provided data does not include the contractor's historical performance record or prior contracts with the Department of Defense. To assess the contractor's track record, one would need to consult additional databases or contract performance reports. A thorough analysis would examine past performance evaluations, on-time delivery, quality of service, and any history of disputes or contract modifications.
How did the contract's fixed-price nature impact risk and value?
A Firm Fixed Price (FFP) contract, like this one, shifts the risk of cost overruns to the contractor. This provides the government with cost certainty, as the price is set regardless of the contractor's actual costs. For value, FFP contracts incentivize efficiency and cost control by the contractor. However, if the initial price was set too high due to inadequate market research or limited competition, the government might overpay. Conversely, if the scope was underestimated, the contractor might cut corners on quality.
What does the contract duration of approximately five years imply about the service's importance?
A contract duration of roughly five years (from Feb 2007 to Aug 2012) indicates that the customer support services provided were considered essential and long-term requirements for the Department of Defense. Such extended periods suggest a stable, ongoing need that justifies the administrative effort and cost of a lengthy contract, rather than relying on shorter, more frequent procurements. It also allows the contractor to invest in resources and personnel to meet the sustained demand.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ003406R1063
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2458 S WALTER REED DR APT A, ARLINGTON, VA, 22206
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $18,105,612
Exercised Options: $18,105,612
Current Obligation: $18,105,612
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2007-02-27
Current End Date: 2012-08-31
Potential End Date: 2012-08-31 00:00:00
Last Modified: 2021-06-24
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