DoD's $174M IT Services Contract Awarded to Digicon Corporation Shows Moderate Value and Full Competition

Contract Overview

Contract Amount: $11,123,000 ($11.1M)

Contractor: Digicon Corporation

Awarding Agency: Department of Defense

Start Date: 2005-10-01

End Date: 2009-09-30

Contract Duration: 1,460 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: IT

Official Description: 200604!600003!9700!HQ0422!DEF FINANCE & ACTG SVC, CLEVELAN!GS35F5109H !C!N! !N!HQ042206F6001! !20051001!20060930!174243907!174243907!174243907!N!DIGICON CORPORATION !460 HERNDON PKWY STE 250 !HERNDON !VA!20170!29008!059!51!FORT BELVOIR !FAIRFAX !VIRGINIA !+000002716076!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541512!E! !6! ! ! ! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! ! !B!N! ! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.1 million to DIGICON CORPORATION for work described as: 200604!600003!9700!HQ0422!DEF FINANCE & ACTG SVC, CLEVELAN!GS35F5109H !C!N! !N!HQ042206F6001! !20051001!20060930!174243907!174243907!174243907!N!DIGICON CORPORATION !460 HERNDON PKWY STE 250 !HERNDON !VA!20170!29008!059!51!FORT BELVOIR !FAIR… Key points: 1. The contract's value appears reasonable given the service period and scope, though specific performance metrics are not detailed. 2. Full and open competition was utilized, suggesting a competitive pricing environment for these IT services. 3. The contractor, Digicon Corporation, has a track record with federal contracts, but a deeper dive into past performance is warranted. 4. This contract falls under IT services, a broad category with significant government spending, placing it within a large sector. 5. The contract duration of four years provides stability for service delivery but also necessitates ongoing performance monitoring. 6. No specific small business set-aside was noted, indicating potential for larger prime contractors to dominate.

Value Assessment

Rating: good

The contract value of approximately $174 million over four years averages to about $43.5 million annually. Benchmarking this against similar IT services contracts within the Department of Defense requires detailed analysis of the specific services rendered. However, the pricing appears to be within a plausible range for comprehensive IT support, especially considering the full and open competition which typically drives more favorable pricing. Without granular data on service components and performance, a definitive value-for-money assessment is challenging, but the competitive nature suggests a reasonable outcome.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of multiple bidders in such a scenario generally leads to a more robust price discovery process and potentially lower costs for the government. While the exact number of bidders is not specified in the provided data, the 'full and open' designation is a positive indicator of a competitive marketplace for these IT services.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is designed to secure the best possible pricing and service quality for government IT needs.

Public Impact

The Department of Defense, specifically the Defense Finance and Accounting Service, benefits from enhanced IT support services. The contract supports critical IT infrastructure and operations necessary for defense financial management. The geographic impact is primarily within the United States, supporting federal operations. The contract likely supports a workforce of IT professionals, contributing to employment in the technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to fully assess the contractor's effectiveness and value.
The contract's significant value warrants close monitoring to ensure continued cost-effectiveness and adherence to scope.
The broad nature of 'Other Computer Related Services' could lead to scope creep if not managed diligently.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The contractor, Digicon Corporation, has prior federal contracting experience.
The contract provides a stable, multi-year period for essential IT services to a key defense agency.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under 'Other Computer Related Services.' The IT services market for the federal government is substantial, with agencies consistently investing in technology to support operations, cybersecurity, and data management. This contract represents a portion of the broader government spending on IT, which includes software, hardware, and professional services. Comparable spending benchmarks would typically be found within IT services categories for large federal agencies, often in the tens to hundreds of millions of dollars annually.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business, Digicon Corporation. While there's no explicit mention of subcontracting plans for small businesses, it is common practice for large federal contracts to include provisions for small business participation. The absence of a small business set-aside means that opportunities for small businesses would likely arise through subcontracting rather than direct prime contracting on this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency, the Department of Defense, and specifically the Defense Finance and Accounting Service (DFAS). Mechanisms likely include regular performance reviews, contract management personnel, and potentially oversight from the Government Accountability Office (GAO) or the DoD Inspector General (IG) if issues arise. Transparency is generally facilitated through contract databases like FPDS, where award details are recorded. The effectiveness of oversight depends on the diligence of the agency's contract administration team.

Related Government Programs

IT Professional Services
Defense Information Technology Services
Computer Systems Design Services
Federal IT Procurement
Defense Agency Support Services

Risk Flags

Potential for technological obsolescence over the contract's four-year term.
Risk of scope creep if requirements are not clearly defined and managed.
Dependence on a single contractor for critical IT services necessitates close performance monitoring.
Lack of specific performance metrics in the provided data hinders a full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to DIGICON CORPORATION. 200604!600003!9700!HQ0422!DEF FINANCE & ACTG SVC, CLEVELAN!GS35F5109H !C!N! !N!HQ042206F6001! !20051001!20060930!174243907!174243907!174243907!N!DIGICON CORPORATION !460 HERNDON PKWY STE 250 !HERNDON !VA!20170!29008!059!51!FORT BELVOIR !FAIRFAX !VIRGINIA !+000002716076!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541512!E! !6! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is DIGICON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $11.1 million.

What is the period of performance?

Start: 2005-10-01. End: 2009-09-30.

What is the historical spending pattern of the Department of Defense on IT services similar to this contract?

The Department of Defense is consistently one of the largest federal agencies for IT spending. Historical data shows significant and sustained investment in IT services, encompassing areas like network management, software development, cybersecurity, and data analytics. Annual spending often runs into the tens of billions of dollars across various IT categories. Contracts for professional IT services, similar to this $174 million award over four years, are common and represent a substantial portion of the DoD's overall IT budget. Analyzing past awards within the 'Other Computer Related Services' (NAICS 541519) or similar codes would reveal trends in contract values, durations, and the types of services procured, providing context for the current award's scale and scope.

How does Digicon Corporation's performance on past federal contracts compare to the value and scope of this award?

Digicon Corporation has a history of receiving federal contracts, including awards from the Department of Defense. A thorough review of their past performance would involve examining contract databases for details on previous awards, including their value, duration, scope of work, and any reported performance issues or successes. For this specific $174 million contract, understanding Digicon's track record in delivering IT services of similar complexity and scale is crucial. If past performance indicates consistent delivery, adherence to timelines, and effective cost management, it strengthens the assessment of this current award. Conversely, any history of performance deficiencies, contract disputes, or cost overruns would raise concerns about the value and risk associated with this new contract.

What are the key performance indicators (KPIs) used to measure the success of this IT services contract?

While the provided data does not specify the Key Performance Indicators (KPIs) for this contract, typical metrics for IT services contracts awarded by agencies like the Defense Finance and Accounting Service (DFAS) often include: system uptime and availability, response times for technical support, project completion rates within defined timelines, adherence to security protocols, user satisfaction levels, and successful implementation of new IT solutions. The contract's success would be measured against these or similar KPIs, which are usually detailed in the contract's Performance Work Statement (PWS). Regular performance reviews between DFAS and Digicon Corporation would assess performance against these KPIs to ensure the government is receiving the expected value and service quality.

What is the typical market rate for 'Other Computer Related Services' (NAICS 541519) in the federal sector, and how does this contract's pricing compare?

Determining the precise market rate for 'Other Computer Related Services' (NAICS 541519) in the federal sector is complex due to the wide variety of services encompassed within this code. Rates can vary significantly based on the specific services (e.g., IT consulting, system integration, disaster recovery, data processing), the level of expertise required, geographic location, and contract type. However, federal IT services contracts, especially those awarded under full and open competition, generally aim for competitive pricing. The average annual value of this contract is approximately $43.5 million. Benchmarking requires comparing this to similar-sized contracts for comparable services within the DoD or other federal agencies. Without specific service details, a direct comparison is difficult, but the full and open competition suggests the pricing is likely aligned with market expectations.

What are the potential risks associated with a four-year IT services contract of this magnitude?

A four-year IT services contract of this magnitude ($174 million) carries several potential risks. Firstly, technological obsolescence is a significant concern; IT landscapes evolve rapidly, and a four-year commitment could result in outdated technology or services if not managed proactively. Secondly, contractor performance risk exists; even with a reputable contractor, there's a possibility of service degradation, missed deadlines, or cost overruns over an extended period. Thirdly, scope creep is a common risk in IT contracts, where the requirements may expand beyond the original agreement, leading to increased costs and potential disputes. Finally, vendor lock-in could become an issue, making it difficult or costly to switch providers if performance becomes unsatisfactory. Robust contract management, clear performance metrics, and regular reviews are essential to mitigate these risks.

How does this contract fit into the broader IT modernization efforts within the Department of Defense?

This contract for IT services likely supports the Department of Defense's ongoing efforts towards IT modernization, which aims to enhance operational efficiency, improve cybersecurity, and enable data-driven decision-making across its vast network. Agencies like the Defense Finance and Accounting Service (DFAS) rely heavily on modern IT infrastructure to manage financial data, process payments, and support military operations globally. Contracts of this nature often fund the maintenance, upgrade, and integration of critical systems, potentially including cloud migration, data analytics platforms, or cybersecurity enhancements. By securing these services through a competitive award, the DoD seeks to ensure it has the necessary technological capabilities to maintain its readiness and adapt to evolving threats and operational demands.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Address: 1355 PICCARD DR STE 200, ROCKVILLE, MD, 20850

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5109H

IDV Type: FSS

Timeline