DoD's $40M application integration contract awarded to Dynanet Corporation shows strong competition and value

Contract Overview

Contract Amount: $40,062,914 ($40.1M)

Contractor: Dynanet Corporation

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2024-11-12

Contract Duration: 1,503 days

Daily Burn Rate: $26.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: APPLICATION INTEGRATION. THIS CONTRACT HAS BEEN TRANSFERRED FROM OPM TO DCSA IAW THE 2018 NDAA AND EO 13869.

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.1 million to DYNANET CORPORATION for work described as: APPLICATION INTEGRATION. THIS CONTRACT HAS BEEN TRANSFERRED FROM OPM TO DCSA IAW THE 2018 NDAA AND EO 13869. Key points: 1. Contract value of $40M over 4 years indicates significant investment in application integration. 2. Full and open competition suggests a healthy market with multiple capable vendors. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. Performance period of over 4 years allows for sustained support and development. 5. This contract supports critical national security functions within the Defense Counterintelligence and Security Agency. 6. The transfer from OPM to DCSA highlights evolving agency needs and consolidation of services.

Value Assessment

Rating: good

The contract's total value of approximately $40 million over four years for application integration services appears reasonable given the scope and duration. Benchmarking against similar large-scale IT integration contracts within the Department of Defense suggests this pricing is competitive. The firm-fixed-price structure further enhances value by shifting cost risk to the contractor, ensuring predictable expenditures for the agency.

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 bids. The presence of two bids suggests a competitive environment, though more bidders could potentially drive prices lower. The agency's decision to use full and open competition is a positive sign for achieving best value and leveraging market capabilities.

Taxpayer Impact: Full and open competition generally leads to better price discovery and ensures taxpayers benefit from a wider pool of talent and potentially lower costs due to market pressures.

Public Impact

The primary beneficiaries are the Defense Counterintelligence and Security Agency (DCSA) and its mission to provide security services to the DoD and other federal agencies. Services delivered include critical application integration, ensuring seamless data flow and operational efficiency. The geographic impact is primarily within the United States, supporting federal agencies nationwide. Workforce implications include the potential for skilled IT professionals to be employed by Dynanet Corporation and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if integration solutions are proprietary.
Dependence on a single contractor for critical application infrastructure.
Risk of scope creep if requirements are not clearly defined and managed.

Positive Signals

Firm-fixed-price contract type limits cost uncertainty.
Full and open competition suggests a robust market and potential for innovation.
Long-term contract duration allows for stable support and development.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on custom computer programming and application integration. The market for such services is substantial, driven by the continuous need for government agencies to modernize legacy systems and integrate disparate applications for improved efficiency and security. Comparable spending benchmarks in this area often involve multi-million dollar awards for large-scale integration projects supporting critical national infrastructure.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, Dynanet Corporation. Further analysis would be needed to determine if Dynanet has a robust small business subcontracting plan in place to ensure opportunities for smaller firms within the IT services ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Counterintelligence and Security Agency (DCSA) contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD IT Modernization Programs
DCSA Security Systems Integration
Federal Application Development Services
Custom Computer Programming Services

Risk Flags

Potential for vendor lock-in
Complexity of integrating disparate systems
Dependence on contractor performance for critical functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.1 million to DYNANET CORPORATION. APPLICATION INTEGRATION. THIS CONTRACT HAS BEEN TRANSFERRED FROM OPM TO DCSA IAW THE 2018 NDAA AND EO 13869.

Who is the contractor on this award?

The obligated recipient is DYNANET CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Counterintelligence and Security Agency).

What is the total obligated amount?

The obligated amount is $40.1 million.

What is the period of performance?

Start: 2020-10-01. End: 2024-11-12.

What is Dynanet Corporation's track record with similar large-scale IT integration contracts within the federal government?

Dynanet Corporation has a history of securing and performing on federal IT contracts, including those involving application integration and custom programming. While specific details on past performance for contracts of this exact scale and complexity require deeper investigation into federal procurement databases and past performance reviews, their presence as a prime contractor on a $40M Department of Defense award suggests a demonstrated capability. It is important to review their performance on previous contracts, including any awards, penalties, or contract modifications, to fully assess their reliability and expertise in delivering complex IT solutions. Their ability to win this competitive bid indicates a level of confidence from the agency in their past performance and technical approach.

How does the $40M contract value compare to historical spending on application integration by DCSA or its predecessor agencies?

The $40 million contract value represents a significant investment in application integration for the Defense Counterintelligence and Security Agency (DCSA). To provide a precise comparison, historical spending data for DCSA and its predecessor agencies (like OPM's security functions before the transfer) on similar application integration services would be needed. However, given the critical nature of DCSA's mission and the trend towards IT modernization across federal agencies, this level of spending is not unusual for a multi-year contract supporting core operational systems. It suggests a sustained effort to enhance or maintain the agency's technological infrastructure, potentially consolidating or upgrading systems previously managed by OPM.

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

Key risks for this application integration contract include potential technical challenges in integrating diverse systems, the possibility of scope creep if requirements are not tightly managed, and vendor lock-in if proprietary solutions are heavily utilized. Mitigation strategies are likely embedded within the contract's structure. The firm-fixed-price (FFP) nature shifts significant cost risk to Dynanet Corporation, incentivizing efficient project management. The full and open competition process aims to select a vendor with proven capabilities, reducing technical risk. Clear performance work statements, regular progress reviews, and defined change control processes are crucial for managing scope and ensuring successful integration.

How effective is the full and open competition approach in ensuring optimal value for taxpayers on this contract?

The full and open competition approach is generally considered highly effective in ensuring optimal value for taxpayers on contracts like this. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages innovation. The fact that two bids were received indicates a degree of market interest and competition. While more bidders could potentially lead to even greater price reductions, the current level of competition suggests that DCSA received proposals from capable vendors, allowing for a robust evaluation process to select the best technical solution at a competitive price. This approach minimizes the risk of overpaying and maximizes the likelihood of obtaining high-quality services.

What is the strategic importance of this contract for DCSA's overall mission and modernization efforts?

This contract is strategically vital for DCSA's mission, particularly concerning the integration of applications that underpin its security clearance, background investigation, and identity management functions. As the contract was transferred from OPM following the 2018 NDAA and EO 13869, it signifies a consolidation of critical security-related IT infrastructure under DCSA. Successful application integration ensures seamless data flow between various security databases and systems, enhancing DCSA's ability to process information efficiently and accurately. This is crucial for national security, enabling timely vetting of personnel. The contract supports DCSA's broader modernization efforts by ensuring its IT systems are robust, interoperable, and capable of meeting evolving security challenges.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8182 LARK BROWN ROAD, ELKRIDGE, MD, 21075

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,537,812

Exercised Options: $40,062,914

Current Obligation: $40,062,914

Actual Outlays: $20,161,359

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F003CA

IDV Type: FSS

Timeline