DoD awards $14.4M for Software AG products, raising questions on competition and value
Contract Overview
Contract Amount: $14,436,359 ($14.4M)
Contractor: Countertrade Products, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-12-27
End Date: 2026-12-26
Contract Duration: 729 days
Daily Burn Rate: $19.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SUPPORT AND MAINTENANCE OF SOFTWARE AG BRANDED PRODUCTS.
Place of Performance
Location: ARVADA, JEFFERSON County, COLORADO, 80003
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $14.4 million to COUNTERTRADE PRODUCTS, INC. for work described as: SUPPORT AND MAINTENANCE OF SOFTWARE AG BRANDED PRODUCTS. Key points: 1. Significant contract value for specialized software support. 2. Limited competition raises concerns about price discovery. 3. Potential for higher costs due to sole-source justification. 4. IT services sector, crucial for defense operations.
Value Assessment
Rating: questionable
The contract value of $14.4M for specialized software support appears high without clear benchmarks. Pricing assessment is difficult due to the limited competition and lack of publicly available comparable contract data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition approach. This method may restrict price discovery and potentially lead to less favorable pricing for the government.
Taxpayer Impact: Taxpayer funds are utilized for this specialized software support. The limited competition raises concerns about whether the government is achieving the best possible value for its investment.
Public Impact
Defense agencies rely on specialized software for critical operations. Taxpayers may be overpaying due to restricted competition. Ensuring fair pricing for software maintenance is vital for budget control.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Lack of clear justification for source exclusion
- Potential for inflated pricing
- Reliance on a single vendor for critical software
Positive Signals
- Contract supports essential defense operations
- Clear end date for the contract
Sector Analysis
This contract falls within the IT services sector, specifically focusing on support for branded software products. Spending benchmarks for similar specialized software maintenance contracts are often difficult to ascertain due to proprietary nature and limited public data.
Small Business Impact
The contract data indicates that small businesses were not involved in this award, as the 'sb' field is false. This suggests the contract was awarded to a larger entity, potentially missing opportunities for small business participation.
Oversight & Accountability
Oversight is crucial to ensure the necessity of the software and the reasonableness of the pricing, especially given the limited competition. The Defense Counterintelligence and Security Agency should provide detailed justifications for the procurement strategy.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Counterintelligence and Security Agency Programs
Risk Flags
- Limited competition
- Potential for price gouging
- Lack of transparency in pricing
- Vendor lock-in risk
- Questionable value for taxpayer money
Tags
other-computer-related-services, department-of-defense, co, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.4 million to COUNTERTRADE PRODUCTS, INC.. SUPPORT AND MAINTENANCE OF SOFTWARE AG BRANDED PRODUCTS.
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 Counterintelligence and Security Agency).
What is the total obligated amount?
The obligated amount is $14.4 million.
What is the period of performance?
Start: 2024-12-27. End: 2026-12-26.
What is the specific justification for excluding other sources for Software AG products, and how does it ensure fair pricing?
The justification for excluding other sources is critical. If the exclusion is based on proprietary technology or unique support requirements, it necessitates careful review to ensure it's not artificially limiting competition. Agencies must demonstrate that this approach is the only viable option and that robust price negotiation techniques were employed to mitigate potential overpricing.
How does the government ensure the value received for $14.4M in software support aligns with market rates, given the limited competition?
Ensuring value requires rigorous price analysis, including benchmarking against any available internal or external data, even if imperfect. The agency should have explored alternative solutions or phased approaches to foster competition. Without transparent pricing and competitive pressure, it's challenging to confirm value for money.
What are the risks associated with a sole-source or limited-source award for critical software maintenance, and how are they mitigated?
The primary risks include higher costs, potential vendor lock-in, and reduced innovation. Mitigation strategies involve strong contract management, regular performance reviews, and actively seeking opportunities to introduce competition in future procurements or through alternative solutions. Continuous market research is also key.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
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: $14,436,359
Exercised Options: $14,436,359
Current Obligation: $14,436,359
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC65B
IDV Type: GWAC
Timeline
Start Date: 2024-12-27
Current End Date: 2026-12-26
Potential End Date: 2026-12-26 00:00:00
Last Modified: 2025-12-05
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