DHS Coast Guard's $100M IT contract to Digital Management LLC shows fair competition and potential value concerns

Contract Overview

Contract Amount: $100,309,447 ($100.3M)

Contractor: Digital Management LLC

Awarding Agency: Department of Homeland Security

Start Date: 2010-05-13

End Date: 2012-12-31

Contract Duration: 963 days

Daily Burn Rate: $104.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: APLES IDIQ TASK ORDER 0001.

Place of Performance

Location: KEARNEYSVILLE, JEFFERSON County, WEST VIRGINIA, 25430

State: West Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $100.3 million to DIGITAL MANAGEMENT LLC for work described as: APLES IDIQ TASK ORDER 0001. Key points: 1. The contract was awarded under full and open competition, indicating a competitive bidding process. 2. The fixed-fee structure suggests a defined profit margin, but cost control remains a key performance indicator. 3. The contract duration of over 3 years (963 days) allows for substantial project development and execution. 4. The specific NAICS code (541511) points to custom computer programming, a critical IT service area. 5. The contract's value of over $100 million positions it as a significant investment in IT modernization. 6. The award to Digital Management LLC, a known IT services provider, suggests a degree of contractor capability assessment.

Value Assessment

Rating: fair

Benchmarking the value of this specific task order against similar custom computer programming services is challenging without more granular data on the scope of work. However, the fixed-fee structure provides some predictability in contractor profit. The total award value of over $100 million suggests a substantial project, and its effectiveness will depend on the successful delivery of the custom programming services. Further analysis would require understanding the specific deliverables and comparing them to industry standards for similar IT projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was generally open, certain sources may have been excluded for specific reasons. The presence of 7 bidders indicates a healthy level of competition for this task order. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down costs and ensured the government received competitive proposals for the custom computer programming services.

Public Impact

The U.S. Coast Guard benefits from enhanced custom computer programming services, likely improving operational efficiency and technological capabilities. The contract supports the development and implementation of specialized IT solutions tailored to the Coast Guard's unique mission requirements. The geographic impact is primarily within the operational areas of the U.S. Coast Guard, potentially nationwide. The contract supports IT professionals and programmers, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in custom programming projects if not managed tightly.
Dependence on Digital Management LLC for critical IT services could pose a risk if performance falters.
Ensuring the custom solutions remain adaptable to future technological advancements will be crucial.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The fixed-fee structure provides cost certainty for the government.
The contract duration allows for comprehensive development and integration of IT solutions.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on custom computer programming services. The IT services market is vast and highly competitive, with significant government spending allocated to software development, system integration, and IT support. Contracts like this are essential for agencies to maintain and modernize their technological infrastructure to meet evolving operational demands. Comparable spending benchmarks would typically involve analyzing other large-scale custom software development contracts within federal agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. As a large IDIQ task order, it is possible that subcontracting opportunities may exist, but this would depend on the specific terms negotiated and the prime contractor's strategy. Without explicit set-aside provisions, the primary focus is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Coast Guard contracting officers and program managers. Accountability measures would be tied to the contract's performance metrics and deliverables. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General's office for the Department of Homeland Security may have jurisdiction for audits and investigations if any issues arise.

Related Government Programs

Department of Homeland Security IT Modernization Programs
U.S. Coast Guard IT Infrastructure Support
Custom Software Development Services
Federal IT Services Contracts

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Complexity of custom programming projects can lead to schedule delays.
Ensuring adequate cybersecurity measures for developed software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $100.3 million to DIGITAL MANAGEMENT LLC. APLES IDIQ TASK ORDER 0001.

Who is the contractor on this award?

The obligated recipient is DIGITAL MANAGEMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $100.3 million.

What is the period of performance?

Start: 2010-05-13. End: 2012-12-31.

What was the specific scope of work for this custom computer programming services task order?

The provided data indicates the NAICS code is 541511, which covers Custom Computer Programming Services. However, the specific scope of work for this particular task order (0001) under the APLES IDIQ is not detailed in the provided data. Typically, custom programming services involve designing, developing, and implementing software solutions tailored to an organization's unique needs. This could range from developing new applications, modifying existing software, integrating different systems, or providing specialized IT consulting related to software development. Without further documentation, the precise nature of the services rendered remains unspecified.

How does the $100.3 million award compare to typical spending on similar IT services by the U.S. Coast Guard?

Comparing this $100.3 million task order to typical U.S. Coast Guard IT spending requires access to historical spending data and an understanding of the Coast Guard's IT modernization priorities. Large task orders like this often represent significant investments in critical systems or infrastructure upgrades. Without specific benchmarks for Coast Guard IT procurements of custom programming services, it's difficult to definitively state if this amount is high or low. However, given the scale, it suggests a substantial project critical to the agency's operations or strategic goals. Further analysis would involve examining the Coast Guard's overall IT budget and the proportion allocated to similar large-scale development efforts.

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

The provided data does not specify the key performance indicators (KPIs) for this contract. For custom computer programming services, typical KPIs often include adherence to project timelines, meeting functional and technical requirements, software quality (e.g., bug rates, performance metrics), user satisfaction, and successful integration with existing systems. As this is a Cost Plus Fixed Fee (CPFF) contract, the contractor's ability to deliver the agreed-upon scope within the fixed fee while meeting quality standards would be paramount. The contracting officer's representative (COR) would likely monitor progress against defined milestones and deliverables.

What is the track record of Digital Management LLC in delivering similar custom programming services to federal agencies?

Digital Management LLC (DMI) is a known IT solutions provider that has historically secured numerous contracts with various federal agencies, including the Department of Homeland Security. Their track record generally includes a range of IT services, such as software development, cloud solutions, cybersecurity, and IT infrastructure management. To assess their specific performance on this particular task order, one would need to review past performance evaluations and contract close-out reports associated with this award. General contract databases may provide an overview of their awarded contracts, but detailed performance specifics require deeper investigation into agency-specific records.

Were there any significant risks identified during the procurement or execution of this contract?

The provided data does not explicitly list identified risks for this contract. However, common risks associated with large custom programming contracts include technical challenges in development, integration issues with legacy systems, potential for scope creep, contractor performance issues, and cybersecurity vulnerabilities. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation might suggest that certain potential risks were mitigated by excluding specific vendors or that specific requirements led to exclusions. A thorough risk assessment would typically be documented within the contract file and managed throughout the contract lifecycle.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type influence the government's financial exposure and the contractor's incentives?

The Cost Plus Fixed Fee (CPFF) contract type means the government agrees to pay the contractor's actual allowable costs plus a predetermined fixed fee representing profit. This structure provides the government with cost certainty regarding the contractor's profit margin, as the fee is fixed regardless of the final cost. However, it does not cap the total cost of the contract, meaning the government bears the risk of cost overruns if the project's actual costs exceed estimates. The contractor is incentivized to control costs to maximize their profit margin, as any savings below the estimated cost do not increase their fee, but significant overruns could lead to scrutiny. This type of contract is often used when the scope of work is not precisely defined at the outset, allowing for flexibility.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 7

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6701 DEMOCRACY BLVD STE 500, BETHESDA, MD, 20817

Business Categories: 8(a) Program Participant, Category Business, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $100,309,447

Exercised Options: $100,309,447

Current Obligation: $100,309,447

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSCGG310DPWV500

IDV Type: IDC

Timeline