DHS Coast Guard awards $115M IT contract to Digital Management LLC for custom programming services

Contract Overview

Contract Amount: $115,397,229 ($115.4M)

Contractor: Digital Management LLC

Awarding Agency: Department of Homeland Security

Start Date: 2013-01-01

End Date: 2015-04-30

Contract Duration: 849 days

Daily Burn Rate: $135.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: APLES BASE TASK ORDER - BASE PERIOD. POP: 1/1/13-12/31/13 ITAR: AAP: SPEND PLAN: SEE SPEND PLAN NUMBERS INDIVIDUAL ITEMS LISTED BELOW. IGF::CL,CT::IGF

Place of Performance

Location: KEARNEYSVILLE, BERKELEY County, WEST VIRGINIA, 25430

State: West Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $115.4 million to DIGITAL MANAGEMENT LLC for work described as: APLES BASE TASK ORDER - BASE PERIOD. POP: 1/1/13-12/31/13 ITAR: AAP: SPEND PLAN: SEE SPEND PLAN NUMBERS INDIVIDUAL ITEMS LISTED BELOW. IGF::CL,CT::IGF Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed carefully. 3. The duration of 849 days indicates a significant, long-term need for these IT services. 4. The contract was awarded to Digital Management LLC, a contractor with a substantial federal presence. 5. The services fall under Custom Computer Programming, a critical area for agency operations. 6. The contract's value of over $115 million warrants close scrutiny of performance and cost efficiency.

Value Assessment

Rating: fair

The contract value of $115,397,228.91 for custom computer programming services over approximately 2.3 years appears substantial. Benchmarking this against similar IT service contracts for federal agencies is crucial. Without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. However, the Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if not rigorously managed and monitored by the agency.

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'. This indicates that while the competition was intended to be broad, specific sources may have been excluded based on certain criteria prior to the main bidding process. The number of bidders is not specified, but the 'full and open' designation suggests multiple entities had the opportunity to compete, which generally promotes competitive pricing.

Taxpayer Impact: A competitive award process, even with exclusions, is generally favorable for taxpayers as it aims to secure the best value through market forces. It helps prevent sole-source awards which often come at a premium.

Public Impact

The U.S. Coast Guard benefits from enhanced custom computer programming services, likely supporting its operational and administrative functions. This contract supports the development and maintenance of critical IT systems for a key Department of Homeland Security agency. The geographic impact is primarily within West Virginia (ST: WV), where the contractor's presence is noted. The contract likely supports a workforce of IT professionals, including programmers, developers, and project managers, contributing to the IT sector employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
The 'after exclusion of sources' clause in the competition type warrants further investigation into the rationale for exclusions.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess program effectiveness.
The significant contract value necessitates robust oversight to ensure taxpayer funds are used efficiently.

Positive Signals

Awarded through a full and open competition, indicating a degree of market engagement.
The contract addresses a clear need for custom computer programming services within the Coast Guard.
The contractor, Digital Management LLC, is an established entity in the federal IT contracting space.

Sector Analysis

The IT services sector is a significant component of federal spending, with custom computer programming being a vital sub-segment. Agencies rely on these services for developing, maintaining, and modernizing their complex IT infrastructures. Federal spending in this area often benchmarks against private sector IT consulting and development rates, though government contracts can have unique pricing structures and oversight requirements. This contract fits within the broader trend of agencies outsourcing specialized IT development to private firms.

Small Business Impact

The provided data indicates that small business participation (SB: false) and set-asides (SS: false) were not applicable to this specific contract award. This means the contract was not specifically targeted towards small businesses, and there is no explicit indication of subcontracting opportunities for small businesses within this award. The focus was on full and open competition among potentially larger, established firms.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal review processes and potentially the U.S. Coast Guard's program management. The Inspector General's office for DHS would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is enhanced by the public nature of contract awards, but detailed performance reports and cost breakdowns are often internal unless specifically released.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee contract type requires diligent cost oversight.
Competition included exclusions, warranting understanding of the rationale.
Long contract duration increases risk of scope creep and obsolescence.
Significant contract value necessitates strong performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $115.4 million to DIGITAL MANAGEMENT LLC. APLES BASE TASK ORDER - BASE PERIOD. POP: 1/1/13-12/31/13 ITAR: AAP: SPEND PLAN: SEE SPEND PLAN NUMBERS INDIVIDUAL ITEMS LISTED BELOW. IGF::CL,CT::IGF

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 $115.4 million.

What is the period of performance?

Start: 2013-01-01. End: 2015-04-30.

What is the specific scope of work for these custom computer programming services?

The provided data does not detail the specific scope of work for the 'APLES BASE TASK ORDER - BASE PERIOD'. However, given the NAICS code 541511 (Custom Computer Programming Services), it likely involves the design, development, modification, testing, and support of software and IT systems tailored to the unique needs of the U.S. Coast Guard. This could range from developing new applications to enhancing existing systems, integrating disparate software, or providing specialized programming expertise for mission-critical operations. Further details would typically be found in the contract's Statement of Work (SOW).

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar IT services?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set regardless of costs, and Cost Plus Incentive Fee (CPIF) contracts, which adjust the fee based on performance against targets. CPFF is often used when the scope of work is not precisely defined or is expected to evolve, offering flexibility. However, it places a greater burden on the government to monitor costs diligently to prevent overspending, as the contractor has less incentive to control expenses compared to a fixed-price arrangement.

What is the track record of Digital Management LLC in delivering similar IT services to the federal government?

Digital Management LLC (DMI) has a significant history of contracting with the federal government, including various agencies within the Department of Homeland Security. DMI's portfolio often includes IT modernization, cybersecurity, cloud services, and custom software development. While specific performance details for every contract are not publicly itemized, DMI is generally recognized as an established IT solutions provider. A deeper dive into contract databases like FPDS or SAM.gov would reveal specific past performance ratings, past issues, and the types of services they have successfully delivered across different federal entities.

What are the potential risks associated with a contract of this size and duration?

Contracts of this magnitude ($115M+) and duration (849 days) carry inherent risks. These include potential cost overruns, especially with a CPFF structure, schedule delays due to unforeseen technical challenges or scope creep, contractor performance issues, and the risk of technology obsolescence over the contract's life. There's also the risk of vendor lock-in if the developed systems become highly proprietary. Effective risk mitigation requires robust government oversight, clear communication channels, proactive issue resolution, and potentially incorporating performance incentives or penalties.

How does the $115M+ award compare to historical IT spending by the U.S. Coast Guard?

The $115,397,228.91 award represents a substantial investment in IT services for the U.S. Coast Guard. To contextualize this, one would need to analyze the Coast Guard's historical IT spending trends. This figure should be compared against annual IT budgets, previous contract awards for similar services, and the overall agency spending profile. If this contract represents a significant portion of their IT budget or a major modernization effort, it warrants closer examination of its strategic importance and expected return on investment. Without historical data, it's difficult to definitively state if this is an outlier or a typical investment.

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

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: $125,239,926

Exercised Options: $122,260,141

Current Obligation: $115,397,229

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSCGG310DPWV500

IDV Type: IDC

Timeline