DHS awarded NTT DATA $52.1M for IT services, with a 4.75% cost overrun on a time-and-materials contract

Contract Overview

Contract Amount: $52,114,459 ($52.1M)

Contractor: NTT Data Federal Services, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2015-09-25

End Date: 2018-09-25

Contract Duration: 1,096 days

Daily Burn Rate: $47.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF QUALITY ASSURANCE TECHNICAL SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20529

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $52.1 million to NTT DATA FEDERAL SERVICES, INC. for work described as: IGF::OT::IGF QUALITY ASSURANCE TECHNICAL SERVICES Key points: 1. The contract utilized a time-and-materials pricing structure, which can lead to cost overruns if not carefully managed. 2. The final cost exceeded the initial estimated value, indicating potential inefficiencies or scope creep during performance. 3. Competition was robust, suggesting a competitive market for these IT services, which should theoretically drive better pricing. 4. The contract was awarded to a single vendor, NTT DATA FEDERAL SERVICES, INC., after a full and open competition. 5. The duration of the contract was 3 years, with a delivery order issued under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. The services provided fall under Computer Systems Design Services, a common category within federal IT procurement.

Value Assessment

Rating: fair

The final award amount of $52.1 million represents a 4.75% increase over the initial estimated value, suggesting some level of cost escalation. Benchmarking against similar Computer Systems Design Services contracts awarded by DHS or other agencies could provide further insight into whether this cost increase is typical for the scope and duration. The use of Time and Materials pricing, while flexible, inherently carries a higher risk of cost overruns compared to fixed-price contracts, especially for projects with evolving requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it was a delivery order under a larger IDIQ suggests that the initial competition occurred at the IDIQ level, and this specific order was then placed. The number of bidders for this specific delivery order is not explicitly stated, but the 'full and open' designation implies a competitive process.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions. It ensures that the government is not limited to a single provider, increasing the likelihood of obtaining best value.

Public Impact

The primary beneficiaries are U.S. Citizenship and Immigration Services (USCIS) within the Department of Homeland Security, receiving IT support. The services delivered are crucial for the operational efficiency and technological infrastructure of USCIS. The contract's impact is concentrated in the District of Columbia, where the agency's operations are likely centered. The contract supports IT professionals and potentially other roles within NTT DATA FEDERAL SERVICES, INC., contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The use of Time and Materials pricing increases the risk of cost overruns if not managed diligently.
The final cost exceeded the initial estimate, suggesting potential scope creep or underestimation of effort.
The contract duration of three years requires ongoing monitoring to ensure continued value and performance.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The contract supports critical IT functions for a major federal agency (DHS/USCIS).
The vendor, NTT DATA FEDERAL SERVICES, INC., is an established IT services provider.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The federal IT market is substantial, with agencies consistently investing in systems modernization, cybersecurity, and operational support. Contracts like this are typical for agencies requiring specialized IT expertise to maintain and enhance their complex systems. Benchmarks for similar IT services contracts often vary widely based on complexity, duration, and specific skill sets required.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses stemming from this particular award. The primary contractor is a large business, and any subcontracting would be at their discretion, not mandated by a small business set-aside provision.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within U.S. Citizenship and Immigration Services. Performance monitoring, review of deliverables, and financial oversight are standard accountability measures. Transparency is generally maintained through contract databases like FPDS-NG, where award details are publicly available. The Inspector General for the Department of Homeland Security would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Professional Services
Computer Systems Design Services
Department of Homeland Security IT Contracts
USCIS IT Support
Time and Materials Contracts

Risk Flags

Cost Overrun
Time and Materials Pricing Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $52.1 million to NTT DATA FEDERAL SERVICES, INC.. IGF::OT::IGF QUALITY ASSURANCE TECHNICAL SERVICES

Who is the contractor on this award?

The obligated recipient is NTT DATA FEDERAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Citizenship and Immigration Services).

What is the total obligated amount?

The obligated amount is $52.1 million.

What is the period of performance?

Start: 2015-09-25. End: 2018-09-25.

What was the specific nature of the IT services provided under this contract?

The contract falls under the NAICS code 541512 for Computer Systems Design Services. While the specific details of the services rendered are not fully elaborated in the provided data, this category typically encompasses designing, developing, and implementing information systems. This could include software development, systems integration, IT consulting, and infrastructure management. Given the agency (USCIS), the services likely supported the agency's mission-critical IT systems related to immigration processing, case management, or internal operations.

How does the 4.75% cost overrun compare to typical cost escalations for similar Time and Materials IT contracts?

A 4.75% cost overrun on a Time and Materials contract can be considered moderate, but its significance depends heavily on the contract's total value, duration, and the complexity of the services. Time and Materials contracts are inherently susceptible to cost increases due to their flexible nature, allowing for adjustments in labor hours and material costs. Without specific benchmarks for comparable USCIS IT contracts of similar scope and duration, it's difficult to definitively label this overrun as high or low. However, agencies strive to manage T&M contracts closely to minimize such deviations, often through detailed monitoring of labor categories, hours, and material usage.

What are the potential risks associated with NTT DATA FEDERAL SERVICES, INC. having been awarded this contract, considering its track record?

The provided data does not include specific details about NTT DATA FEDERAL SERVICES, INC.'s track record, such as past performance ratings, past performance issues, or litigation history. Therefore, a direct risk assessment based on their track record cannot be made from this information alone. Generally, for any large federal IT contract, risks can include potential delays, cost overruns (as indicated by the 4.75% increase), cybersecurity vulnerabilities, or failure to meet performance requirements. A comprehensive risk assessment would require reviewing past performance evaluations, CPARS reports, and any documented issues from previous government contracts held by the vendor.

How effective has the 'full and open competition' strategy been in ensuring value for money for this specific contract?

The 'full and open competition' strategy is designed to maximize value for money by encouraging a wide range of bidders, which theoretically drives down prices and fosters innovation. For this specific contract, the data shows a final award amount of $52.1 million, which exceeded the initial estimate by 4.75%. While the competition itself likely contributed to establishing a baseline price, the cost overrun suggests that either the initial estimate was inaccurate, or unforeseen circumstances led to increased costs during performance. The effectiveness in ensuring 'best value' is thus mixed; competition was present, but cost management during execution warrants scrutiny.

What are the historical spending patterns for Computer Systems Design Services at USCIS or DHS?

The provided data is specific to a single contract award and does not offer historical spending patterns. To analyze historical spending for Computer Systems Design Services at USCIS or DHS, one would need to access broader federal procurement databases (like FPDS-NG or USASpending.gov) and query spending trends over multiple fiscal years. This would involve filtering by agency, NAICS code (541512), and contract type. Such an analysis could reveal whether spending in this category has been increasing or decreasing, identify major contractors, and highlight the typical contract values and durations, providing context for the $52.1 million award.

Industry Classification

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

Solicitation ID: HSSCCG-15-R-00026

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nippon Telegraph and Telephone Corporation

Address: 1660 INTERNATIONAL DR STE 300, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $64,100,329

Exercised Options: $52,114,459

Current Obligation: $52,114,459

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSHQDC13DE2014

IDV Type: IDC

Timeline