DHS's $30.4M TSA IT contract for technical oversight awarded to TERRACORE INC. shows fair value

Contract Overview

Contract Amount: $30,411,658 ($30.4M)

Contractor: Teracore Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2016-11-28

End Date: 2020-11-27

Contract Duration: 1,460 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF THE SCOPE OF THIS CONTRACT IS TO PROVIDE TECHNICAL AND OPERATIONAL OVERSIGHT AND ADVISORY SUPPORT TO TSA OIT/OED TO ASSIST IN THE MONITORING, PERFORMANCE TRACKING AND QUALITY ASSURANCE ACTIVITIES FOR ITS' TECHNICAL IT CONTRACTS IN THE AREAS OF TECHNICAL OPERATIONS MANAGEMENT, TECHNICAL QUALITY ASSURANCE SUPPORT, INCIDENT MANAGEMENT, PROBLEM MANAGEMENT, TECHNICAL ADVISORY, PROGRAM AND PORTFOLIO MANAGEMENT AND CONTRACT ADMINISTRATIVE AND MANAGEMENT RESPONSIBILITIES AND ACTIVITIES FOR THE FUNCTIONAL SUBJECT MATTER AREAS WITHIN OED.

Place of Performance

Location: SPRINGFIELD, ACCOMACK County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $30.4 million to TERACORE INC. for work described as: IGF::OT::IGF THE SCOPE OF THIS CONTRACT IS TO PROVIDE TECHNICAL AND OPERATIONAL OVERSIGHT AND ADVISORY SUPPORT TO TSA OIT/OED TO ASSIST IN THE MONITORING, PERFORMANCE TRACKING AND QUALITY ASSURANCE ACTIVITIES FOR ITS' TECHNICAL IT CONTRACTS IN THE AREAS OF TECHNICAL OPERATIONS MA… Key points: 1. The contract's value appears reasonable given the scope of technical and operational advisory support for TSA's IT contracts. 2. Competition was full and open, suggesting a competitive bidding process that likely influenced pricing. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. Performance is tracked through monitoring, performance tracking, and quality assurance activities. 5. This contract falls within the Computer Systems Design Services sector, supporting TSA's IT infrastructure. 6. The contract duration of 4 years (1460 days) aligns with the need for sustained technical support.

Value Assessment

Rating: fair

The contract's total value of $30.4 million over four years suggests an average annual value of approximately $7.6 million. Benchmarking this against similar contracts for technical and operational IT oversight within large federal agencies like DHS indicates a fair market price. The firm fixed-price structure further supports value by establishing clear cost expectations, though detailed cost breakdowns are not publicly available to perform a granular unit-cost analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bidders indicates a moderate level of competition. While not a large number, it suggests that the market for these specialized IT oversight services is not entirely concentrated, and the government had options to choose from, which generally aids in price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and a wider pool of qualified contractors, ensuring the government receives the best value.

Public Impact

The primary beneficiary is the Transportation Security Administration (TSA), which receives critical support for managing its IT contracts. Services delivered include technical and operational oversight, performance tracking, quality assurance, incident management, and program management. The geographic impact is primarily within the TSA's operational domain, supporting its IT infrastructure nationwide. Workforce implications include the need for skilled technical and management professionals to provide advisory support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if advisory services are not clearly defined and managed.
Reliance on contractor expertise could create knowledge gaps within TSA if not managed proactively.
Ensuring consistent quality of advisory support across the contract duration requires robust performance monitoring.

Positive Signals

Firm fixed-price contract structure provides cost certainty.
Full and open competition suggests a competitive market for these services.
Contract duration allows for sustained support and relationship building.

Sector Analysis

This contract falls under the Computer Systems Design Services (NAICS 541512) sector, which is a significant segment of the federal IT market. This sector encompasses a wide range of services from custom software development to IT consulting and system integration. The federal government is a major consumer of these services, with spending often concentrated in agencies like DHS, DoD, and GSA. Comparable spending benchmarks for IT advisory and management support contracts within large agencies typically range from several million to tens of millions of dollars annually, depending on the complexity and scope.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses. The award to TERRACORE INC., a mid-sized or large business, suggests that the primary focus was on securing specialized expertise. This means that opportunities for small businesses to participate in this specific contract are likely limited unless they are part of a larger subcontracting effort by the prime contractor.

Oversight & Accountability

Oversight is managed through the TSA's Office of Information Technology (OIT) and Office of Executive Director (OED), who are responsible for monitoring the contractor's performance. The contract includes provisions for quality assurance and performance tracking. Transparency is facilitated through the contract award process and reporting requirements, though detailed performance metrics are not publicly disclosed. The Inspector General for DHS would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Management Support Services
Technical Consulting Services
Program Management Support
IT Quality Assurance
Computer Systems Design

Risk Flags

Contract duration may lead to contractor dependency.
Scope definition is critical to prevent overruns.
Performance metrics need rigorous tracking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $30.4 million to TERACORE INC.. IGF::OT::IGF THE SCOPE OF THIS CONTRACT IS TO PROVIDE TECHNICAL AND OPERATIONAL OVERSIGHT AND ADVISORY SUPPORT TO TSA OIT/OED TO ASSIST IN THE MONITORING, PERFORMANCE TRACKING AND QUALITY ASSURANCE ACTIVITIES FOR ITS' TECHNICAL IT CONTRACTS IN THE AREAS OF TECHNICAL OPERATIONS MANAGEMENT, TECHNICAL QUALITY ASSURANCE SUPPORT, INCIDENT MANAGEMENT, PROBLEM MANAGEMENT, TECHNICAL ADVISORY, PROGRAM AND PORTFOLIO MANAGEMENT AND CONTRACT ADMINISTRATIVE AND MANAGEMENT RESPONSIBILITIES AND ACTIVITIES FOR

Who is the contractor on this award?

The obligated recipient is TERACORE INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $30.4 million.

What is the period of performance?

Start: 2016-11-28. End: 2020-11-27.

What is TERRACORE INC.'s track record with federal IT contracts, particularly within DHS?

TERRACORE INC. has a history of performing IT-related services for federal agencies, including the Department of Homeland Security. While specific details on past performance for this exact scope are not readily available in the provided data, their involvement in contracts such as this one indicates a capacity to deliver technical and operational support. A deeper dive into their contract history, including past performance evaluations and any reported issues, would be necessary for a comprehensive assessment of their track record. However, securing this contract suggests they met the requirements and qualifications set forth by TSA during the competitive bidding process.

How does the pricing of this contract compare to similar IT oversight contracts awarded by other federal agencies?

The total contract value of $30.4 million over four years, averaging approximately $7.6 million annually, appears to be within a reasonable range for specialized IT oversight and advisory services for a large agency like TSA. Benchmarking against similar contracts within DHS or other large federal departments (e.g., DoD, GSA) for technical program management, quality assurance, and IT operations support often shows annual values in the mid-to-high single-digit millions. Without access to detailed cost breakdowns or specific service-level agreements, a precise comparison is difficult. However, the firm fixed-price nature of this contract suggests that the government sought cost certainty, and the competitive bidding process likely contributed to a fair market price.

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

Key risks include potential scope creep, where the contractor's responsibilities might expand beyond the original intent, and ensuring the consistent quality of advisory services over the contract's four-year duration. Mitigation strategies likely involve robust contract management by TSA's OIT/OED, clear definition of deliverables and performance standards, and regular performance reviews. The firm fixed-price structure also mitigates financial risk for the government by capping costs. Reliance on contractor expertise is another risk, which can be managed through knowledge transfer initiatives and ensuring TSA personnel are involved in oversight.

How effective has TSA been in leveraging IT oversight contracts to improve its technical IT operations?

The effectiveness of this specific contract in improving TSA's technical IT operations is not directly measurable from the provided data. However, the contract's stated purpose is to provide 'technical and operational oversight and advisory support... to assist in the monitoring, performance tracking and quality assurance activities for its' technical IT contracts.' This suggests an intent to enhance the management and performance of TSA's IT portfolio. The success would depend on the quality of TERRACORE INC.'s services, the responsiveness of TSA's IT teams, and the clarity of performance metrics established. A review of TSA's IT project success rates and operational efficiency metrics before and after the contract period would be needed for a definitive assessment.

What are the historical spending patterns for IT oversight and advisory services within TSA or DHS?

Historical spending patterns for IT oversight and advisory services within TSA and DHS are generally substantial, reflecting the critical role of IT in modern government operations. Agencies like TSA manage vast and complex IT infrastructures, requiring continuous support for contract management, performance monitoring, and technical guidance. While specific historical figures for TSA's IT oversight spending are not provided, it's common for such contracts to represent a significant portion of an agency's IT budget, often in the millions of dollars annually. This contract's value of $30.4 million over four years aligns with the expected scale of investment in maintaining and improving IT service delivery within a major transportation security agency.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3300 HOLCOMB BRIDGE RD STE 226, NORCROSS, GA, 30092

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $30,411,658

Exercised Options: $30,411,658

Current Obligation: $30,411,658

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSHQDC13DE2027

IDV Type: IDC

Timeline