DoD's $6.8M Software Upgrade Contract with Lunit Americas Raises Questions on Competition and Value
Contract Overview
Contract Amount: $6,792,587 ($6.8M)
Contractor: Lunit Americas, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-09-28
End Date: 2026-09-30
Contract Duration: 732 days
Daily Burn Rate: $9.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SOFTWARE UPGRADES
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78234
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $6.8 million to LUNIT AMERICAS, INC. for work described as: SOFTWARE UPGRADES Key points: 1. Significant spending on software upgrades for the Defense Health Agency. 2. Contract awarded to Lunit Americas, Inc. without full and open competition. 3. Potential for higher costs due to limited competition. 4. The 'Other Computer Related Services' NAICS code is broad, making direct sector benchmarks difficult.
Value Assessment
Rating: questionable
The contract value of $6.8 million for software upgrades is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed, indicating a limited competition approach. This lack of competition may have hindered price discovery and potentially led to a higher overall cost for the government.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for these software upgrades.
Public Impact
Taxpayers may be overpaying for essential software upgrades due to a lack of competitive bidding. The Defense Health Agency's reliance on a single vendor for critical software could pose a future risk if the vendor's services or pricing change unfavorably. Transparency in the procurement process is reduced when contracts are not competed, making it harder for the public to understand spending decisions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Limited transparency
Positive Signals
- Definitive contract awarded
- Firm Fixed Price contract type
Sector Analysis
This contract falls under 'Other Computer Related Services,' a broad category. While software upgrades are crucial for modern defense operations, the specific value benchmark is hard to establish without knowing the exact nature of the upgrades and comparing it to similar DHA or DoD IT procurements.
Small Business Impact
The data indicates this contract was not awarded to a small business, and the procurement method does not suggest specific set-asides for small businesses.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for limited competition was sound and that the pricing is reasonable. Accountability for the procurement decision rests with the Defense Health Agency contracting officers.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited transparency in procurement
- No small business participation indicated
Tags
other-computer-related-services, department-of-defense, tx, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.8 million to LUNIT AMERICAS, INC.. SOFTWARE UPGRADES
Who is the contractor on this award?
The obligated recipient is LUNIT AMERICAS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $6.8 million.
What is the period of performance?
Start: 2024-09-28. End: 2026-09-30.
What specific software is being upgraded, and what is the justification for not competing this requirement?
The specific software is not detailed in the provided data. The justification for not competing the requirement is crucial for assessing value. Typically, sole-source or limited competition is reserved for unique capabilities, urgent needs, or when only one vendor can provide the service. Without this justification, it's difficult to ascertain if the $6.8 million is a fair price.
What are the risks associated with awarding a $6.8 million contract without competition?
The primary risk is paying an inflated price due to the lack of competitive pressure. Other risks include vendor lock-in, potential for reduced service quality over time, and a lack of innovation that might come from a competitive market. It also sets a precedent that may encourage future non-competitive awards.
How does this spending align with the Defense Health Agency's overall IT modernization goals and budget?
Without access to the DHA's IT modernization strategy and budget, it's impossible to definitively assess alignment. However, significant investments in software upgrades are generally expected to support modernization. The lack of competition raises concerns about the cost-effectiveness of this particular investment in achieving those goals.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HT001524R0033
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 19000 33RD AVE W STE 130, LYNNWOOD, WA, 98036
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $7,265,462
Exercised Options: $6,792,587
Current Obligation: $6,792,587
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2024-09-28
Current End Date: 2026-09-30
Potential End Date: 2028-09-30 00:00:00
Last Modified: 2025-12-03
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