DoD's $20.2M Enterprise Services Software Requirement contract awarded to AMERICAN SYSTEMS CORPORATION for infrastructure modernization

Contract Overview

Contract Amount: $20,236,744 ($20.2M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-03-27

End Date: 2025-03-26

Contract Duration: 730 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE SERVICES SOFTWARE REQUIREMENT, WHICH INCLUDES ENTERPRISE LEVEL SOFTWARE DELIVERY SERVICE PLATFORM NECESSARY TO TRANSFORM EXISTING INFRASTRUCTURE INTO A MODERN SOFTWARE.

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to AMERICAN SYSTEMS CORPORATION for work described as: ENTERPRISE SERVICES SOFTWARE REQUIREMENT, WHICH INCLUDES ENTERPRISE LEVEL SOFTWARE DELIVERY SERVICE PLATFORM NECESSARY TO TRANSFORM EXISTING INFRASTRUCTURE INTO A MODERN SOFTWARE. Key points: 1. Contract aims to modernize existing infrastructure through enterprise-level software delivery services. 2. The award is a definitive contract with a firm-fixed-price structure. 3. Duration of the contract is 730 days, spanning two years. 4. The contract is managed by the Defense Health Agency within the Department of Defense. 5. The North American Industry Classification System (NAICS) code is 541513, indicating Computer Facilities Management Services. 6. The contract value is approximately $20.2 million over its term.

Value Assessment

Rating: fair

The contract value of $20.2 million over two years for enterprise software services appears to be within a reasonable range for a definitive contract of this scope. However, without specific benchmarks for similar enterprise-level software transformation projects within the DoD or comparable agencies, a precise value-for-money assessment is challenging. The firm-fixed-price structure suggests a defined scope, which can help control costs, but the absence of detailed performance metrics or comparison data makes it difficult to definitively assess if the pricing is competitive or represents excellent value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when the requirement is a continuation of a previous effort where only one vendor can provide the necessary services. The lack of competition means that price discovery through a bidding process was not utilized, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive pricing that could have driven down the cost of these essential enterprise software services.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will receive modernized IT infrastructure. The services delivered will transform existing infrastructure into a modern software environment. The geographic impact is likely within the operational areas of the Defense Health Agency, potentially across various military installations. Workforce implications may include the need for specialized IT personnel to manage and implement the new software solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of detailed performance metrics makes value assessment difficult.
Potential for cost overruns if scope is not tightly managed in a sole-source environment.

Positive Signals

Firm-fixed-price contract provides cost certainty for a defined scope.
Focus on modernizing infrastructure addresses critical IT needs.
Award to AMERICAN SYSTEMS CORPORATION suggests they possess necessary expertise for this specific requirement.

Sector Analysis

This contract falls within the broader Information Technology (IT) and professional services sector, specifically focusing on enterprise software and infrastructure management. The market for such services is large and competitive, with numerous firms offering solutions for IT modernization and digital transformation. The DoD is a significant consumer of these services, often requiring specialized capabilities due to the complexity and security demands of military systems. Benchmarks for similar large-scale enterprise software implementations within government can vary widely based on scope, technology stack, and duration.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, AMERICAN SYSTEMS CORPORATION, will likely manage the subcontracting opportunities, if any, based on their own business strategy and the specific needs of the project, rather than through a mandated set-aside program.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Health Agency contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract structure, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed operational oversight specifics are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Enterprise IT Modernization Programs
Defense Health Agency IT Services
Software Development and Delivery Services
Computer Facilities Management Services

Risk Flags

Sole-source award may limit cost savings.
Potential for scope creep in complex IT modernization projects.
Dependence on a single contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to AMERICAN SYSTEMS CORPORATION. ENTERPRISE SERVICES SOFTWARE REQUIREMENT, WHICH INCLUDES ENTERPRISE LEVEL SOFTWARE DELIVERY SERVICE PLATFORM NECESSARY TO TRANSFORM EXISTING INFRASTRUCTURE INTO A MODERN SOFTWARE.

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $20.2 million.

What is the period of performance?

Start: 2023-03-27. End: 2025-03-26.

What is the track record of AMERICAN SYSTEMS CORPORATION in delivering similar enterprise software transformation services to the Department of Defense?

AMERICAN SYSTEMS CORPORATION has a history of providing IT and engineering solutions to the U.S. military and government agencies. While specific details on their past performance for large-scale enterprise software transformation projects of this exact nature are not detailed in the provided data, their general experience suggests a capability to handle complex IT requirements. Further investigation into their contract history with the DoD, particularly with the Defense Health Agency, would be necessary to fully assess their track record. This would involve reviewing past performance evaluations, any reported issues or successes on similar projects, and their overall financial stability and capacity to execute a contract of this magnitude.

How does the $20.2 million contract value compare to similar enterprise software modernization efforts within the DoD or other federal agencies?

Comparing the $20.2 million contract value requires context regarding the scope, duration, and specific services included. For a two-year definitive contract focused on enterprise-level software delivery to transform existing infrastructure, this amount appears to be within a plausible range for a large federal agency like the Department of Defense. However, without detailed breakdowns of the services (e.g., software development, integration, cloud migration, cybersecurity enhancements) and the complexity of the existing infrastructure, a direct comparison is difficult. Similar projects can range from a few million to tens or even hundreds of millions of dollars depending on these factors. The sole-source nature of this award also limits direct benchmarking against competitively bid contracts.

What are the primary risks associated with this sole-source award for enterprise software services?

The primary risk associated with this sole-source award is the potential for suboptimal pricing due to the lack of competition. Without multiple bids, there is less market pressure to ensure the most cost-effective solution is secured. Another risk is vendor lock-in, where the agency becomes heavily reliant on AMERICAN SYSTEMS CORPORATION's specific solutions and expertise, potentially making future transitions or integrations more complex and costly. Furthermore, if the contractor's performance falters or if unforeseen technical challenges arise, the sole-source nature could complicate the process of seeking alternative solutions or remedies compared to a competitively awarded contract. Ensuring robust contract management and performance monitoring is crucial to mitigate these risks.

How effective is the firm-fixed-price contract type in managing the costs and scope of this enterprise software modernization?

The firm-fixed-price (FFP) contract type is generally effective in managing costs and scope when the requirements are well-defined and unlikely to change significantly. For this enterprise software modernization, an FFP contract provides cost certainty for the government, as the contractor assumes the risk of cost overruns. This structure incentivizes the contractor to manage their resources efficiently to meet the defined scope within the agreed-upon price. However, the success of an FFP contract hinges on the clarity and completeness of the initial requirements. If the scope proves to be more complex or evolves substantially during the contract period, changes could lead to costly modifications or disputes, potentially negating some of the cost-control benefits.

What are the potential long-term implications for the Defense Health Agency's IT infrastructure and operations resulting from this contract?

This contract aims to transform the Defense Health Agency's (DHA) existing infrastructure into a modern software environment. The long-term implications could be significant, potentially leading to improved operational efficiency, enhanced data security, better interoperability between systems, and increased agility in responding to evolving healthcare IT needs. A modernized infrastructure can support advanced analytics, telemedicine capabilities, and more robust data management, ultimately benefiting military healthcare delivery. However, the success of these transformations depends heavily on the effective implementation by AMERICAN SYSTEMS CORPORATION and the DHA's ability to manage and leverage the new systems post-implementation. Poor execution could result in continued inefficiencies or new technical challenges.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HT003823R0005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $74,585,311

Exercised Options: $42,216,424

Current Obligation: $20,236,744

Actual Outlays: $9,886,169

Subaward Activity

Number of Subawards: 46

Total Subaward Amount: $4,222,617

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline