DoD's $12.8M CloudPareto Subscription Contract Raises Questions on Value and Competition

Contract Overview

Contract Amount: $12,791,680 ($12.8M)

Contractor: Cloudpareto LLC

Awarding Agency: Department of Defense

Start Date: 2024-03-01

End Date: 2026-09-23

Contract Duration: 936 days

Daily Burn Rate: $13.7K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BIDSCALE PLATFORM SUBSCRIPTION

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to CLOUDPARETO LLC for work described as: BIDSCALE PLATFORM SUBSCRIPTION Key points: 1. The contract's value proposition requires scrutiny given the lack of competitive bidding. 2. Limited competition may have led to suboptimal pricing for the government. 3. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, potentially masking specific service value. 4. Performance context is limited without clear metrics for the 'BIDSCALE PLATFORM SUBSCRIPTION'. 5. This contract falls within the broader IT and Defense sectors, with specific application in healthcare IT. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

The $12.8 million contract for a 'BIDSCALE PLATFORM SUBSCRIPTION' awarded to CloudPareto LLC lacks sufficient justification for its value. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The broad NAICS code (541990) further complicates an assessment of whether the price reflects fair market value for the specific services rendered. The fixed-price nature of the contract shifts risk to the contractor, but the overall value for money is uncertain due to the non-competitive award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures), indicating a sole-source or limited competition procurement. The lack of open competition means that multiple potential vendors were not solicited, and the government did not benefit from a range of proposals and pricing strategies. This approach limits the government's ability to ensure it is receiving the most cost-effective solution available in the market.

Taxpayer Impact: Taxpayers may have paid a premium for this platform due to the absence of competitive pressure to drive down costs. The lack of transparency in the procurement process hinders the ability to confirm if the selected vendor offered the best value.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Health Agency, which will utilize the BIDSCALE platform. The platform is intended to provide services within the 'All Other Professional, Scientific, and Technical Services' category. The geographic impact is likely concentrated within the agency's operational areas, primarily in Virginia where the contractor is located. Workforce implications are not explicitly detailed but may involve IT and analytical personnel managing or utilizing the platform.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment and suboptimal value.
The broad NAICS code obscures the specific nature and value of the services procured.
Absence of clear performance metrics makes it difficult to assess the platform's effectiveness.
Sole-source award limits transparency and potential for cost savings through competition.

Positive Signals

The contract is a firm-fixed-price award, which generally shifts cost risk to the contractor.
The contract duration is defined, providing a clear period of performance.
The platform subscription is intended to support agency operations.

Sector Analysis

The contract falls under the professional, scientific, and technical services sector, with specific relevance to IT solutions for government agencies. The market for such platforms is competitive, with numerous vendors offering solutions for data analysis, cloud management, and IT optimization. However, government procurement processes, especially sole-source awards, can limit access to the full spectrum of market offerings and innovation. Benchmarking against similar platform subscriptions within the federal IT landscape would be beneficial but is challenging without competitive data.

Small Business Impact

The contract indicates that small business participation was not a primary consideration, as the 'sb' (small business) flag is false and the 'ss' (small business set-aside) flag is also false. This suggests that the procurement was not specifically targeted towards small businesses, and there is no explicit requirement for subcontracting with small businesses. Further analysis would be needed to determine if any subcontracting opportunities exist or were pursued.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. As a sole-source award under SAP, it may have undergone internal agency review, but external transparency and public oversight are limited. The Defense Health Agency is responsible for managing the contract, and accountability would typically be assessed through performance reviews and financial audits. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Platform Subscriptions
Professional, Scientific, and Technical Services
Defense Health Agency Contracts
Cloud Computing Services
Data Analytics Platforms

Risk Flags

Lack of Competition
Potential for Overpricing
Unclear Value Proposition
Broad Service Description

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to CLOUDPARETO LLC. BIDSCALE PLATFORM SUBSCRIPTION

Who is the contractor on this award?

The obligated recipient is CLOUDPARETO LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2024-03-01. End: 2026-09-23.

What is the specific functionality and intended use of the 'BIDSCALE PLATFORM SUBSCRIPTION'?

The provided data identifies the procurement as a 'BIDSCALE PLATFORM SUBSCRIPTION' under NAICS code 541990 (All Other Professional, Scientific, and Technical Services). While the name suggests a platform related to bidding or scaling operations, the exact functionalities are not detailed. Typically, such platforms could offer services ranging from market intelligence and competitive analysis to cloud cost management and IT resource optimization. Without further documentation or a detailed statement of work, the precise services delivered and their intended impact on the Defense Health Agency's operations remain unclear. This ambiguity makes it difficult to assess the necessity and value of the subscription.

How does the $12.8 million contract value compare to similar IT platform subscriptions within the federal government?

Benchmarking the $12.8 million contract value for the 'BIDSCALE PLATFORM SUBSCRIPTION' against similar IT platform subscriptions within the federal government is challenging due to the lack of competitive data and the broad classification of services. Federal IT spending varies widely based on the specific functionalities, user base, and contract terms (e.g., duration, included support). However, for a platform subscription of this magnitude, one would expect robust features, extensive user licenses, and comprehensive support services. Given this was a sole-source award, it is difficult to ascertain if the price reflects fair market value or if a competitive process could have yielded a lower cost for comparable services.

What are the potential risks associated with a sole-source award for this platform subscription?

The primary risk associated with a sole-source award for this platform subscription is the potential for inflated pricing and suboptimal value for money. Without competition, the government lacks the leverage to negotiate the best possible price and terms. There's also a risk that the chosen platform may not be the most innovative or suitable solution available in the market, as alternative vendors were not considered. Furthermore, a lack of transparency in the procurement process can raise concerns about fairness and potential conflicts of interest. Dependence on a single vendor can also create long-term risks related to vendor lock-in and future price increases.

What performance metrics or key performance indicators (KPIs) are likely being used to evaluate the success of this contract?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for the 'BIDSCALE PLATFORM SUBSCRIPTION'. However, for an IT platform subscription, typical KPIs might include system uptime and availability, response times for technical support, user adoption rates, data accuracy and timeliness, and the achievement of specific cost-saving or efficiency goals related to the platform's intended purpose (e.g., optimizing cloud spend, improving procurement processes). The Defense Health Agency would be responsible for defining and monitoring these metrics to ensure the contractor is meeting contractual obligations and delivering the expected value.

What is CloudPareto LLC's track record with federal government contracts, particularly sole-source awards?

Information regarding CloudPareto LLC's specific track record with federal government contracts, especially sole-source awards, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing historical contract awards, past performance evaluations, and any publicly available information on the company's federal contracting history. Understanding their experience with similar platforms and their performance on previous government contracts, particularly those awarded non-competitively, would provide valuable context for evaluating the current award's risk and potential effectiveness.

How does this $12.8M contract fit into the broader spending patterns of the Defense Health Agency for IT services?

The $12.8 million contract for the BIDSCALE PLATFORM SUBSCRIPTION represents a significant investment within the Defense Health Agency's (DHA) IT services budget. DHA, like other large federal health organizations, relies heavily on IT infrastructure and specialized platforms to manage vast amounts of data, support healthcare delivery, and ensure operational efficiency. While this specific contract's purpose is broadly defined, it likely contributes to DHA's overall strategy for data management, cloud utilization, or operational analytics. To understand its place in broader spending patterns, one would need to compare it against DHA's total IT budget, historical spending on similar platform subscriptions, and other major IT procurements to gauge its relative significance and strategic alignment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: W519TC23SCTSM

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 520 12TH ST S APT 705, ARLINGTON, VA, 22202

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,634,512

Exercised Options: $13,072,480

Current Obligation: $12,791,680

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline