Interior's $48.6M EES contract to IQ Business Group shows long duration and high cost for IT infrastructure

Contract Overview

Contract Amount: $48,579,056 ($48.6M)

Contractor: THE IQ Business Group, Inc.

Awarding Agency: Department of the Interior

Start Date: 2012-05-16

End Date: 2020-11-15

Contract Duration: 3,105 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF ENTERPRISE EARCHIVE SYSTEM (EES)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20240

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Interior obligated $48.6 million to THE IQ BUSINESS GROUP, INC. for work described as: IGF::CT::IGF ENTERPRISE EARCHIVE SYSTEM (EES) Key points: 1. The contract's extended period of performance (over 8 years) suggests a need for sustained IT infrastructure support. 2. The fixed-price contract type aims to control costs, but the total value indicates significant investment. 3. The 'full and open competition after exclusion of sources' indicates a competitive process, though the specifics of the exclusion warrant review. 4. The service area is IT infrastructure, a critical but often costly component of federal operations. 5. The contract's value places it in the mid-to-large range for IT service contracts of this nature. 6. The lack of small business set-aside suggests the primary contractor is likely a larger entity.

Value Assessment

Rating: fair

The total contract value of approximately $48.6 million over more than 8 years averages to roughly $5.8 million annually. This figure needs to be benchmarked against similar contracts for IT infrastructure, data processing, and web hosting services within the Department of the Interior and across other federal agencies. Without specific performance metrics or detailed breakdowns of services rendered, it is difficult to definitively assess value for money. However, the duration suggests a stable, long-term need that, if met effectively, could represent reasonable value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This designation implies that while the competition was intended to be broad, certain sources were excluded from consideration. The exact reasons for this exclusion are not detailed but could stem from specific technical requirements, prior performance, or other justifications. The number of bidders (7) indicates a moderate level of competition, which is generally positive for price discovery, but the exclusion of sources might have limited the pool of potential offerors.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to offer their best pricing and technical solutions. However, the exclusion of certain sources could potentially lead to higher prices than a truly unrestricted full and open competition.

Public Impact

The primary beneficiary is the Department of the Interior, which receives essential IT infrastructure support for its operations. The contract delivers services related to computing infrastructure, data processing, and web hosting, crucial for modern government functions. The geographic impact is likely concentrated in the District of Columbia, where the contractor is located, and potentially at DOI facilities nationwide requiring these services. The contract supports the IT workforce within the contractor organization and potentially within the Department of the Interior through the management and utilization of these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration (over 8 years) could indicate potential for vendor lock-in or reduced agility in adopting new technologies.
The 'exclusion of sources' in the competition method raises questions about the breadth of competition and potential impact on pricing.
The lack of specific performance metrics makes it challenging to fully assess the value delivered for the $48.6 million spent.
The contract's focus on core IT infrastructure means it is susceptible to rapid technological obsolescence if not managed proactively.

Positive Signals

The contract was awarded through a competitive process, suggesting multiple vendors vied for the opportunity.
The firm fixed-price contract type provides cost certainty for the government, mitigating risks of cost overruns.
The extended performance period indicates a stable, long-term requirement being met, which can foster expertise and efficiency.
The contractor, The IQ Business Group, Inc., has a track record of performing federal contracts, suggesting some level of established capability.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a fundamental area for all federal agencies. The market for these services is vast and highly competitive, with numerous providers ranging from large corporations to specialized firms. Comparable spending benchmarks would involve looking at other federal contracts for similar IT infrastructure services, often categorized under NAICS code 518210. The size of this contract ($48.6M over 8+ years) positions it as a significant investment in maintaining essential digital operations.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'small business' flag is false. This suggests the contract was not set aside for small businesses and that the primary awardee is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for subcontracting opportunities, which is not detailed here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers, program managers within the Department of the Interior, and potentially the agency's Inspector General. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency would be enhanced through regular reporting requirements stipulated in the contract and public contract databases like FPDS. The Inspector General's office would have jurisdiction to investigate any potential fraud, waste, or abuse related to the contract's performance and expenditure.

Related Government Programs

Federal Data Center Consolidation Initiative
IT Modernization Initiatives
Cloud Computing Services Contracts
Enterprise IT Services
Web Hosting and Data Processing Services

Risk Flags

Long contract duration
Exclusion of sources in competition
Lack of detailed performance metrics in summary data
Potential for technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $48.6 million to THE IQ BUSINESS GROUP, INC.. IGF::CT::IGF ENTERPRISE EARCHIVE SYSTEM (EES)

Who is the contractor on this award?

The obligated recipient is THE IQ BUSINESS GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $48.6 million.

What is the period of performance?

Start: 2012-05-16. End: 2020-11-15.

What specific IT infrastructure services were provided under the EES contract, and how did they align with the Department of the Interior's mission objectives?

The Enterprise E-Archive System (EES) contract, awarded to The IQ Business Group, Inc., primarily covered services related to computing infrastructure, data processing, and web hosting. These services are fundamental to maintaining the digital backbone of any large organization, enabling the storage, retrieval, and accessibility of critical data and applications. For the Department of the Interior (DOI), this likely translated into supporting various internal systems, agency websites, and data repositories essential for managing natural resources, land use, and other departmental functions. The contract's duration of over eight years suggests a sustained need for these foundational IT services, implying they were integral to the DOI's ongoing operational requirements and long-term data management strategies.

How does the average annual cost of this contract compare to similar IT infrastructure contracts awarded by other federal agencies?

The total contract value of approximately $48.6 million over a period of roughly 3105 days (approximately 8.5 years) equates to an average annual expenditure of about $5.7 million. Benchmarking this against similar IT infrastructure, data processing, and web hosting contracts (NAICS 518210) across the federal government requires access to comprehensive contract databases and analysis tools. However, for a contract supporting enterprise-level services for a large department like the DOI, an annual spend in the mid-single-digit millions is not uncommon. Factors influencing cost include the scope of services, service level agreements (SLAs), security requirements, and the specific technologies employed. Without detailed service scope and performance data, a precise comparison is challenging, but the figure appears within a plausible range for sustained federal IT infrastructure support.

What were the specific reasons for excluding certain sources during the 'full and open competition after exclusion of sources' process?

The designation 'full and open competition after exclusion of sources' indicates that while the competition was intended to be broad, specific vendors or types of vendors were intentionally excluded from bidding. The Federal Acquisition Regulation (FAR) permits such exclusions under specific circumstances, often related to national security, unique capabilities, or prior performance issues. For this contract, the exclusion could have been based on the need for specialized knowledge of existing DOI systems, specific security clearances, or a requirement for the contractor to have prior experience with the EES system itself. Without further documentation or justification provided by the contracting agency (Department of the Interior), the precise reasons remain speculative. This method aims to balance competitive principles with the need for specific qualifications or continuity.

What is the track record of The IQ Business Group, Inc. in performing federal contracts, particularly in IT infrastructure services?

The IQ Business Group, Inc. has a history of performing federal contracts, including those related to IT services. Publicly available data indicates they have been awarded contracts across various agencies, suggesting a capacity to navigate federal procurement processes and deliver services. For the Department of the Interior's EES contract, their performance over the 8+ year period would be the most direct indicator of their track record on this specific engagement. Assessing their broader track record involves reviewing past performance evaluations, contract modifications, and any reported issues on previous federal awards. Generally, a long-standing relationship with a major agency like the DOI, as evidenced by this contract, implies a degree of successful performance and reliability.

Given the contract's duration and value, what are the potential risks associated with technological obsolescence and vendor lock-in?

The contract's extended performance period (over 8 years) inherently carries risks of technological obsolescence and vendor lock-in. IT infrastructure technologies evolve rapidly, and services that are cutting-edge at the start of an 8-year contract may be outdated by its end. This necessitates proactive contract management, including regular reviews of technology roadmaps and potential service updates or modifications. Vendor lock-in is also a concern, as the incumbent contractor may develop deep integration with agency systems, making it difficult and costly to switch providers. To mitigate these risks, the Department of the Interior would need to ensure contract clauses allow for technology refreshes, performance-based metrics that encourage modernization, and clear exit strategies to facilitate transition if necessary.

How did the number of bidders (7) influence price discovery and the overall value for money achieved in this contract?

With seven bidders participating in the competition, there was a moderate level of price discovery. A larger number of bidders generally leads to more competitive pricing as companies strive to offer the most attractive proposals. Seven bidders suggest that the market had sufficient interest and capability to respond to the solicitation. This level of competition likely pressured bidders to offer competitive pricing and robust technical solutions. However, the 'exclusion of sources' aspect means that the full potential of the market may not have been realized. Nonetheless, a seven-bidder scenario is generally considered healthy and provides a reasonable basis for assessing value for money, assuming the evaluation criteria were effectively applied.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: D12PC00138

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE IQ Business Group (PTY) Ltd

Address: 2300 WINDY RIDGE PKWY SE STE 520N, ATLANTA, GA, 30339

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

Financial Breakdown

Contract Ceiling: $79,936,395

Exercised Options: $48,609,544

Current Obligation: $48,579,056

Actual Outlays: $7,135,296

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline