Interior Department Spends $24M on FlexTrain Equipment, Lacking Competition

Contract Overview

Contract Amount: $23,957,247 ($24.0M)

Contractor: SRI International

Awarding Agency: Department of the Interior

Start Date: 2015-02-01

End Date: 2016-06-30

Contract Duration: 515 days

Daily Burn Rate: $46.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::UGF FLEXTRAIN EQUIPMENT PURCHASE

Place of Performance

Location: MENLO PARK, SAN MATEO County, CALIFORNIA, 94025

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $24.0 million to SRI INTERNATIONAL for work described as: IGF::OT::UGF FLEXTRAIN EQUIPMENT PURCHASE Key points: 1. Significant spending on specialized equipment without competitive bidding raises cost concerns. 2. The contract was awarded sole-source, limiting potential for price discovery and savings. 3. Lack of competition suggests potential for overpayment and reduced value for taxpayers. 4. The IT services sector often benefits from robust competition, making this an outlier.

Value Assessment

Rating: questionable

The contract value of $23.96 million for 'Other Computer Related Services' is difficult to benchmark without specific details on the 'FLEXTRAIN EQUIPMENT'. However, the absence of competition for a substantial sum warrants scrutiny regarding potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning SRI INTERNATIONAL was the only vendor considered. This method bypasses competitive processes, potentially leading to higher prices than if multiple vendors had bid.

Taxpayer Impact: The lack of competition for a nearly $24 million contract means taxpayers may have paid more than necessary, reducing the overall value derived from this expenditure.

Public Impact

Taxpayers may have overpaid for specialized IT equipment due to the absence of competitive bidding. The sole-source award limits transparency and accountability in government procurement. Future procurements of similar equipment could be impacted if competitive strategies are not prioritized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value without clear justification

Positive Signals

Contract awarded to a single vendor
Specific equipment procured

Sector Analysis

The procurement falls under 'Other Computer Related Services' (NAICS 541519). While IT services generally see competitive markets, sole-source awards for specialized equipment can occur, though they require strong justification to ensure fair pricing.

Small Business Impact

The contract was awarded to SRI INTERNATIONAL, a large business. There is no indication that small businesses were involved or considered in this sole-source procurement.

Oversight & Accountability

The sole-source nature of this contract warrants further oversight to ensure the justification for not competing was sound and that the price paid was fair and reasonable. Accountability for the procurement decision rests with the Department of the Interior.

Related Government Programs

Other Computer Related Services
Department of the Interior Contracting
Departmental Offices Programs

Risk Flags

Sole-source award raises concerns about fair pricing.
Lack of competition limits potential for cost savings.
High dollar value without clear competitive justification.
Potential for taxpayer funds to be used inefficiently.
Limited transparency in the procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $24.0 million to SRI INTERNATIONAL. IGF::OT::UGF FLEXTRAIN EQUIPMENT PURCHASE

Who is the contractor on this award?

The obligated recipient is SRI INTERNATIONAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2015-02-01. End: 2016-06-30.

What specific justification was provided for awarding this contract on a sole-source basis, and was it adequately documented?

The provided data indicates the contract was 'NOT COMPETED' and awarded as 'sole-source'. A thorough review would require accessing the contract file to examine the specific justification (e.g., unique capabilities, urgent need) and verify its adequacy and compliance with federal acquisition regulations. Without this documentation, it's impossible to fully assess the validity of the sole-source decision.

How was the price determined to be fair and reasonable in the absence of competitive bids?

For sole-source contracts, agencies typically rely on price analysis techniques, such as comparing the proposed price to historical prices for similar items, using independent government cost estimates, or analyzing the vendor's cost and profit. The data does not provide this information, necessitating a review of the contract file to understand the price negotiation and justification process.

What is the expected return on investment or tangible benefit derived from the FLEXTRAIN EQUIPMENT purchase to justify the $24 million expenditure?

The data identifies the purchase as 'FLEXTRAIN EQUIPMENT' under 'Other Computer Related Services'. The specific function, capabilities, and intended use of this equipment are not detailed. Understanding the operational improvements, efficiency gains, or mission-critical support it provides is essential to evaluate whether the significant investment yielded commensurate value for the Department of the Interior.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 94025

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

Financial Breakdown

Contract Ceiling: $23,957,247

Exercised Options: $23,957,247

Current Obligation: $23,957,247

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline