DoD's $14.8M IT services contract to R&K Solutions shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $14,789,245 ($14.8M)

Contractor: R & K Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-09-04

End Date: 2012-09-03

Contract Duration: 1,826 days

Daily Burn Rate: $8.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ODC'S AND TRAVEL; BASE YEAR

Place of Performance

Location: ROANOKE, ROANOKE (CITY) County, VIRGINIA, 24012

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.8 million to R & K SOLUTIONS, INC. for work described as: ODC'S AND TRAVEL; BASE YEAR Key points: 1. Contract awarded for IT services demonstrates a reasonable price point relative to its duration and scope. 2. The procurement process was fully and openly competed, suggesting a competitive market for these services. 3. While the contract was awarded, the lack of multiple bids warrants scrutiny of market dynamics. 4. Performance context indicates a long-term engagement for IT support, suggesting a need for consistent service delivery. 5. The contract falls within the 'Other Computer Related Services' category, a common area for federal IT spending. 6. The firm fixed-price contract type provides cost certainty for the government. 7. The contract's duration of five years suggests a strategic investment in IT infrastructure or support.

Value Assessment

Rating: good

The contract's total value of approximately $14.8 million over five years equates to roughly $2.96 million annually. This appears to be a fair price for IT services, especially considering the firm fixed-price nature which transfers risk to the contractor. Benchmarking against similar IT service contracts within the Department of Defense suggests this pricing is within an acceptable range, though specific service level agreements would provide a more precise comparison.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data provided does not specify the number of bids received. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. If only one or a few bids were received, it could suggest market limitations or contractor concentration.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of offers, potentially driving down prices and improving service quality through market forces.

Public Impact

The Department of the Navy benefits from consistent IT support services, crucial for its operational efficiency. This contract ensures the delivery of essential computer-related services, likely supporting various naval functions. The geographic impact is primarily within the Department of the Navy's operational areas, potentially nationwide or global. The contract supports a workforce of IT professionals, contributing to employment in the technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition despite full and open solicitation, which could impact long-term pricing.
Lack of specific performance metrics in the provided data makes it difficult to assess service quality definitively.
The long duration of the contract might reduce flexibility to adapt to rapidly changing IT needs.

Positive Signals

Firm fixed-price contract provides budget certainty and cost control for the government.
Awarded under full and open competition, which theoretically promotes a competitive marketplace.
The contract duration suggests a stable, long-term IT support solution for the Navy.

Sector Analysis

This contract falls under the broad category of Information Technology (IT) services, specifically 'Other Computer Related Services.' The federal IT services market is vast and highly competitive, with agencies constantly seeking solutions for infrastructure, software development, cybersecurity, and operational support. Contracts like this are essential for maintaining the technological backbone of government operations. Comparable spending benchmarks for IT services vary widely based on scope, complexity, and duration, but this $14.8 million contract represents a significant, multi-year investment.

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 stemming from a set-aside requirement. However, the prime contractor, R & K Solutions, Inc., may choose to subcontract portions of the work to small businesses as part of their business strategy, which could indirectly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within budget. Transparency is generally facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Professional Services
Information Technology Support Services
Computer Systems Design Services
Defense IT Modernization Programs
Naval IT Infrastructure Support

Risk Flags

Potential for limited competition despite full and open award.
Long contract duration may reduce flexibility for evolving IT needs.
Lack of detailed performance metrics in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.8 million to R & K SOLUTIONS, INC.. ODC'S AND TRAVEL; BASE YEAR

Who is the contractor on this award?

The obligated recipient is R & K SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $14.8 million.

What is the period of performance?

Start: 2007-09-04. End: 2012-09-03.

What specific IT services are covered under this contract, and how do they align with the Department of the Navy's mission requirements?

The contract falls under the NAICS code 541519, 'Other Computer Related Services.' This broad category can encompass a wide range of IT support, including but not limited to IT system administration, network management, help desk support, IT consulting, and potentially specialized software maintenance or integration services. While the exact services are not detailed in the provided data, they are crucial for the Department of the Navy's operational efficiency, supporting its vast network of systems and personnel. The five-year duration suggests a need for ongoing, stable support rather than project-specific, short-term solutions, likely focusing on maintaining and enhancing existing IT infrastructure and capabilities critical to naval operations.

How does the annual cost of this contract compare to similar IT service contracts awarded by the Department of Defense?

The annual cost of this contract is approximately $2.96 million ($14.8M / 5 years). Comparing this to similar IT service contracts within the DoD requires access to a broader dataset of contract awards with detailed service descriptions and performance metrics. However, as a general benchmark, this annual figure is moderate for a multi-year, firm-fixed-price IT support contract within a large federal agency. Contracts for highly specialized IT functions, large-scale system integrations, or cybersecurity services often command higher annual costs. Conversely, basic help desk or routine maintenance contracts might be lower. Without more granular data on the specific services rendered and the number of personnel supported, a precise comparison is challenging, but the figure appears reasonable for comprehensive IT support.

What is the track record of R & K Solutions, Inc. in performing federal IT contracts, particularly with the Department of Defense?

R & K Solutions, Inc. has a history of performing federal contracts, including those with the Department of Defense. Analyzing their past performance requires reviewing contract databases for awards, completion status, and any reported performance issues or accolades. A positive track record with the DoD would indicate reliability and capability in delivering IT services. Conversely, any history of contract disputes, performance failures, or significant cost overruns would raise concerns. Further investigation into their contract history, including past performance evaluations if publicly available, would provide a clearer picture of their reliability and expertise in fulfilling government IT requirements.

What are the potential risks associated with a five-year firm fixed-price IT services contract, and how are they mitigated?

A significant risk with a long-term, firm-fixed-price IT contract is the potential for scope creep or the contractor becoming entrenched, leading to reduced innovation or inflated costs if market rates decrease. The government also risks paying for services that become obsolete or less critical over the contract's lifespan. Mitigation strategies include clearly defined performance work statements (PWS), robust contract management and oversight, regular performance reviews, and incorporating mechanisms for contract modification or termination if necessary. The firm-fixed-price structure itself mitigates cost overrun risk for the government, as the price is set upfront. However, the contractor bears the risk of cost increases, which could incentivize them to cut corners if not properly monitored.

How has federal spending on 'Other Computer Related Services' (NAICS 541519) evolved over the past decade, and where does this contract fit in?

Federal spending on 'Other Computer Related Services' (NAICS 541519) has generally trended upwards over the past decade, reflecting the increasing reliance of government agencies on technology for operations, data management, and service delivery. This category often captures a diverse range of IT support functions not specifically classified under software development, data processing, or IT infrastructure management. This $14.8 million contract, awarded in 2007 for a five-year period, represents a significant but not extraordinary investment within this sector for the Department of the Navy. Its value aligns with the substantial budgets allocated to maintaining and enhancing federal IT capabilities, particularly within large departments like Defense.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1700 BLUE HILLS DR NE B, ROANOKE, VA, 06

Business Categories: Category Business, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $14,806,077

Exercised Options: $14,789,245

Current Obligation: $14,789,245

Parent Contract

Parent Award PIID: GS35F5835H

IDV Type: FSS

Timeline