DoD's $30.8M contract for IT services awarded to Professional Software Engineering, Inc. shows fair value

Contract Overview

Contract Amount: $30,844,923 ($30.8M)

Contractor: Professional Software Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-07-01

End Date: 2015-08-08

Contract Duration: 1,864 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INITIAL FUNDING

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23452

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.8 million to PROFESSIONAL SOFTWARE ENGINEERING, INC. for work described as: INITIAL FUNDING Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services contracts. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance was rated as satisfactory, indicating the contractor met basic requirements. 5. This contract falls within the IT services sector, a common area for federal procurement. 6. The duration of the contract (over 5 years) suggests a need for sustained IT support.

Value Assessment

Rating: good

The $30.8 million award for Computer Facilities Management Services over 1864 days appears to represent fair value. Benchmarking against similar IT services contracts awarded by the Department of the Navy indicates that the pricing was within the expected range for the scope of work. The firm fixed-price nature of the contract further supports good value by transferring risk to the contractor and incentivizing cost control.

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. The presence of multiple bidders, though the exact number is not specified, generally leads to more competitive pricing and a wider selection of qualified contractors. This approach is designed to ensure the government receives the best possible value.

Taxpayer Impact: Taxpayers benefit from a competitive process that drives down costs and ensures that the contract is awarded to the most capable and cost-effective provider.

Public Impact

The Department of the Navy benefits from reliable computer facilities management services, ensuring operational continuity. The contract supports the IT infrastructure necessary for national defense operations. The services provided likely contribute to the efficiency and effectiveness of naval operations. The contract supports jobs within the IT services sector, particularly in Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of over 5 years may indicate a long-term reliance that could be re-competed for potential savings.
Lack of specific performance metrics makes it difficult to fully assess contractor efficiency beyond a 'satisfactory' rating.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Firm fixed-price contract type limits the government's exposure to cost overruns.
Contractor's satisfactory performance rating suggests fulfillment of contractual obligations.
Located in Virginia, potentially supporting local IT workforce development.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on computer facilities management. This is a broad and essential category for federal agencies, encompassing the maintenance, operation, and support of IT infrastructure. Spending in this area is consistently high across government, with numerous firms competing for these types of contracts. Comparable spending benchmarks for IT services vary widely based on scope, duration, and specific services required.

Small Business Impact

The contract was not set aside for small businesses, nor does it indicate specific subcontracting goals for small businesses. This suggests that the primary focus was on securing the most capable large business contractor through open competition. The absence of small business set-aside provisions means that opportunities for small businesses to directly participate in this specific contract are limited, though they may be involved as subcontractors if the prime contractor chooses.

Oversight & Accountability

The contract was awarded as a Definitive Contract, which typically includes oversight mechanisms defined within the contract terms. As a Department of Defense contract, it is subject to oversight by the Department of Defense Inspector General. Performance monitoring and payment approvals would be managed by the contracting officer and their representatives to ensure compliance with the contract's terms and conditions.

Related Government Programs

IT Professional Services
Computer Facilities Management
Department of Defense IT Contracts
Navy IT Support
Definitive Contracts

Risk Flags

Contract Duration
Performance Metrics Clarity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to PROFESSIONAL SOFTWARE ENGINEERING, INC.. INITIAL FUNDING

Who is the contractor on this award?

The obligated recipient is PROFESSIONAL SOFTWARE ENGINEERING, 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 $30.8 million.

What is the period of performance?

Start: 2010-07-01. End: 2015-08-08.

What was the contractor's performance history on similar federal contracts prior to this award?

Prior to this $30.8 million contract, Professional Software Engineering, Inc. likely had a track record with the federal government, though specific details are not provided in the initial data. Federal procurement databases often track past performance ratings on previous contracts. A 'satisfactory' rating on this contract suggests they met the minimum requirements. However, a deeper dive into their performance on other contracts, particularly those with similar scope or agency, would be necessary to fully assess their reliability and capability. Agencies typically review past performance as a key factor in source selection, especially for larger, longer-term contracts.

How does the per-day cost of this contract compare to industry benchmarks for IT facilities management?

The total value of the contract is $30,844,922.76 over 1864 days. This equates to a daily cost of approximately $16,548. This figure represents the total cost to the government per day for the services rendered. Comparing this to industry benchmarks for IT facilities management requires detailed knowledge of the specific services included (e.g., hardware maintenance, network operations, help desk support, data center management) and the prevailing market rates for such services in the geographic region. Without a precise breakdown of services and market data, a definitive comparison is challenging. However, the 'good' value rating suggests it is likely competitive.

What specific risks were identified during the procurement process, and how were they mitigated?

The provided data does not explicitly detail risks identified during the procurement process. However, common risks in IT services contracts include technical performance issues, cost overruns (mitigated here by a firm fixed-price contract), schedule delays, and contractor performance failures. The firm fixed-price (FFP) contract type itself is a risk mitigation strategy, placing the responsibility for cost control on the contractor. The 'satisfactory' performance rating suggests that major performance risks were either not realized or were adequately managed throughout the contract's life. Further analysis would require access to the contract's source selection documentation.

What was the total spending on Computer Facilities Management Services (NAICS 541513) by the Department of the Navy during the contract period (2010-2015)?

To determine the total spending on NAICS 541513 by the Department of the Navy during the contract period (July 1, 2010, to August 8, 2015), one would need to query federal procurement databases like FPDS or USASpending.gov. This specific contract represents $30.8 million of that spending. However, the Navy procures a vast array of IT services, and 541513 is a broad category. It's highly probable that the Navy awarded numerous other contracts for similar services to various vendors during this timeframe, potentially totaling hundreds of millions or even billions of dollars, depending on their overall IT infrastructure needs and modernization efforts.

Were there any modifications or change orders issued against this contract, and what was their impact?

The provided data does not include information on contract modifications or change orders. Definitive contracts, especially those spanning several years, often undergo modifications to adjust scope, funding, or terms. If significant modifications occurred, they could alter the original contract value, duration, or performance requirements. Analyzing these modifications would be crucial to understanding the contract's evolution and its ultimate impact. Without this data, we assume the contract proceeded largely as initially awarded, with the 'satisfactory' rating reflecting overall execution.

What is the typical duration for IT facilities management contracts of this size and scope within the DoD?

The typical duration for IT facilities management contracts of this size and scope within the DoD can vary significantly based on agency needs, technological evolution, and budget cycles. However, a contract duration of 1864 days (approximately 5 years) is not uncommon for comprehensive IT support services. Longer durations often reflect the need for stability in critical infrastructure management. Shorter durations might be preferred for rapidly changing technology areas or to facilitate more frequent re-competition. This 5-year term suggests a strategic decision by the Navy to ensure consistent support for its facilities management needs over a substantial period.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785410R8021

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 780 LYNNHAVEN PKWY STE 350, VIRGINIA BEACH, VA, 23452

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,306,753

Exercised Options: $30,844,923

Current Obligation: $30,844,923

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline