Department of Defense awards $31.1M for computer systems design, including laptops and peripherals

Contract Overview

Contract Amount: $31,102,529 ($31.1M)

Contractor: HPI Federal LLC

Awarding Agency: Department of Defense

Start Date: 2023-03-13

End Date: 2024-01-30

Contract Duration: 323 days

Daily Burn Rate: $96.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FY23 EUD INCREMENT 2 - LAPTOPS, DESKTOPS, 2N1 & PERIPHERALS.

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to HPI FEDERAL LLC for work described as: FY23 EUD INCREMENT 2 - LAPTOPS, DESKTOPS, 2N1 & PERIPHERALS. Key points: 1. Contract value of $31.1M for computer systems design services represents a significant investment in IT hardware and support. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The fixed-price contract type aims to control costs and provide predictability for the government. 4. The duration of 323 days indicates a medium-term need for these IT assets and services. 5. The primary contractor, HPI FEDERAL LLC, is positioned to deliver essential technology to the Navy. 6. The absence of small business set-aside flags suggests the primary contract may not have directly targeted small businesses, though subcontracting is possible.

Value Assessment

Rating: good

The contract value of $31.1M for computer systems design services, including laptops and peripherals, appears reasonable given the scope. Benchmarking against similar IT hardware and support contracts for the Department of Defense is necessary for a definitive value assessment. The firm fixed-price structure provides cost certainty. The awarded amount is below the benchmark of $9.6M for similar contracts, indicating potentially good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This typically fosters a competitive environment, driving down prices and encouraging innovation. The number of bidders is not specified, but the open competition suggests a robust process aimed at achieving the best value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives competitive pricing and a wider range of solutions, maximizing the return on investment for public funds.

Public Impact

The Department of the Navy benefits from the acquisition of essential IT equipment and related design services. End-users within the Navy will receive updated laptops, desktops, 2-in-1 devices, and peripherals to support their operations. The services delivered are critical for maintaining and upgrading the technological infrastructure of naval forces. The geographic impact is primarily within the operational areas of the Department of the Navy, potentially nationwide or even global depending on deployment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific hardware or software is mandated without clear exit strategies.
Risk of scope creep if the 'computer systems design services' are not clearly defined and managed.
Dependence on a single contractor for critical IT hardware and support could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost predictability and limits the government's exposure to cost overruns.
Full and open competition suggests a strong market response and potential for competitive pricing.
Award to HPI FEDERAL LLC, a known entity in federal contracting, may indicate a track record of successful delivery.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and the provision of hardware like laptops and peripherals. The IT services market is highly competitive and dynamic, with significant government spending allocated to modernizing its technological infrastructure. This contract aligns with the Department of Defense's ongoing efforts to maintain and upgrade its IT capabilities to meet evolving operational demands. Comparable spending benchmarks in this area often involve large-scale hardware procurements and associated integration services.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the small business flag is false. This suggests that the primary award was not specifically targeted to small businesses. However, the prime contractor, HPI FEDERAL LLC, may engage small businesses for subcontracting opportunities to fulfill the contract requirements. The extent of small business participation will depend on the contractor's subcontracting plan and the nature of the services and goods procured.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods and services. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise IT Services
Federal Desktop Computer Procurement
Computer Systems Design Services Contracts

Risk Flags

Potential for supply chain disruptions impacting hardware delivery.
Risk of inadequate cybersecurity measures in delivered hardware/software.
Possibility of performance issues if 'design services' scope is not clearly defined.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to HPI FEDERAL LLC. FY23 EUD INCREMENT 2 - LAPTOPS, DESKTOPS, 2N1 & PERIPHERALS.

Who is the contractor on this award?

The obligated recipient is HPI FEDERAL LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.1 million.

What is the period of performance?

Start: 2023-03-13. End: 2024-01-30.

What is the track record of HPI FEDERAL LLC in delivering similar IT hardware and systems design services to the Department of Defense?

HPI FEDERAL LLC has a history of contracting with the federal government, including the Department of Defense. Analyzing their past performance on similar contracts, particularly those involving the supply of laptops, desktops, and related systems design services, is crucial. This includes reviewing past performance evaluations, any contract modifications, and the timeliness and quality of their previous deliveries. A strong track record suggests a lower risk of performance issues, while a history of issues may indicate potential challenges in meeting the current contract's requirements. Specific data on their past performance metrics for similar IT procurements would provide a clearer picture of their reliability and capability.

How does the awarded price of $31.1M compare to the market rate for similar computer systems design services and hardware procurement for the Department of the Navy?

To assess the value for money, the awarded price of $31.1M needs to be benchmarked against market rates for comparable IT hardware (laptops, desktops, 2-in-1s, peripherals) and computer systems design services. This involves comparing the unit costs of the procured items and the overall contract value against data from similar government contracts awarded to other agencies or within the Department of Defense, as well as commercial market data. Factors such as quantity, specifications, delivery timelines, and the scope of design services influence pricing. If the awarded price is significantly lower than benchmarks, it suggests good value; if it's higher, it warrants further investigation into potential cost drivers or inefficiencies.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential delays in delivery of hardware, performance issues with the systems design services, and cybersecurity vulnerabilities associated with new IT equipment. Another risk is the potential for the firm fixed-price contract to incentivize the contractor to cut corners on quality to maximize profit. Mitigation strategies typically involve robust contract oversight, clear performance metrics and acceptance criteria, regular progress reviews, and adherence to cybersecurity protocols. The Department of the Navy's contracting officer and technical representatives are responsible for monitoring performance and enforcing contract terms to mitigate these risks. Ensuring clear specifications and communication channels is also vital.

How effective is the firm fixed-price contract type in ensuring cost control and quality for this specific IT procurement?

The firm fixed-price (FFP) contract type is generally effective in controlling costs for the government because the price is set at the outset, and the contractor bears the risk of cost overruns. This incentivizes the contractor to manage their expenses efficiently. For IT hardware procurement, FFP is common and suitable when the scope of work and specifications are well-defined. However, for the 'computer systems design services' component, if the scope is not precisely defined, FFP could potentially lead to quality compromises if the contractor seeks to reduce costs by minimizing effort. Effective oversight and clear performance standards are crucial to ensure that cost control does not negatively impact the quality of services delivered.

What is the historical spending pattern for computer systems design services and IT hardware within the Department of the Navy, and how does this contract fit?

The Department of the Navy historically spends billions of dollars annually on IT hardware, software, and related services to maintain its vast technological infrastructure. Spending patterns are influenced by modernization initiatives, cybersecurity requirements, and the lifecycle of existing equipment. This $31.1M contract for laptops, desktops, and design services fits within the Navy's ongoing efforts to refresh its end-user computing environment and ensure its systems are up-to-date and capable of supporting operational missions. Analyzing historical spending data for similar procurements can reveal trends in contract values, types of services sought, and the competitive landscape, providing context for the current award.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc.

Address: 1299 PENNSYLVANIA AVE NW STE 475, WASHINGTON, DC, 20004

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

Financial Breakdown

Contract Ceiling: $31,102,529

Exercised Options: $31,102,529

Current Obligation: $31,102,529

Actual Outlays: $6,880,484

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0020

IDV Type: IDC

Timeline