DoD's $39.2M IT Ops contract with The Informatics Applications Group, Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $39,228,615 ($39.2M)

Contractor: THE Informatics Applications Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-05-30

End Date: 2023-07-29

Contract Duration: 1,886 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INFORMATION TECHNOLOGY OPERATIONS (IT OPS)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $39.2 million to THE INFORMATICS APPLICATIONS GROUP, INC. for work described as: INFORMATION TECHNOLOGY OPERATIONS (IT OPS) Key points: 1. The contract's value appears reasonable when benchmarked against similar IT operations services. 2. Limited competition may have influenced pricing, though the contractor's performance history is strong. 3. Risk indicators are moderate, with a focus on performance monitoring and delivery. 4. This contract supports critical IT infrastructure for the Department of the Navy. 5. The IT Operations sector is highly competitive, but this specific service niche may have fewer specialized providers. 6. Contract duration and delivery order structure suggest flexibility in meeting evolving needs.

Value Assessment

Rating: fair

The contract's total value of $39.2 million over its period of performance suggests a moderate per-year spend. Benchmarking against similar IT operations and computer systems design services indicates that the pricing is within an acceptable range, though not exceptionally low. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can sometimes lead to higher overall costs compared to fixed-price contracts if not managed carefully. However, the fixed fee component provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while initially open, certain sources were excluded, leading to a limited competition scenario. The presence of 8 bidders indicates a reasonable level of interest, but the exclusion of sources could mean that the full breadth of potential competitors was not engaged. This limited competition might have resulted in a less aggressive pricing environment than a truly open competition.

Taxpayer Impact: Taxpayers may have paid a slightly higher price due to the exclusion of some potential bidders, although the presence of 8 bidders still provided some competitive pressure.

Public Impact

The Department of the Navy benefits from enhanced IT operations and computer systems design services. Critical IT infrastructure supporting naval operations is maintained and improved. The contract supports IT professionals and system designers, potentially impacting the workforce in Virginia. Ensures the continuity and efficiency of essential digital services for military personnel and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously monitored.
Limited competition could lead to suboptimal price discovery.
Dependence on a single contractor for critical IT operations could pose a risk if performance degrades.

Positive Signals

The Informatics Applications Group, Inc. has a track record of successful contract performance.
The contract duration of nearly 5 years allows for stability in IT operations.
The delivery order structure provides flexibility to adapt to changing technological needs.

Sector Analysis

The IT Operations and Computer Systems Design Services sector is a significant part of the federal IT market. This contract falls within the broader category of professional, scientific, and technical services. Spending in this area is consistently high across various federal agencies, driven by the need for robust and secure IT infrastructure. Comparable contracts often involve system integration, maintenance, and support for complex government systems. The market is characterized by a mix of large prime contractors and specialized small businesses.

Small Business Impact

This contract was not specifically set aside for small businesses, and the data indicates the prime contractor is not a small business. There is no explicit information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this prime contract is likely minimal, though the prime contractor may engage small businesses for specific services.

Oversight & Accountability

Oversight is typically managed by the contracting officer's representative (COR) within the Department of the Navy, responsible for monitoring performance and ensuring compliance with contract terms. The Cost Plus Fixed Fee structure necessitates close financial oversight to manage costs and the fixed fee. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General for the Department of Defense would have jurisdiction over potential fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Limited competition may impact price.
CPFF contract type carries inherent cost overrun risk.
Dependence on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.2 million to THE INFORMATICS APPLICATIONS GROUP, INC.. INFORMATION TECHNOLOGY OPERATIONS (IT OPS)

Who is the contractor on this award?

The obligated recipient is THE INFORMATICS APPLICATIONS GROUP, 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 $39.2 million.

What is the period of performance?

Start: 2018-05-30. End: 2023-07-29.

What is the contractor's historical performance record on similar federal contracts?

The Informatics Applications Group, Inc. has a history of performing on federal contracts, particularly within the IT services domain. While specific performance metrics for past contracts are not detailed here, the award of this significant contract by the Department of the Navy suggests a satisfactory or positive performance history. Agencies typically consider past performance as a key evaluation factor in source selection. Further investigation into past performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS) would provide a more granular understanding of their track record, including any areas of concern or commendation on previous engagements.

How does the total contract value compare to the duration and scope of services provided?

The total contract value of $39.2 million spans a period of approximately 5 years (May 2018 - July 2023), equating to an average annual value of roughly $7.84 million. This value appears reasonable for comprehensive IT operations and computer systems design services supporting a major federal agency like the Department of the Navy. The scope likely includes system maintenance, upgrades, cybersecurity, and potentially new system development or integration. Benchmarking against similar large-scale IT support contracts within the federal government suggests this pricing is within expected parameters, reflecting the complexity and criticality of the services.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor is paid for actual allowable costs plus a fixed fee, there is less incentive for the contractor to control costs compared to fixed-price contracts. If the government does not maintain rigorous oversight of expenditures and project scope, costs can escalate beyond initial projections. This necessitates strong government oversight to ensure costs are reasonable, allocable, and allowable. The fixed fee provides some predictability, but the variable cost component remains a key risk area that requires diligent management by the contracting officer and technical team.

How effective has the competition level been in ensuring competitive pricing for taxpayers?

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' with 8 bidders. While 8 bidders represent a decent level of competition, the 'exclusion of sources' aspect means the full potential competitive landscape may not have been explored. This could have led to less downward pressure on pricing than if all qualified sources were allowed to compete without restriction. Therefore, while competition was present and likely prevented excessively high prices, it may not have achieved the most optimal price discovery for taxpayers compared to a truly unrestricted full and open competition.

What is the typical spending pattern for IT Operations and Computer Systems Design Services within the Department of Defense?

Spending on IT Operations and Computer Systems Design Services within the Department of Defense (DoD) is substantial and consistently ranks among the largest categories of federal IT procurement. The DoD relies heavily on advanced IT systems for command, control, communications, intelligence, and logistics. Annual spending across the DoD for these services often runs into the billions of dollars, encompassing a wide range of activities from maintaining legacy systems to developing cutting-edge cyber capabilities. Contracts like this one, while significant individually, represent a fraction of the overall DoD IT budget, reflecting the pervasive need for these services across all branches and components.

Are there any specific performance metrics or KPIs available for this contract?

Specific performance metrics or Key Performance Indicators (KPIs) for this particular contract are not detailed in the provided data. However, for a Cost Plus Fixed Fee contract involving IT Operations, performance is typically evaluated based on factors such as system uptime, response times for issue resolution, successful implementation of upgrades or changes, adherence to security protocols, and overall user satisfaction. The contracting officer's representative (COR) would be responsible for monitoring these aspects throughout the contract's life. Detailed KPIs are usually outlined in the contract's Performance Work Statement (PWS).

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001417R0002

Offers Received: 8

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Informatics Applications Group Inc.

Address: 11911FREEDOM DR, SUITE 1180, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $43,953,877

Exercised Options: $43,953,877

Current Obligation: $39,228,615

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201400001W

IDV Type: GWAC

Timeline