DoD's $125.7M ERP Tech Refresh contract awarded to Advantaged Solutions, LLC, faces scrutiny over value and competition

Contract Overview

Contract Amount: $125,734,461 ($125.7M)

Contractor: Advantaged Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2021-02-19

End Date: 2023-02-18

Contract Duration: 729 days

Daily Burn Rate: $172.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ERP TECH REFRESH (FOLLOW-ON)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20019

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $125.7 million to ADVANTAGED SOLUTIONS, LLC for work described as: ERP TECH REFRESH (FOLLOW-ON) Key points: 1. The contract's value of over $125 million raises questions about cost-effectiveness for an ERP technology refresh. 2. Full and open competition was utilized, but the number of bidders and their specific qualifications are not detailed, impacting price discovery assessment. 3. The fixed-firm price contract type suggests a defined scope, but potential for cost overruns or scope creep remains a risk. 4. Performance context is limited without specific metrics on system uptime, user satisfaction, or successful data migration. 5. The contract falls within the IT sector, specifically software publishers, for enterprise resource planning systems. 6. The lack of small business set-aside indicates a focus on larger prime contractors, with subcontracting implications needing further review.

Value Assessment

Rating: fair

Benchmarking the value of this $125.7 million ERP technology refresh is challenging without detailed cost breakdowns or comparable contract data. While a firm-fixed-price contract aims to control costs, the overall expenditure warrants scrutiny to ensure it aligns with industry standards for similar system upgrades. The absence of specific performance metrics makes it difficult to definitively assess the value delivered relative to the investment. Further analysis of the contractor's pricing structure and historical performance on similar projects would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows all responsible sources to compete. However, the provided data does not specify the number of bids received or the extent of the competitive landscape. A robust competition typically involves multiple qualified bidders submitting proposals, driving down prices and ensuring best value. The limited information on the bidding process makes it difficult to ascertain if the competition was truly vigorous and resulted in optimal price discovery for the government.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it promotes a competitive environment that can lead to lower prices and better service offerings. However, the effectiveness of this competition hinges on the number and quality of bids received, which are not detailed here.

Public Impact

The Department of the Navy benefits from an updated Enterprise Resource Planning (ERP) system, crucial for its operational efficiency. This contract supports the delivery of essential software and potentially related services for managing the Navy's resources. The geographic impact is primarily within the District of Columbia, where the contract is registered, but the system's use is likely nationwide for the Navy. Workforce implications may include training for Navy personnel on the new ERP system and potential roles for IT professionals supporting its implementation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the true value for money.
The specific number of bidders and their qualifications are not provided, raising questions about the robustness of the competition.
Potential for scope creep or unforeseen technical challenges in an ERP refresh, despite a fixed-price contract.
Limited information on how the contractor's pricing compares to market rates for similar ERP refresh projects.
The contract duration of 729 days (2 years) might be insufficient for a comprehensive ERP refresh, potentially leading to follow-on contracts or extensions.

Positive Signals

Awarded under full and open competition, suggesting an effort to maximize the pool of potential offerors.
Firm-fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract is a follow-on, implying a degree of familiarity with the system and contractor's capabilities.
The contractor, Advantaged Solutions, LLC, is identified, allowing for track record analysis.
The contract is for an ERP technology refresh, indicating an investment in modernizing critical IT infrastructure.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software publishers and enterprise resource planning (ERP) systems. The ERP market is a significant segment of the IT industry, with substantial government spending dedicated to maintaining and upgrading these complex systems. Government ERP contracts often involve large dollar values due to the critical nature of these systems for managing finances, human resources, and logistics. Comparable spending benchmarks would involve analyzing other large-scale ERP implementations across federal agencies, considering factors like system complexity, user base, and the scope of services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). This suggests that the primary award went to a large business or that the nature of the requirement did not lend itself to a small business set-aside. Consequently, the impact on the small business ecosystem would likely be through subcontracting opportunities, if any are mandated or pursued by the prime contractor. Without specific subcontracting plans or goals, it's difficult to assess the extent to which small businesses will benefit from this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency could be enhanced by making detailed performance reports and cost justifications publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected related to the contract's execution.

Related Government Programs

Defense Enterprise Systems
Navy ERP Systems
IT Modernization Programs
Software Licensing and Maintenance
Enterprise Resource Planning Software

Risk Flags

Value for Money Concerns
Competition Transparency
Performance Metrics Unclear
Potential for Technical Debt

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $125.7 million to ADVANTAGED SOLUTIONS, LLC. ERP TECH REFRESH (FOLLOW-ON)

Who is the contractor on this award?

The obligated recipient is ADVANTAGED SOLUTIONS, 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 $125.7 million.

What is the period of performance?

Start: 2021-02-19. End: 2023-02-18.

What is the track record of Advantaged Solutions, LLC on similar large-scale ERP implementation or refresh contracts with the federal government?

Assessing the track record of Advantaged Solutions, LLC on similar ERP projects is crucial for understanding their capability and reliability. While this contract is for an ERP Tech Refresh, information regarding their past performance on full ERP implementations, system integrations, or significant upgrades would provide valuable context. Specifically, reviewing past contract performance evaluations (e.g., CPARS reports), project completion timelines, budget adherence, and client satisfaction on comparable federal contracts would offer insights into their expertise. Without this specific data, it is difficult to definitively gauge their suitability and past success in managing complex ERP initiatives of this magnitude.

How does the $125.7 million contract value compare to industry benchmarks for ERP technology refreshes of similar scope and complexity?

Comparing the $125.7 million contract value to industry benchmarks for ERP technology refreshes requires detailed information about the specific scope of work, the size and complexity of the ERP system being refreshed, the number of users, and the specific technologies involved. ERP refreshes can range significantly in cost depending on whether they involve minor updates, module replacements, or a complete overhaul of the underlying architecture. Without these specifics, a direct comparison is difficult. However, for large federal agencies, ERP modernization projects often run into tens or hundreds of millions of dollars over their lifecycle. To provide a more precise benchmark, one would need to analyze data from similar-sized government or large enterprise ERP refresh projects, considering factors like the vendor, the modules implemented, and the duration of the project.

What are the key performance indicators (KPIs) used to measure the success of this ERP technology refresh, and what are the current performance levels?

The provided data does not specify the key performance indicators (KPIs) established for this ERP technology refresh contract. Typically, successful ERP system refreshes are measured by metrics such as system uptime and availability, data accuracy and integrity, processing speed, user satisfaction, successful integration with other systems, and the achievement of specific business process improvements. Without access to the contract's Statement of Work (SOW) or performance work statement (PWS), it is impossible to determine the agreed-upon KPIs or to assess the current performance levels against these metrics. This lack of transparency regarding performance measurement makes it challenging to evaluate the effectiveness and value delivered by the contract.

What is the potential risk associated with the 'follow-on' nature of this contract, and how is it being mitigated?

The 'follow-on' nature of this contract suggests it builds upon a previous effort, which can offer benefits like reduced learning curves and established working relationships. However, risks can include vendor lock-in, potential complacency, and the possibility that the previous solution had inherent limitations that are now being perpetuated. Mitigation strategies typically involve rigorous re-evaluation of requirements, ensuring continued competitive pressure where possible, and establishing clear performance expectations and oversight mechanisms. For this specific contract, understanding the scope of the 'refresh' versus a complete replacement is key. If it's a true refresh, the risk might be lower, but if it's an incremental upgrade of a potentially outdated system, the long-term risks could be higher. The government should ensure that the refresh truly modernizes the system and doesn't just extend the life of legacy technology.

Given the $125.7 million expenditure, what specific improvements or efficiencies are expected to be realized by the Department of the Navy through this ERP technology refresh?

The expected improvements and efficiencies from this $125.7 million ERP technology refresh for the Department of the Navy are not explicitly detailed in the provided data. Generally, ERP refreshes aim to enhance operational efficiency, improve data management and accessibility, streamline business processes (such as financial management, supply chain, and human resources), enhance cybersecurity posture, and ensure compliance with evolving technological standards and regulations. Specific expected outcomes might include faster reporting capabilities, reduced manual data entry, better resource allocation, and improved decision-making through more accurate and timely data. Without a clear statement of objectives or expected benefits tied to the contract's scope, it is difficult to quantify the precise return on investment for the Navy.

What is the historical spending trend for ERP systems within the Department of the Navy, and how does this contract fit into that pattern?

Analyzing the historical spending trend for ERP systems within the Department of the Navy is essential to contextualize this $125.7 million contract. Federal agencies, particularly large ones like the Navy, often have multi-year, multi-billion dollar investments in their core ERP systems due to their complexity and critical function. This contract, described as a 'Tech Refresh (Follow-On)', suggests it is part of an ongoing lifecycle management strategy for an existing ERP system. Understanding previous expenditures on this specific system or similar ERP initiatives within the Navy would reveal whether this $125.7 million award represents a typical refresh cost, an increase, or a decrease compared to prior investments. It helps determine if spending is escalating, stable, or being optimized over time.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003921Q5001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4810 JAY ST NE, WASHINGTON, DC, 20019

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $322,058,406

Exercised Options: $125,941,066

Current Obligation: $125,734,461

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0926R

IDV Type: FSS

Timeline