DoD's $30.6M IT Support Services Contract with Strategic Data Systems Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $30,634,084 ($30.6M)

Contractor: Strategic Data Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-03

End Date: 2023-07-02

Contract Duration: 2,190 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 27

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF IT SUPPORT SERVICES (ITSS) NSWC - CARDEROCK DIVISION

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92108

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.6 million to STRATEGIC DATA SYSTEMS, INC. for work described as: IGF::OT::IGF IT SUPPORT SERVICES (ITSS) NSWC - CARDEROCK DIVISION Key points: 1. The contract awarded to Strategic Data Systems, Inc. for IT Support Services at NSWC Carderock Division represents a significant investment. 2. While awarded under full and open competition, the specific value and cost-plus-fixed-fee structure warrant further examination for cost-effectiveness. 3. The lack of small business participation is a notable concern, potentially limiting broader economic impact. 4. The engineering services sector is critical for defense, but contract specifics should ensure optimal value for taxpayer dollars.

Value Assessment

Rating: fair

The $30.6M contract value for IT Support Services is substantial. The Cost Plus Fixed Fee (CPFF) pricing structure can lead to cost overruns if not managed tightly, raising questions about overall value compared to fixed-price contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded under full and open competition, this method aims for the best value. However, the CPFF structure might not incentivize the most aggressive cost-saving measures from the contractor, potentially impacting the final price discovery.

Taxpayer Impact: The significant contract value means taxpayer funds are being utilized. Ensuring competitive pricing and efficient service delivery is crucial to maximize the return on this investment.

Public Impact

Taxpayers are funding critical IT support services for a key naval facility. The contract's duration and value suggest a long-term reliance on the awarded vendor. The absence of small business involvement may limit opportunities for smaller, innovative firms in the defense IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-Plus-Fixed-Fee structure
No small business participation
Long contract duration (2190 days)

Positive Signals

Awarded under full and open competition
Supports critical defense operations

Sector Analysis

This contract falls within the Engineering Services sector, specifically IT support for a naval command. Spending benchmarks in this area vary widely based on scope, but large, multi-year contracts like this require careful oversight to ensure they align with industry standards and deliver necessary capabilities efficiently.

Small Business Impact

The contract explicitly states no small business participation (sb: false). This indicates that the prime contractor is a large business, and opportunities for subcontracting to small businesses were either not pursued or not mandated, potentially missing out on innovation and economic benefits.

Oversight & Accountability

The contract's long duration and CPFF structure necessitate robust oversight from the Department of the Navy to monitor costs, performance, and ensure adherence to contract terms. Regular audits and performance reviews are essential for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Lack of small business participation
Long contract duration may reduce flexibility
Limited transparency on specific service costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.6 million to STRATEGIC DATA SYSTEMS, INC.. IGF::OT::IGF IT SUPPORT SERVICES (ITSS) NSWC - CARDEROCK DIVISION

Who is the contractor on this award?

The obligated recipient is STRATEGIC DATA SYSTEMS, 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 $30.6 million.

What is the period of performance?

Start: 2017-07-03. End: 2023-07-02.

What specific IT support services are included in this contract, and how do their costs compare to industry benchmarks for similar services?

The contract data indicates 'IT SUPPORT SERVICES (ITSS)' but lacks granular detail on specific services. The Cost Plus Fixed Fee structure makes direct cost comparison difficult without detailed breakdowns. Benchmarking would require analyzing the labor categories, hours, and overhead rates against market data for comparable defense IT support contracts to assess if the fixed fee adequately compensates the contractor for managing costs effectively.

Given the Cost Plus Fixed Fee structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure the government receives the best possible value?

The Cost Plus Fixed Fee (CPFF) structure inherently carries a risk of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Effective oversight involves rigorous monitoring of incurred costs, regular audits, and performance reviews to ensure the contractor is operating efficiently and within the spirit of the contract. The fixed fee itself acts as a ceiling on profit, but the government bears the primary cost risk.

How does the lack of small business participation impact the overall effectiveness and innovation potential of this IT support contract?

The absence of small business participation (sb: false) means that the contract is solely with a large business. This can limit the infusion of innovative solutions often brought by smaller, agile companies. While large businesses can offer scale and established processes, relying solely on them might reduce competitive pressure and potentially lead to less dynamic service delivery or higher costs over the contract's lifespan.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002416R3125

Offers Received: 27

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2020 CAMINO DEL RIO N STE 505, SAN DIEGO, CA, 92108

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

Financial Breakdown

Contract Ceiling: $31,233,160

Exercised Options: $31,233,160

Current Obligation: $30,634,084

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7939

IDV Type: IDC

Timeline