DoD Spends $42.3M on Computer Systems Design, Lacking Competition
Contract Overview
Contract Amount: $42,360,801 ($42.4M)
Contractor: Assurance Technology Corp
Awarding Agency: Department of Defense
Start Date: 2019-09-30
End Date: 2024-09-29
Contract Duration: 1,826 days
Daily Burn Rate: $23.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SOFTWARE DEFINABLE/RECONFIGURABLE SYSTEMS
Place of Performance
Location: CARLISLE, MIDDLESEX County, MASSACHUSETTS, 01741
Plain-Language Summary
Department of Defense obligated $42.4 million to ASSURANCE TECHNOLOGY CORP for work described as: SOFTWARE DEFINABLE/RECONFIGURABLE SYSTEMS Key points: 1. Significant contract value of $42.3M for computer systems design. 2. Sole-source award to Assurance Technology Corp indicates limited competition. 3. Potential for higher costs due to lack of competitive bidding. 4. The IT sector sees substantial investment in complex system design.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, raises concerns about cost efficiency. Benchmarking against similar sole-source contracts for complex system design is difficult without more data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to suboptimal pricing for the government.
Taxpayer Impact: The lack of competition likely results in taxpayers paying more than they would in a competitive environment.
Public Impact
Taxpayers may be overpaying for computer systems design services. Limited visibility into the necessity and cost-effectiveness of the services provided. Potential for reduced innovation due to the absence of market pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of small business participation
Positive Signals
- Long-term contract duration (5 years)
- Specific technical expertise required
Sector Analysis
This contract falls within the Information Technology sector, specifically computer systems design services. Spending in this area is critical for modernizing defense capabilities, but competitive procurement is key to value.
Small Business Impact
The data indicates this contract did not involve small businesses (ss: false, sb: false). This represents a missed opportunity to support small business innovation and economic growth within the IT sector.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received fair value and that competition was appropriately waived.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency
- No small business participation
Tags
computer-systems-design-services, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.4 million to ASSURANCE TECHNOLOGY CORP. SOFTWARE DEFINABLE/RECONFIGURABLE SYSTEMS
Who is the contractor on this award?
The obligated recipient is ASSURANCE TECHNOLOGY CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $42.4 million.
What is the period of performance?
Start: 2019-09-30. End: 2024-09-29.
What specific technical capabilities justify the sole-source award and the cost-plus-fixed-fee structure?
The justification for a sole-source award and a cost-plus-fixed-fee contract typically revolves around highly specialized, unique technical capabilities that only one vendor possesses. This could include proprietary technology, unique expertise in a niche area, or critical national security requirements where the risk of disclosure or disruption outweighs the benefits of competition. Detailed documentation would be required to validate these claims.
How was the 'fair and reasonable' price determined for this sole-source contract?
For sole-source contracts, price reasonableness is often determined through various methods such as comparing the proposed price to historical prices paid for similar services, using independent government cost estimates, or analyzing the contractor's cost and pricing data. Given the cost-plus-fixed-fee structure, the government likely relied on detailed cost proposals and negotiations to establish the fixed fee and estimate costs.
What are the long-term implications of awarding such a significant contract without competition on the broader IT market for defense?
Awarding large, sole-source contracts without competition can stifle innovation and create vendor lock-in, potentially leading to higher costs and reduced agility in the long run. It may discourage other capable firms from investing in developing competing solutions if they perceive limited opportunities. This can reduce the government's access to a diverse range of technological advancements and competitive pricing in the future.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0017319RGF13
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 84 S ST, CARLISLE, MA, 01741
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $56,583,799
Exercised Options: $44,260,644
Current Obligation: $42,360,801
Actual Outlays: $5,115,388
Subaward Activity
Number of Subawards: 533
Total Subaward Amount: $441,722,837
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-09-30
Current End Date: 2024-09-29
Potential End Date: 2024-09-29 00:00:00
Last Modified: 2024-02-15
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