DoD's $14.9M Data Mining Contract with HNC Software LLC Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $14,891,500 ($14.9M)
Contractor: HNC Software LLC
Awarding Agency: Department of Defense
Start Date: 2008-06-28
End Date: 2013-10-15
Contract Duration: 1,935 days
Daily Burn Rate: $7.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 10
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: DEVELOPMENT, TESTING, AND FIELDING OF DATA MINING AND RISK ASSESSMENT CAPABILITY
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22331
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $14.9 million to HNC SOFTWARE LLC for work described as: DEVELOPMENT, TESTING, AND FIELDING OF DATA MINING AND RISK ASSESSMENT CAPABILITY Key points: 1. The contract awarded to HNC Software LLC for data mining capabilities appears to be a sole-source award, limiting competitive pricing. 2. The use of a Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns, potentially impacting overall value. 3. The lack of small business participation is noted, suggesting limited opportunities for smaller innovative firms. 4. The sector is custom computer programming services, a critical area for defense modernization.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of clear performance metrics or benchmarks, makes assessing value difficult. The $14.9 million total award without a clear per-unit cost makes direct comparison challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which strongly suggests a sole-source justification. This limited competition likely resulted in higher prices than could have been achieved through a broader solicitation.
Taxpayer Impact: Taxpayer funds may have been spent inefficiently due to the lack of competitive pressure on pricing and the CPFF contract type.
Public Impact
The Department of Defense is investing significant funds in data mining capabilities, crucial for intelligence and operational analysis. The contract's duration and cost raise questions about the long-term effectiveness and efficiency of the acquired data mining solution. The absence of small business involvement limits the potential for diverse technological solutions and economic impact.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- No small business participation
Positive Signals
- Development of critical data mining capabilities
- Contract awarded to a specific software company
Sector Analysis
This contract falls within the custom computer programming services sector, which is vital for developing specialized software solutions for government agencies. Benchmarks for similar data mining capabilities are difficult to ascertain without more specific details on the scope of work.
Small Business Impact
The contract explicitly states no small business participation (sb: false). This indicates that opportunities for small businesses to contribute to or benefit from this significant defense contract were not pursued or were deemed unsuitable.
Oversight & Accountability
The contract's oversight and accountability mechanisms are not detailed in the provided data. The CPFF structure necessitates robust oversight to control costs and ensure performance, which is not evident here.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for inflated costs due to CPFF structure
- Lack of competitive bidding may have increased price
- Limited transparency on specific capabilities developed
- No small business participation
Tags
custom-computer-programming-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.9 million to HNC SOFTWARE LLC. DEVELOPMENT, TESTING, AND FIELDING OF DATA MINING AND RISK ASSESSMENT CAPABILITY
Who is the contractor on this award?
The obligated recipient is HNC SOFTWARE 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 $14.9 million.
What is the period of performance?
Start: 2008-06-28. End: 2013-10-15.
What specific data mining and risk assessment capabilities were developed, and how do they align with current defense needs?
The provided data lacks specifics on the developed capabilities. A detailed review of contract deliverables and performance reports would be necessary to assess their alignment with current defense needs. Without this, it's difficult to determine if the $14.9 million investment yielded truly impactful and relevant tools for the Department of Defense.
What was the justification for excluding other sources, and could a competitive process have yielded better pricing or innovation?
The justification for excluding other sources is critical for understanding the sole-source award. Typically, such exclusions are based on proprietary technology or unique capabilities. However, a competitive process often drives innovation and cost savings, suggesting that excluding other sources may have led to a higher price and potentially missed opportunities for more advanced or cost-effective solutions.
How effectively has the CPFF contract type managed costs and ensured the delivery of the intended data mining capabilities?
Cost Plus Fixed Fee contracts carry inherent risks of cost escalation as the contractor is reimbursed for costs plus a fixed fee. Effective management requires stringent oversight, clear performance metrics, and regular audits to control spending. Without detailed performance and cost data, it's challenging to assess the effectiveness of cost management and the ultimate value delivered for the $14.9 million.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0014006R0026
Offers Received: 10
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fair Isaac Corporation (UEI: 074664715)
Address: 3661 VALLEY CENTRE DR, SAN DIEGO, CA, 92130
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $15,511,242
Exercised Options: $14,891,500
Current Obligation: $14,891,500
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-06-28
Current End Date: 2013-10-15
Potential End Date: 2013-10-15 00:00:00
Last Modified: 2021-06-25
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