DoD's $23M contract for service treatment record digitization awarded to ANACOMP, INC. shows potential value concerns

Contract Overview

Contract Amount: $23,182,973 ($23.2M)

Contractor: Anacomp, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-05-01

End Date: 2021-02-28

Contract Duration: 1,764 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF SERVICE TREATMENT RECORD DIGITIZATION,

Place of Performance

Location: GRANITE CITY, MADISON County, ILLINOIS, 62040

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to ANACOMP, INC. for work described as: IGF::OT::IGF SERVICE TREATMENT RECORD DIGITIZATION, Key points: 1. The contract's value appears high relative to its duration and the nature of document preparation services. 2. Limited competition dynamics may have influenced pricing, as the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. 3. The contract's duration of 1764 days (approx. 4.8 years) for document preparation services warrants scrutiny regarding efficiency and cost-effectiveness. 4. Performance context is limited, but the firm fixed-price structure suggests a defined scope of work. 5. This contract falls within the administrative and support services sector, specifically document preparation. 6. The award to a single contractor for a significant duration raises questions about market availability and alternative solutions.

Value Assessment

Rating: questionable

The total award amount of $23,182,973.26 over nearly five years for document preparation services appears substantial. Benchmarking against similar contracts for digitization and document management services is crucial. Without specific per-unit metrics or detailed service descriptions, it's difficult to definitively assess value for money. However, the duration and total cost suggest a need for closer examination of the efficiency and necessity of this expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. The number of bidders is not explicitly stated, but this type of award often suggests a more restricted competition than a truly full and open process. This limited competition could potentially lead to less aggressive pricing and reduced incentive for the contractor to optimize costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the restricted nature of the competition, potentially missing out on more competitive bids from a wider pool of vendors.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will have their service treatment records digitized. The service delivered is document preparation and digitization, crucial for modernizing record-keeping and improving accessibility. The geographic impact is likely nationwide within the Department of Defense, affecting all relevant military branches and personnel. Workforce implications may include the need for specialized personnel to handle the digitization process, potentially impacting both government and contractor workforces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the long duration and limited competition.
Risk of vendor lock-in due to the extended contract period.
Concerns about the efficiency and effectiveness of document preparation services over a multi-year period.
Lack of transparency regarding the specific criteria for excluding sources in the competition.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarding to a single entity may streamline management and oversight.
Digitization of records improves accessibility and long-term preservation.

Sector Analysis

This contract falls within the administrative and support services sector, specifically focusing on document preparation and digitization. The market for these services is competitive, with numerous firms offering solutions for large-scale data management and conversion. The size of this contract, exceeding $23 million, positions it as a significant award within this niche, likely requiring specialized capabilities for handling sensitive government records.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. Given the nature of the service and the award to a single entity, it is unclear if small businesses were involved in the primary contract or as subcontractors. Further investigation would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Navy's contracting officers and potentially the Inspector General's office. Accountability measures would be tied to the firm fixed-price contract terms and performance metrics. Transparency is limited by the available data, particularly concerning the competitive process and specific deliverables.

Related Government Programs

Defense Health Agency Electronic Health Record (EHR) Modernization
Veterans Affairs Digital Health Records
Military Personnel Record Management Systems
Government Document Management Services

Risk Flags

Limited competition raises concerns about price.
Long contract duration may not reflect technological advancements.
Potential for scope creep or misalignment with evolving needs over time.
Lack of detailed performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to ANACOMP, INC.. IGF::OT::IGF SERVICE TREATMENT RECORD DIGITIZATION,

Who is the contractor on this award?

The obligated recipient is ANACOMP, 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 $23.2 million.

What is the period of performance?

Start: 2016-05-01. End: 2021-02-28.

What is the typical cost per document or per page for service treatment record digitization services in the federal government?

The typical cost per document or page for service treatment record digitization can vary significantly based on factors such as document complexity, volume, required quality control, and the specific services included (e.g., indexing, metadata tagging, secure destruction). For standard document scanning and basic indexing, costs can range from $0.05 to $0.20 per page. However, for more complex records requiring specialized handling, advanced indexing, or integration into existing systems, costs can escalate. Without specific details on the volume and complexity of the service treatment records digitized under this ANACOMP contract, a direct per-unit cost comparison is challenging. The total award of $23.18 million over 1764 days suggests a substantial volume, but the lack of per-unit pricing in the provided data prevents a definitive value assessment against industry benchmarks.

How does the firm fixed-price (FFP) contract type impact risk and value for this digitization project?

A Firm Fixed-Price (FFP) contract type, like the one used for ANACOMP's service treatment record digitization, shifts most of the risk to the contractor. This means ANACOMP is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the government, this provides cost certainty, as the total expenditure is known upfront. However, it can also reduce the government's ability to benefit from cost savings if the contractor finds efficiencies. The value proposition of an FFP contract hinges on the accuracy of the initial cost estimate and the contractor's ability to perform efficiently. If the initial estimate was too high or if ANACOMP underperforms, the government may not receive optimal value. Conversely, if ANACOMP is highly efficient, they bear the risk of lower profit margins, which could incentivize them to cut corners if not properly monitored.

What are the potential risks associated with a contract duration of over 1700 days for document digitization?

A contract duration exceeding 1700 days (approximately 4.8 years) for document digitization presents several potential risks. Firstly, technology in digitization and data management evolves rapidly; a long-term contract might not leverage the most current or cost-effective technologies available later in its term. Secondly, the scope of work could change significantly over such a period due to evolving requirements or policy shifts within the Department of Defense, potentially leading to costly contract modifications or a contract that becomes misaligned with current needs. Thirdly, maintaining consistent quality and performance over an extended period can be challenging, increasing the risk of performance degradation. Finally, long-term contracts can reduce flexibility, making it harder for the government to pivot to new solutions or contractors if better options emerge or if the incumbent contractor's performance falters.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the competition level and potential pricing?

'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the agency intended to compete the contract broadly but had a specific, justifiable reason to exclude certain potential offerors. This exclusion is typically based on factors like national security, proprietary information, or unique capabilities. While it's a form of competition, it's inherently less open than a standard 'full and open' competition where all responsible sources are considered without exclusion. The exclusion of sources can limit the number of viable bidders, potentially reducing the competitive pressure on pricing. If only a few sources remain after exclusions, the resulting price might be higher than what could be achieved in a truly unrestricted competition, as the winning contractor faces less direct pressure from a wider array of potential competitors.

How does the NAICS code 561410 (Document Preparation Services) relate to the contract's scope and potential value?

The NAICS code 561410, 'Document Preparation Services,' accurately categorizes the core function of the contract awarded to ANACOMP, INC. This code encompasses businesses primarily engaged in typing, transcription, document copying, mailing, and other document handling services. While digitization is a key component, the broader 'document preparation' scope suggests services might extend beyond simple scanning to include organizing, indexing, and potentially preparing documents for archival or electronic distribution. The value of such services can vary widely. Basic copying and typing are low-cost activities, but large-scale, secure digitization and complex indexing of sensitive military records, as implied by the Department of Defense context and the contract's substantial value, command higher prices due to the specialized equipment, security protocols, and labor involved.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Document Preparation Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018915RZ051

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3675 CONCORDE PKWY STE 1500, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $23,182,973

Exercised Options: $23,182,973

Current Obligation: $23,182,973

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline