DoD's $14.3M IT Services Contract Awarded to M2 Technology, Inc. for Cloud Solutions

Contract Overview

Contract Amount: $14,313,675 ($14.3M)

Contractor: M2 Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-08-25

End Date: 2026-08-31

Contract Duration: 1,102 days

Daily Burn Rate: $13.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HPE GREENLAKE SERVICES

Place of Performance

Location: MONTEREY, MONTEREY County, CALIFORNIA, 93943

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to M2 TECHNOLOGY, INC. for work described as: HPE GREENLAKE SERVICES Key points: 1. Contract value represents a significant investment in modernizing IT infrastructure. 2. Competition was conducted under 'full and open after exclusion of sources,' suggesting a specific need or limited initial bidders. 3. The contract's duration of over 3 years indicates a long-term commitment to the services provided. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The award falls under 'Other Computer Related Services,' a broad category encompassing various IT support functions. 6. Geographic focus on California highlights regional IT service delivery needs for the Navy.

Value Assessment

Rating: good

The contract value of $14.3 million for IT services appears reasonable given the multi-year duration and the nature of cloud solutions. Benchmarking against similar large-scale IT service contracts for the Department of Defense suggests that pricing is likely competitive, especially considering the fixed-price nature which shifts some risk to the contractor. However, without specific details on the service components and their individual pricing, a definitive value-for-money assessment is challenging. The contractor's track record and past performance would be crucial in fully evaluating the value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This procurement method implies that while the competition was intended to be open, certain sources may have been excluded, possibly due to specific technical requirements, prior performance, or a phased approach to a larger requirement. The number of bidders is not specified, but the method suggests a potentially more limited pool than a purely open competition, which could impact price discovery.

Taxpayer Impact: The 'exclusion of sources' aspect warrants scrutiny to ensure that it did not unduly limit competition and potentially lead to higher costs for taxpayers. Transparency in the justification for exclusion is key to confirming fair market value.

Public Impact

The Department of the Navy benefits from enhanced IT infrastructure and cloud services, potentially improving operational efficiency. End-users within the Navy will receive updated and potentially more reliable IT support and services. The contract's impact is primarily within the Department of Defense's IT operations, with a focus on California-based activities. Workforce implications may include the need for specialized IT personnel to manage and implement cloud solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' justification needs to be thoroughly reviewed to ensure it was appropriate and did not stifle competition.
Lack of specific details on service deliverables makes it difficult to fully assess performance metrics and potential risks.
The broad 'Other Computer Related Services' category could mask specific areas of concern if not clearly defined.
Dependence on a single awardee for a significant IT service contract can introduce vendor lock-in risks.

Positive Signals

The fixed-price contract type provides cost certainty for the government.
The multi-year duration suggests a strategic investment in IT modernization.
Awarding to M2 Technology, Inc. indicates confidence in their capabilities for delivering these specific IT services.
The contract is likely aligned with broader DoD initiatives for cloud adoption and IT infrastructure improvement.

Sector Analysis

The IT services sector is highly dynamic, with significant government spending focused on cloud computing, cybersecurity, and data management. This contract for 'Other Computer Related Services' fits within the broader trend of federal agencies seeking to modernize their IT infrastructure through managed services and cloud solutions. The market for these services is competitive, with large system integrators and specialized IT firms vying for contracts. Comparable spending benchmarks for similar multi-year IT service contracts within the DoD often range in the tens to hundreds of millions of dollars, depending on scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, M2 Technology, Inc., is not explicitly identified as a small business in the provided data. Therefore, the direct impact on small business set-asides is minimal. However, the contract's value and scope could present subcontracting opportunities for small businesses if M2 Technology, Inc. chooses to engage them for specialized services or support, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract's performance work statement (PWS), outlining deliverables, service levels, and reporting requirements. Transparency is facilitated through contract databases like FPDS-NG, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected or reported.

Related Government Programs

DoD Cloud Computing Strategy
Navy Information Technology Modernization Programs
General Services Administration (GSA) IT Schedule Contracts
Other Computer Related Services (NAICS 541519) Spending

Risk Flags

Potential for limited competition due to source exclusion.
Lack of detailed service scope makes full value assessment difficult.
Reliance on contractor's cybersecurity practices.
Potential for vendor lock-in with specialized services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to M2 TECHNOLOGY, INC.. HPE GREENLAKE SERVICES

Who is the contractor on this award?

The obligated recipient is M2 TECHNOLOGY, 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 $14.3 million.

What is the period of performance?

Start: 2023-08-25. End: 2026-08-31.

What is the specific nature of the 'Other Computer Related Services' being provided under this contract?

The provided data classifies this contract under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support functions, including IT system design, integration, and management, as well as cloud services, data processing, and IT consulting. Without a detailed Performance Work Statement (PWS) or contract award narrative, the precise services are not specified. However, given the context of 'HPE GREENLAKE SERVICES' and the Department of Defense, it is highly probable that these services relate to the provision, management, and support of cloud infrastructure, hybrid cloud solutions, or managed IT services delivered through HPE's GreenLake platform. This could include hardware, software, and associated services for on-premises or hybrid cloud environments.

How does the pricing of this $14.3 million contract compare to similar IT service contracts awarded by the Department of Defense?

Benchmarking the pricing of this $14.3 million contract requires comparing it against similar IT service contracts awarded by the Department of Defense (DoD) for comparable services and durations. The contract is a Firm Fixed Price (FFP) award with a duration of approximately 3 years (1102 days). FFP contracts are generally preferred for well-defined scopes of work to ensure cost certainty. Without access to the specific line-item pricing or the detailed scope of work, a precise comparison is difficult. However, the total value suggests a significant investment. Generally, IT service contracts of this magnitude for cloud solutions or managed services within the DoD can range widely, from tens to hundreds of millions of dollars over several years. Factors like the specific technologies involved (e.g., HPE GreenLake), the level of service, and the number of users or systems supported heavily influence cost. The fact that it was competed, even with exclusions, suggests an attempt to achieve market-based pricing.

What are the potential risks associated with the 'full and open competition after exclusion of sources' procurement method used for this contract?

The 'full and open competition after exclusion of sources' method, while intended to be competitive, carries specific risks. The primary risk is that the exclusion of certain sources, even if justified, may limit the pool of potential offerors, potentially leading to less robust competition than a truly open process. This reduced competition could, in turn, result in higher prices or less innovative solutions for the government. Another risk is the potential for protests if excluded sources believe the exclusion was unwarranted or improperly justified. Furthermore, the justification for exclusion needs to be transparent and well-documented to assure taxpayers that the government acted in its best interest and did not unnecessarily restrict competition. If the exclusion was based on proprietary technology or specific vendor capabilities, there's also a risk of vendor lock-in.

What is the track record of M2 Technology, Inc. in delivering large-scale IT service contracts for the federal government?

Information regarding M2 Technology, Inc.'s track record in delivering large-scale IT service contracts for the federal government is crucial for assessing performance risk. While the provided data indicates M2 Technology, Inc. as the awardee, it does not detail their past performance history, contract values, or client satisfaction. A thorough review would involve examining their contract history in federal databases (like FPDS-NG), looking for previous awards of similar scope and value, and assessing past performance evaluations if publicly available. A strong track record with successful delivery of complex IT projects, particularly in cloud services or managed IT, would indicate a lower performance risk. Conversely, a history of performance issues, contract disputes, or missed deadlines would raise concerns about their ability to meet the requirements of this new $14.3 million contract.

How does this contract align with the Department of Defense's broader strategy for IT modernization and cloud adoption?

This contract appears to align with the Department of Defense's (DoD) overarching strategy for IT modernization and cloud adoption. The DoD has been actively pursuing a multi-cloud strategy to enhance agility, improve data accessibility, and strengthen cybersecurity. Contracts like this, which involve significant IT services and potentially cloud solutions (indicated by 'HPE GREENLAKE SERVICES'), are instrumental in executing this strategy. By investing in modern IT infrastructure and services, the DoD aims to achieve greater operational effectiveness, enable advanced capabilities like AI and data analytics, and ensure its technological superiority. The duration of the contract suggests a commitment to long-term modernization efforts rather than short-term fixes, reinforcing the strategic nature of this award.

What are the potential implications for cybersecurity given the nature of the IT services being procured?

The implications for cybersecurity are significant, as IT services, especially those involving cloud infrastructure and managed services, are critical to the DoD's security posture. The contract likely includes stringent cybersecurity requirements, mandating compliance with federal standards such as NIST (National Institute of Standards and Technology) guidelines and DoD-specific security protocols. M2 Technology, Inc. would be responsible for implementing and maintaining security measures to protect sensitive government data and systems from cyber threats. This includes aspects like access control, data encryption, vulnerability management, and incident response. The effectiveness of these cybersecurity measures will depend on the contractor's expertise, the robustness of their security protocols, and the government's oversight. Any lapse in cybersecurity could have severe consequences for national security.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0018923QR092

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21702 HARDY OAK BLVD STE 100, SAN ANTONIO, TX, 78258

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $30,003,211

Exercised Options: $14,313,675

Current Obligation: $14,313,675

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SC81B

IDV Type: GWAC

Timeline