DoD's Navy awards $26M contract for career center support to Strategic Data Systems, Inc

Contract Overview

Contract Amount: $25,991,804 ($26.0M)

Contractor: Strategic Data Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-12-15

End Date: 2024-12-14

Contract Duration: 365 days

Daily Burn Rate: $71.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LABOR - MYNAVY CAREER CENTER SUPPORT

Place of Performance

Location: MILLINGTON, SHELBY County, TENNESSEE, 38055

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $26.0 million to STRATEGIC DATA SYSTEMS, INC. for work described as: LABOR - MYNAVY CAREER CENTER SUPPORT Key points: 1. Contract value of $25.99 million for one year of service. 2. Awarded to Strategic Data Systems, Inc., a single entity. 3. Competition type: Full and Open Competition after Exclusion of Sources. 4. Contract type: Cost Plus Fixed Fee, indicating potential for cost overruns. 5. Service category: Telemarketing Bureaus and Other Contact Centers. 6. Performance period: One year, with a potential for extension. 7. Geographic location of performance: Tennessee. 8. No small business set-aside noted.

Value Assessment

Rating: fair

The contract value of $25.99 million for a one-year period for career center support appears to be within a reasonable range for large-scale government contact center operations. However, the Cost Plus Fixed Fee (CPFF) contract type introduces a degree of risk, as it allows the contractor to recover all allowable costs plus a fixed fee, potentially leading to higher overall expenditures than a fixed-price contract if costs are not managed effectively. Benchmarking against similar contracts for contact center services would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition after Exclusion of Sources.' This designation suggests that while the competition was intended to be open, specific sources may have been excluded for reasons not detailed in the provided data. The number of bidders is not specified, which limits the assessment of the competitive landscape. A robust competition typically involves multiple bidders vying for the contract, driving down prices and improving service quality.

Taxpayer Impact: The 'Full and Open Competition' aspect is generally positive for taxpayers, as it theoretically allows for the widest possible pool of contractors to bid, fostering competition that can lead to better pricing. However, the 'after exclusion of sources' clause warrants further investigation to ensure no potential cost savings were foregone.

Public Impact

Naval personnel seeking career guidance and support services will benefit directly from this contract. The services delivered include telemarketing and contact center operations to assist sailors. The primary geographic impact is in Tennessee, where the contractor is based. The contract supports the workforce by providing essential career development resources.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs if not closely monitored.
The 'after exclusion of sources' clause in the competition type requires further scrutiny.
Lack of specific bidder numbers limits the assessment of true competitive pressure.
The contract duration of one year without clear options for extension may lead to future re-competition costs.

Positive Signals

Awarded through a full and open competition, indicating an attempt to leverage market capabilities.
Strategic Data Systems, Inc. is the selected contractor, implying they met the requirements.
The contract aims to provide critical career support services to Navy personnel.

Sector Analysis

The contract falls within the broader Information Technology and Business Support Services sector, specifically focusing on contact center operations. The North American Industry Classification System (NAICS) code 561422 for Telemarketing Bureaus and Other Contact Centers represents a segment of the services industry that supports customer interaction and information dissemination. Government spending in this area is substantial, as agencies increasingly rely on outsourced contact center solutions for efficiency and specialized support.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The focus remains on large business participation and competition. The absence of a small business set-aside means that opportunities for small business prime contractors are not being specifically prioritized under this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures are inherent in the Cost Plus Fixed Fee structure, which requires detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Navy Personnel Command Career Services
Military Personnel Support Programs
Department of Defense Contact Center Services
Federal Workforce Development Initiatives

Risk Flags

Cost Plus Fixed Fee contract type
Potential for limited competition due to 'exclusion of sources'
Lack of specified number of bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to STRATEGIC DATA SYSTEMS, INC.. LABOR - MYNAVY CAREER CENTER SUPPORT

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 $26.0 million.

What is the period of performance?

Start: 2023-12-15. End: 2024-12-14.

What is the track record of Strategic Data Systems, Inc. with government contracts, particularly within the Department of Defense?

A comprehensive review of Strategic Data Systems, Inc.'s track record with government contracts, especially within the Department of Defense, would involve analyzing their past performance on similar service contracts. This includes examining contract values, durations, types (e.g., CPFF, FFP), and any reported performance issues or awards. Understanding their history with cost-reimbursable contracts like CPFF is crucial, as it indicates their experience in managing costs and providing detailed financial reporting to the government. A positive track record would suggest a lower risk of performance issues or cost overruns, while a history of problems might raise concerns about their capability to deliver effectively and efficiently on this new contract.

How does the awarded price compare to market rates for similar contact center services?

To assess the value for money, the awarded contract value of $25.99 million for one year of career center support needs to be benchmarked against prevailing market rates for comparable services. This involves researching industry reports, consulting with subject matter experts, and analyzing publicly available data on similar government and commercial contracts. Factors such as the scope of services, complexity of inquiries handled, staffing levels, technology utilized, and geographic location all influence pricing. If the awarded price is significantly higher than market benchmarks, it could indicate potential overpayment or a lack of sufficient competitive pressure. Conversely, a price below market rates might suggest exceptional value or potential risks to service quality if the contractor underbid.

What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks for the government. While it allows the contractor to recover all allowable costs incurred in performing the contract, plus a predetermined fixed fee representing profit, it provides less incentive for cost control compared to fixed-price contracts. The primary risk is that the contractor may not be motivated to minimize costs, as the government bears the financial burden of cost overruns. This can lead to the contract exceeding its estimated ceiling. Effective oversight, rigorous cost auditing, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value. The fixed fee, however, does provide some predictability regarding the contractor's profit margin.

What is the expected effectiveness of these career center support services in improving Navy personnel career outcomes?

The effectiveness of these career center support services hinges on several factors, including the quality of the personnel providing the support, the resources and information available to them, and the engagement of Navy personnel utilizing the services. Key performance indicators (KPIs) should be established to measure success, such as increased utilization rates, improved satisfaction scores from service recipients, successful placement into training or advancement programs, and positive feedback on the quality of guidance provided. Without specific performance metrics outlined in the contract or public reports, assessing the expected effectiveness is speculative. The contract's success will ultimately be judged by its contribution to the career development and retention of Navy service members.

How has federal spending on similar contact center and career support services evolved over the past five years?

Analyzing federal spending trends on similar contact center and career support services over the past five years would reveal patterns of demand and investment. This involves aggregating data from various agencies that procure such services, noting any significant increases or decreases in spending. Factors influencing these trends could include shifts in military personnel policies, changes in technology adoption for service delivery, budget allocations, and the perceived effectiveness of existing programs. Understanding historical spending provides context for the current award, indicating whether this contract represents a continuation of established spending levels, an expansion, or a reduction in federal investment in this area.

What does the 'after exclusion of sources' clause in the competition type imply for fairness and potential cost savings?

The 'after exclusion of sources' clause in a 'Full and Open Competition' context suggests that while the competition was broadly open, certain potential bidders were deliberately excluded. The reasons for exclusion are critical to understanding the implications. If exclusions were based on legitimate technical qualifications, security requirements, or specific capabilities mandated by the agency, it might be justifiable. However, if exclusions were arbitrary or lacked clear justification, it could raise concerns about fairness and potentially limit the competitive pool, thereby reducing the pressure on remaining bidders to offer the most competitive pricing. This clause warrants careful examination to ensure it does not inadvertently restrict competition or lead to suboptimal outcomes for taxpayers.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Telemarketing Bureaus and Other Contact Centers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018919RZ014

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1854 KELLER PKWY STE A, KELLER, TX, 76248

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

Financial Breakdown

Contract Ceiling: $26,019,342

Exercised Options: $26,019,342

Current Obligation: $25,991,804

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018920DZ003

IDV Type: IDC

Timeline