DoD's $3M contract for technical data center services awarded to ISPA TECHNOLOGY LLC, with no competition

Contract Overview

Contract Amount: $3,041,012 ($3.0M)

Contractor: Ispa Technology LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2026-09-24

Contract Duration: 364 days

Daily Burn Rate: $8.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: JEXC2 FOS TECHNICAL DATA CENTER POST OTA FULL-RATE PRODUCTION IDIQ

Place of Performance

Location: PANAMA CITY BEACH, BAY County, FLORIDA, 32407

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $3.0 million to ISPA TECHNOLOGY LLC for work described as: JEXC2 FOS TECHNICAL DATA CENTER POST OTA FULL-RATE PRODUCTION IDIQ Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of market-driven pricing. 2. The contract's duration of 364 days suggests a need for ongoing technical data center support. 3. Awarded by the Department of the Navy, indicating a focus on naval operations and readiness. 4. The fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 5. The absence of small business set-asides or participation suggests limited opportunities for smaller firms in this specific award. 6. The contract falls under the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' NAICS code, implying a focus on communication infrastructure.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to assess the value for money. The $3.04 million contract price cannot be benchmarked against similar offerings in the market. The fixed-price nature provides some cost certainty, but the lack of competition means the government may not be receiving the most cost-effective solution. Further analysis would require understanding the specific technical data center services provided and comparing them to industry standards or previous contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, ISPA TECHNOLOGY LLC, was considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified contractors. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no pressure on the contractor to offer competitive pricing. It also reduces transparency and opportunities for other businesses to secure government contracts.

Public Impact

The Department of the Navy benefits from the provision of technical data center services, likely supporting critical naval operations and information systems. The contract ensures the continuity of essential data center functions, which are vital for military communications, intelligence, and administrative tasks. The services are geographically focused within Florida, suggesting a specific operational need or facility presence in that state. The contract may indirectly impact the workforce by requiring specialized technical skills for data center operations and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated prices.
Sole-source award limits transparency and accountability.
No clear indication of performance metrics or evaluation criteria.
Potential for vendor lock-in due to specialized services.

Positive Signals

Fixed-price contract type helps to cap costs.
Awarded to a specific contractor, potentially ensuring continuity of service.
Contract duration provides a defined period for service delivery.

Sector Analysis

The contract falls within the IT and defense sectors, specifically related to the manufacturing and support of wireless communications equipment and data center operations. The market for such services is substantial, driven by the continuous need for robust and secure information infrastructure within government and defense agencies. Comparable spending benchmarks are difficult to establish without knowing the precise scope of services, but IT infrastructure support is a significant area of federal expenditure.

Small Business Impact

This contract does not appear to include any small business set-asides, as indicated by the 'sb' field being false. There is also no information provided regarding subcontracting plans. This suggests that opportunities for small businesses to participate in this specific contract are limited, and the primary awardee is not obligated to engage small business subcontractors under this particular award.

Oversight & Accountability

Oversight mechanisms for this contract are not explicitly detailed in the provided data. As a sole-source award, it may be subject to specific justification requirements and review processes within the Department of the Navy. Transparency could be enhanced by making the sole-source justification publicly available. Accountability would typically be managed through contract performance monitoring and reporting, though specific metrics are not provided here.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
Naval Information Warfare Systems Command (NAVWAR) procurements
Federal Data Center Consolidation Initiative (FDCCI)
IT Infrastructure Support Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency regarding service scope and performance metrics.
No indication of small business participation or subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.0 million to ISPA TECHNOLOGY LLC. JEXC2 FOS TECHNICAL DATA CENTER POST OTA FULL-RATE PRODUCTION IDIQ

Who is the contractor on this award?

The obligated recipient is ISPA TECHNOLOGY 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 $3.0 million.

What is the period of performance?

Start: 2025-09-25. End: 2026-09-24.

What specific technical data center services are being procured under this contract?

The provided data does not specify the exact technical data center services. However, the NAICS code '334220' (Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing) and the contract description 'JEXC2 FOS TECHNICAL DATA CENTER POST OTA FULL-RATE PRODUCTION IDIQ' suggest services related to the operation, maintenance, and potentially the production or integration of technical data center infrastructure, likely supporting wireless communications equipment. This could encompass hardware maintenance, software support, network management, data storage solutions, and cybersecurity measures within a data center environment.

What is the justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements require a formal justification document outlining why competition is not feasible or advantageous. Common reasons include the existence of unique capabilities held by only one contractor, urgent and compelling needs where a competitive process would cause unacceptable delays, or when a follow-on contract is awarded to the original source of an item or service under specific conditions. Without this justification, it is impossible to fully assess the rationale behind bypassing competition.

How does the $3.04 million contract value compare to similar sole-source IT service contracts within the Department of Defense?

Benchmarking this $3.04 million contract value against similar sole-source IT service contracts within the Department of Defense is challenging without more specific details on the services rendered and the contract's scope. Sole-source awards can vary significantly in price depending on the complexity and criticality of the services. To provide a meaningful comparison, one would need to identify other sole-source contracts for comparable data center operations or technical support within the DoD, analyze their duration, service levels, and total value, and then assess if ISPA TECHNOLOGY LLC's award falls within a reasonable range or appears disproportionately high or low.

What are the potential risks associated with a sole-source award for critical data center services?

Sole-source awards for critical data center services carry several potential risks. Firstly, the lack of competition can lead to higher costs for the government, as the contractor faces no pressure to offer the most competitive pricing. Secondly, there's a risk of reduced innovation and service quality, as the contractor may have less incentive to improve offerings without competitive threats. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future. Finally, sole-source awards can sometimes indicate a lack of adequate market research or planning by the procuring agency, potentially missing opportunities for better value.

What is ISPA TECHNOLOGY LLC's track record with the Department of Defense, particularly for data center services?

The provided data indicates that ISPA TECHNOLOGY LLC is the contractor for this $3.04 million contract. However, it does not offer details on their specific track record with the Department of Defense or their experience in providing data center services. A comprehensive assessment of their track record would require reviewing past performance evaluations, other contracts awarded to them by the DoD, and their history of delivering similar technical services. This information is crucial for understanding their reliability, expertise, and past performance in fulfilling government requirements.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6232 KINGBIRD MANOR DR, LITHIA, FL, 33547

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,847,346

Exercised Options: $8,847,346

Current Obligation: $3,041,012

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6133125D0005

IDV Type: IDC

Timeline