DoD's $13M Internet Subscription Contract Awarded to ALLIUM US HOLDING LLC Raises Competition Concerns
Contract Overview
Contract Amount: $13,013,484 ($13.0M)
Contractor: Allium US Holding LLC
Awarding Agency: Department of Defense
Start Date: 2023-09-30
End Date: 2026-09-29
Contract Duration: 1,095 days
Daily Burn Rate: $11.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: NON-GOVERNMENT STANDARD INTERNET SUBSCRIPTION CONTRACT
Place of Performance
Location: ENGLEWOOD, DOUGLAS County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $13.0 million to ALLIUM US HOLDING LLC for work described as: NON-GOVERNMENT STANDARD INTERNET SUBSCRIPTION CONTRACT Key points: 1. The contract is for computing infrastructure, data processing, and web hosting services. 2. A significant portion of the award value is concentrated with a single vendor. 3. The lack of competition raises questions about potential overpricing and value for taxpayer money. 4. The IT sector is highly competitive, making non-competitive awards notable.
Value Assessment
Rating: questionable
The contract value of $13,013,483.75 for a 3-year period needs further scrutiny. Without competitive bids, it's difficult to assess if this pricing is aligned with market rates for similar cloud and internet subscription services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, falling under a limited competition category. This approach limits price discovery and may not yield the best value for the government compared to a full and open competition.
Taxpayer Impact: The lack of competition could lead to higher costs for taxpayers if the awarded price exceeds what could have been achieved through a competitive bidding process.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The Department of the Navy is procuring essential IT infrastructure services. The contract duration of three years locks in the current vendor, potentially limiting future cost savings. Reliance on a single vendor for critical services can pose a risk if performance issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Vendor lock-in
Positive Signals
- Definitive contract awarded
- Firm fixed price contract type
Sector Analysis
This contract falls within the IT sector, specifically cloud computing and data processing services. Benchmarks for similar government contracts in this space often show significant price variations based on service level agreements and competition levels.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to confirm their participation.
Oversight & Accountability
The award was made under a definitive contract, suggesting it has undergone some level of review. However, the non-competitive nature warrants closer oversight to ensure fair pricing and adequate service delivery.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited vendor options
- Long-term commitment without demonstrated best value
- Absence of small business participation noted
Tags
computing-infrastructure-providers-data-, department-of-defense, co, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.0 million to ALLIUM US HOLDING LLC. NON-GOVERNMENT STANDARD INTERNET SUBSCRIPTION CONTRACT
Who is the contractor on this award?
The obligated recipient is ALLIUM US HOLDING 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 $13.0 million.
What is the period of performance?
Start: 2023-09-30. End: 2026-09-29.
What specific justification was provided for not competing this contract, and does it align with federal procurement regulations for limited competition?
The provided data indicates the contract was 'NOT COMPETED'. Federal regulations allow for limited competition under specific circumstances, such as when only one responsible source can satisfy agency requirements. A thorough review of the justification documentation is necessary to confirm its validity and ensure it meets the criteria for sole-source or limited competition awards, thereby safeguarding taxpayer interests.
How does the per-unit cost of these internet subscription services compare to industry benchmarks for similar government or commercial contracts?
Without specific details on the service levels, bandwidth, and support included in this $13 million contract, a direct per-unit cost comparison is challenging. However, given the lack of competition, there is a heightened risk that the pricing may be above market rates. Benchmarking against similar government contracts awarded competitively or against commercial price lists for comparable services is crucial for assessing value.
What are the potential risks associated with awarding a three-year contract for critical IT infrastructure without competition, particularly regarding service continuity and vendor performance?
Awarding a three-year contract without competition introduces risks such as potential vendor complacency, difficulty in addressing performance issues if they arise, and missed opportunities for cost savings through future competitive re-procurement. Service continuity could be jeopardized if the vendor faces financial instability or operational challenges, and the government may have limited recourse or alternatives due to the non-competitive nature of the initial award.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6247021R9011
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 15 INVERNESS WAY E, ENGLEWOOD, CO, 80112
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,711,602
Exercised Options: $13,013,484
Current Obligation: $13,013,484
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-30
Current End Date: 2026-09-29
Potential End Date: 2028-09-29 00:00:00
Last Modified: 2025-09-02
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