DoD's $26.5M IT support contract for Navy's Alaska facilities awarded to Chugach Information Technology LLC

Contract Overview

Contract Amount: $26,494,984 ($26.5M)

Contractor: Chugach Information Technology LLC

Awarding Agency: Department of Defense

Start Date: 2018-09-26

End Date: 2023-09-25

Contract Duration: 1,825 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: OTHER COMMAND FUNDED (OCF) SURFACE MAINTENANCE/REPAIR (SMR) AND VISUAL INFORMATION SYSTEMS (VIS) MAINTENANCE/REPAIR SUPPORT SERVICES

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to CHUGACH INFORMATION TECHNOLOGY LLC for work described as: OTHER COMMAND FUNDED (OCF) SURFACE MAINTENANCE/REPAIR (SMR) AND VISUAL INFORMATION SYSTEMS (VIS) MAINTENANCE/REPAIR SUPPORT SERVICES Key points: 1. Contract provides essential IT and visual information systems maintenance for Navy operations in Alaska. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The contract duration of five years indicates a long-term need for these services. 4. The cost-plus-fixed-fee pricing structure may incentivize contractor efficiency. 5. Performance is located in Alaska, potentially impacting local IT workforce and infrastructure. 6. The contract value is significant for specialized IT support services in a remote location.

Value Assessment

Rating: good

The contract value of approximately $26.5 million over five years for IT and visual information systems support appears reasonable given the specialized nature of the services and the remote geographic location in Alaska. Benchmarking against similar IT support contracts for government facilities, especially in remote or challenging environments, would provide further context. The cost-plus-fixed-fee (CPFF) structure, while potentially leading to higher costs than fixed-price contracts if not managed well, allows for flexibility in scope and is common for services where precise cost estimation is difficult upfront. The total obligated amount is within expected ranges for this type of long-term support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of a competitive bidding process is generally favorable for price discovery and ensuring the government receives competitive pricing. While the number of bidders is not specified, the 'full and open' designation suggests a robust competition was sought, which should have driven down costs and improved service offerings.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the funds expended on critical IT infrastructure support in a challenging operational environment.

Public Impact

The primary beneficiaries are the Department of the Navy's operations in Alaska, ensuring the continuity and effectiveness of their IT and visual information systems. Services include maintenance and repair of critical IT infrastructure and visual information systems, supporting daily operations and readiness. The geographic impact is concentrated in Alaska, specifically supporting Navy facilities within the state. The contract may have implications for the local IT workforce in Alaska, potentially creating or sustaining jobs through Chugach Information Technology LLC's operations and subcontracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not closely monitored.
The remote location in Alaska may present logistical challenges and potentially higher operational costs.
Reliance on a single contractor for five years could reduce flexibility in adopting new technologies or changing service providers.

Positive Signals

Awarded through full and open competition, indicating a competitive process likely yielded fair pricing.
The five-year duration suggests a stable, long-term partnership for critical services.
Chugach Information Technology LLC's role in supporting vital Navy operations highlights their capability.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically focusing on IT and visual information systems support. The market for government IT support services is substantial, with significant spending allocated annually across various agencies. This contract represents a portion of the Department of Defense's broader IT infrastructure investment, particularly for maintaining operational capabilities in geographically dispersed and often challenging locations like Alaska. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded to service providers for federal agencies operating in similar remote or specialized environments.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by a set-aside. The prime contractor, Chugach Information Technology LLC, is responsible for managing its own subcontracting plan, if any. The absence of a small business set-aside means the competition was open to all eligible firms, potentially limiting direct opportunities for small businesses unless they are part of the prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures are embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases and public reporting mechanisms. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense IT Support Services
Navy Facilities Maintenance Contracts
Information Technology Services for Government
Engineering Services Contracts
Remote Operations Support Services

Risk Flags

Potential for cost overruns due to CPFF structure
Logistical challenges and higher operational costs in remote Alaska
Long-term commitment may limit flexibility
Dependence on contractor performance for critical IT services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to CHUGACH INFORMATION TECHNOLOGY LLC. OTHER COMMAND FUNDED (OCF) SURFACE MAINTENANCE/REPAIR (SMR) AND VISUAL INFORMATION SYSTEMS (VIS) MAINTENANCE/REPAIR SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CHUGACH INFORMATION 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 $26.5 million.

What is the period of performance?

Start: 2018-09-26. End: 2023-09-25.

What is the track record of Chugach Information Technology LLC in performing similar IT support contracts for the Department of Defense or other federal agencies?

Chugach Information Technology LLC (CITC) has a history of performing IT and technical support services for various government agencies, including the Department of Defense. Their experience often includes network management, system administration, cybersecurity, and help desk support. For instance, CITC has held contracts with agencies like the U.S. Army and the U.S. Air Force, providing similar services in diverse locations. Their performance on previous contracts, including any awards or past performance evaluations, would be crucial in assessing their capability to successfully execute this specific Navy contract in Alaska. A review of their contract history, including contract values and durations, can indicate their capacity and reliability in handling large-scale, long-term IT support requirements for the federal government.

How does the awarded value of $26.5 million compare to similar IT support contracts for remote government facilities?

The $26.5 million contract value over five years, averaging approximately $5.3 million annually, for IT and visual information systems support in Alaska appears to be within a reasonable range for specialized services in a remote and potentially high-cost-of-living area. Benchmarking against similar contracts awarded by the Department of Defense or other agencies for IT support in locations like Guam, Hawaii, or other remote continental U.S. bases would provide a more precise comparison. Factors such as the scope of services (e.g., network infrastructure, cybersecurity, end-user support, specific visual information systems), the number of users supported, and the complexity of the environment significantly influence pricing. Given the operational demands and logistical considerations in Alaska, this value suggests a substantial scope of work and a commitment to ensuring robust IT capabilities for the Navy.

What are the primary risks associated with this contract, considering its duration, location, and cost-plus-fixed-fee structure?

Several risks are associated with this contract. The five-year duration, while providing stability, also means a long-term commitment that could become less advantageous if technology evolves rapidly or if performance issues arise and are difficult to rectify. The remote Alaskan location presents logistical challenges, potentially increasing operational costs for the contractor and impacting response times for critical issues. The Cost-Plus-Fixed-Fee (CPFF) structure carries inherent risks of cost escalation if the contractor's costs exceed initial estimates, although the fixed fee provides a ceiling on profit. Effective oversight is crucial to manage these risks, ensuring the contractor maintains efficiency and controls costs while delivering required services. Performance monitoring and clear communication channels are vital to mitigate potential issues.

How effective is the Cost-Plus-Fixed-Fee (CPFF) pricing structure in ensuring value for money for this specific contract?

The CPFF structure aims to balance flexibility with cost control. It is often used when the scope of work is not precisely defined at the outset or is expected to evolve, as is common in complex IT support services. The 'cost-plus' element allows the contractor to recover allowable costs incurred, while the 'fixed-fee' provides a predetermined profit margin. This structure can be effective if the government exercises strong oversight to ensure costs are reasonable and allocable, and that the contractor is incentivized to perform efficiently to meet the fixed fee without compromising quality. However, it carries a risk of cost overruns if not managed diligently, potentially leading to less value for money compared to a firm-fixed-price contract if costs escalate significantly. The effectiveness hinges on robust government cost monitoring and performance management.

What are the potential implications of this contract on the local IT market and workforce in Alaska?

This contract could have positive implications for the local IT market and workforce in Alaska. As a significant contract supporting federal operations, it is likely to create or sustain jobs for IT professionals, technicians, and support staff within the state. Chugach Information Technology LLC, as the prime contractor, may prioritize hiring local talent or subcontracting with local Alaskan businesses, thereby injecting capital into the regional economy. The demand for specialized IT skills in a remote location could also spur training and development opportunities. However, it could also lead to increased competition for skilled IT workers, potentially driving up wages. The long-term presence of such a contract can contribute to the stability and growth of the IT sector in Alaska.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6523618R3069

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 1200, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $51,782,540

Exercised Options: $40,147,640

Current Obligation: $26,494,984

Actual Outlays: $-340,437

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $4,060,247

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017815D8134

IDV Type: IDC

Timeline