DoD's $19.3M Cyber Security Support contract awarded to Cherokee Nation Operational Solutions raises value questions

Contract Overview

Contract Amount: $19,365,020 ($19.4M)

Contractor: Cherokee Nation Operational Solutions, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2024-02-07

End Date: 2025-11-06

Contract Duration: 638 days

Daily Burn Rate: $30.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: DHA CYBER SECURITY SUPPORT II

Place of Performance

Location: HANAHAN, BERKELEY County, SOUTH CAROLINA, 29410

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $19.4 million to CHEROKEE NATION OPERATIONAL SOLUTIONS, L.L.C. for work described as: DHA CYBER SECURITY SUPPORT II Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding and limited public performance data. 2. Competition dynamics are minimal, with the award being 'NOT AVAILABLE FOR COMPETITION', potentially impacting price discovery. 3. Risk indicators include the sole-source nature of the award and the absence of a clear performance benchmark. 4. Performance context is limited, making it difficult to assess the effectiveness of cyber security support provided. 5. The contract falls within the Engineering Services sector, supporting critical Department of Defense cyber security needs. 6. The fixed-fee pricing structure, while common, requires careful scrutiny to ensure fair market value. 7. The contract duration of 638 days suggests a significant, ongoing need for cyber security expertise.

Value Assessment

Rating: questionable

Benchmarking the value of this $19.3 million contract is challenging without comparable sole-source awards or detailed performance metrics. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring to ensure costs remain reasonable and do not exceed the fixed fee. Given the lack of competition, it's difficult to ascertain if the pricing reflects fair market value. Further analysis of the contractor's historical performance on similar contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION', indicating no formal bidding process occurred. This sole-source approach limits the opportunity for multiple vendors to propose solutions and potentially drive down costs through competitive pricing. The absence of a competitive environment means the government did not benefit from a range of technical approaches or price points that typically emerge from open solicitations.

Taxpayer Impact: Taxpayers may not be receiving the best possible value when contracts are awarded without competition, as the potential for cost savings through bidding is forgone.

Public Impact

The Department of Defense benefits from enhanced cyber security capabilities to protect its networks and sensitive information. Services delivered include critical cyber security support, likely encompassing threat detection, vulnerability assessment, and incident response. The geographic impact is primarily within the Department of Defense's operational footprint, potentially supporting various military branches. Workforce implications may involve specialized cyber security professionals employed by Cherokee Nation Operational Solutions, L.L.C.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding limits price discovery and potential cost savings for taxpayers.
Sole-source award raises concerns about whether the most innovative or cost-effective solution was secured.
Limited public performance data makes it difficult to assess the effectiveness and value for money.
CPFF contract type requires diligent oversight to prevent cost overruns beyond the fixed fee.

Positive Signals

Award to a company with potential expertise in operational solutions and engineering services.
Contract addresses a critical need for cyber security support within the Department of Defense.
Fixed fee component provides some cost certainty once the fee is established.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically addressing cyber security needs for the Department of Defense. The market for cyber security services is substantial and growing, driven by increasing digital threats. Comparable spending benchmarks are difficult to establish for sole-source awards, but the overall federal spending on cyber security runs into billions annually, highlighting the critical nature of this domain.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses mandated by this specific award. The prime contractor, Cherokee Nation Operational Solutions, L.L.C., is an entity that may have its own small business subcontracting goals on other contracts, but this particular award does not contribute to the small business ecosystem through set-asides.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Navy's contracting officers and program managers. Accountability measures are tied to the Cost Plus Fixed Fee structure, requiring the contractor to adhere to agreed-upon costs and performance standards. Transparency is limited due to the sole-source nature and lack of publicly available performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Cyber Security Services
Federal IT Services Contracts
Engineering Services Contracts
Sole Source IT Procurements

Risk Flags

Sole-source award
Lack of competitive bidding
Limited performance transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.4 million to CHEROKEE NATION OPERATIONAL SOLUTIONS, L.L.C.. DHA CYBER SECURITY SUPPORT II

Who is the contractor on this award?

The obligated recipient is CHEROKEE NATION OPERATIONAL SOLUTIONS, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $19.4 million.

What is the period of performance?

Start: 2024-02-07. End: 2025-11-06.

What is the track record of Cherokee Nation Operational Solutions, L.L.C. on similar Department of Defense cyber security contracts?

Assessing the track record of Cherokee Nation Operational Solutions, L.L.C. on similar Department of Defense cyber security contracts requires a deep dive into historical contract awards and performance evaluations. While this specific award is for cyber security support, the company's broader portfolio in operational solutions and engineering services may provide relevant context. Publicly available data, such as contract databases and performance assessment reports (if accessible), would be crucial. A review of past performance ratings, any contract disputes, and successful delivery on prior engagements would help determine their capability and reliability in fulfilling the current cyber security requirements. Without specific performance data for this contractor on comparable cyber security tasks, it is difficult to definitively assess their expertise in this specialized area.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for cyber security support services?

The Cost Plus Fixed Fee (CPFF) pricing structure is a common method used by the government for complex services where the scope of work may evolve or is difficult to define precisely upfront, such as cyber security support. In a CPFF contract, the government reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. Industry standards for cyber security support services often see a mix of pricing models, including CPFF, Time and Materials (T&M), and Firm-Fixed-Price (FFP). CPFF is generally considered appropriate when risks are shared and innovation is encouraged, but it requires robust oversight to manage costs. Compared to FFP, which offers greater cost certainty to the government but less flexibility for the contractor, CPFF can be more expensive if not managed tightly. Benchmarking the fixed fee against industry profit margins for similar services is essential to ensure fair value.

What are the specific cyber security risks being mitigated by this contract, and how is success measured?

The specific cyber security risks being mitigated by this contract are not detailed in the provided data. However, typical cyber security support for an entity like the Department of Defense would involve addressing threats such as unauthorized access, data breaches, malware infections, denial-of-service attacks, and insider threats. Success measurement for such a contract would ideally involve Key Performance Indicators (KPIs) related to threat detection rates, incident response times, vulnerability remediation timelines, and the overall reduction in security incidents. Without access to the contract's Statement of Work (SOW) and performance metrics, it is impossible to ascertain the precise risks targeted or how the contractor's performance is being evaluated and measured for effectiveness.

Given the sole-source award, what steps were taken to ensure the contractor possesses the necessary expertise and capacity for this critical cyber security role?

When a contract is awarded on a sole-source basis, especially for critical functions like cyber security, the awarding agency is expected to have conducted thorough due diligence to ensure the selected contractor possesses the requisite expertise and capacity. This typically involves reviewing the contractor's past performance, technical qualifications, financial stability, and relevant certifications. The justification for the sole-source award (often documented in a Justification and Approval, or J&A) would outline why competition was not feasible or advantageous. For this contract, the Department of the Navy would have had to demonstrate that Cherokee Nation Operational Solutions, L.L.C. is uniquely capable of meeting the government's needs, potentially due to specialized knowledge, existing infrastructure, or prior successful work on related systems.

What is the historical spending trend for cyber security support services within the Department of the Navy or Department of Defense?

Historical spending trends for cyber security support services within the Department of the Navy and the broader Department of Defense have shown a consistent and significant increase over the past decade. This upward trajectory is driven by the escalating sophistication of cyber threats, the increasing reliance on digital infrastructure, and evolving regulatory requirements. Federal agencies, particularly defense organizations, allocate substantial portions of their IT budgets to cyber security solutions, including personnel, technology, and services. While specific figures for the Navy's cyber security support contracts fluctuate annually based on needs and appropriations, the overall trend indicates a sustained and growing investment in protecting critical assets and information systems. This contract, valued at over $19 million, aligns with this broader pattern of substantial federal investment in cyber defense.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › EQUIPMENT AND MATERIALS TESTING

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 10838 E MARSHALL ST STE 220-A, TULSA, OK, 74116

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, 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: $19,655,620

Exercised Options: $19,655,620

Current Obligation: $19,365,020

Actual Outlays: $2,295,890

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,811,115

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6523622D8008

IDV Type: IDC

Timeline