Navy's $60.8M NMCI Services contract awarded to HPI Federal LLC for IT support

Contract Overview

Contract Amount: $60,862,615 ($60.9M)

Contractor: HPI Federal LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-01

End Date: 2020-09-30

Contract Duration: 29 days

Daily Burn Rate: $2.1M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NMCI SERVICES

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $60.9 million to HPI FEDERAL LLC for work described as: NMCI SERVICES Key points: 1. Contract value represents a significant investment in IT infrastructure. 2. Competition dynamics for this contract are crucial for ensuring fair pricing. 3. Performance context is essential to understand the value delivered for IT services. 4. Sector positioning highlights the Navy's reliance on specialized IT support. 5. Risk indicators may include vendor performance and technological obsolescence.

Value Assessment

Rating: fair

The contract value of $60.8M for NMCI Services appears substantial. Benchmarking against similar IT support contracts within the Department of Defense is necessary to assess value for money. Without specific performance metrics or comparison data, it's difficult to definitively state if this represents excellent value. The fixed-price nature suggests cost certainty, but the overall efficiency and effectiveness of the services rendered are key to a full value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and service offerings. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and encouraging innovation among contractors, leading to more efficient use of public funds.

Public Impact

Naval forces benefit from reliable and advanced IT systems. Essential computer systems design and related services are delivered. Services are likely concentrated in Virginia, a key hub for naval operations. The contract supports IT professionals and potentially creates or sustains jobs in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creeps beyond initial fixed-price agreement.
Risk of vendor lock-in if switching costs are high.
Dependence on a single vendor for critical IT infrastructure.
Ensuring service quality meets evolving technological demands.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Fixed-price contract type provides cost certainty for the government.
Focus on essential IT services for naval operations.
Contract duration allows for stable service provision.

Sector Analysis

The IT services sector is a critical component of government operations, with significant spending allocated to computer systems design and related services. The Navy's reliance on NMCI (Naval Enterprise Network) underscores the importance of robust IT infrastructure for defense. This contract fits within the broader category of government IT procurement, which is a multi-billion dollar market annually, with specialized services like those provided by HPI Federal LLC being in high demand.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. If this contract did not include specific small business goals, it may represent a missed opportunity to engage smaller firms in supporting critical naval IT infrastructure. Further analysis would be needed to determine if small businesses were involved in the subcontracting chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, with penalties for non-performance. Transparency is generally maintained through contract award databases, though detailed performance reviews are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

NMCI Services
Department of Defense IT Procurement
Naval IT Infrastructure Support
Computer Systems Design Services Contracts

Risk Flags

Potential for vendor performance issues.
Risk of technological obsolescence.
Cybersecurity vulnerabilities.
Contract scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.9 million to HPI FEDERAL LLC. NMCI SERVICES

Who is the contractor on this award?

The obligated recipient is HPI FEDERAL 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 $60.9 million.

What is the period of performance?

Start: 2020-09-01. End: 2020-09-30.

What is the track record of HPI Federal LLC in delivering similar IT services to the Department of Defense?

Assessing HPI Federal LLC's track record requires examining past performance evaluations and contract history with the Department of Defense and other federal agencies. Key indicators include on-time delivery, adherence to budget, quality of service, and customer satisfaction ratings. A review of their past projects, particularly those involving large-scale IT support and computer systems design, would reveal their capabilities and reliability. Specific details on previous contract values, durations, and the complexity of services rendered would provide a clearer picture of their experience and suitability for contracts of this magnitude.

How does the awarded amount of $60.8M compare to similar IT support contracts for naval operations?

To benchmark the $60.8M award, one would compare it against contracts for similar scope and duration awarded to other vendors for IT support within the Navy or other branches of the Department of Defense. Factors such as the specific services included (e.g., network management, cybersecurity, system integration), the geographic coverage, and the contract type (e.g., fixed-price, cost-plus) are crucial for a fair comparison. If comparable contracts for similar services are significantly lower or higher, it could indicate issues with pricing, competition, or the unique requirements of this specific contract.

What are the primary risk indicators associated with this NMCI Services contract?

Primary risk indicators for this contract include potential vendor performance issues, such as failure to meet service level agreements or deliver services on time. Technological obsolescence is another risk, as IT systems can quickly become outdated, requiring continuous updates and investment. Dependence on a single vendor for critical infrastructure can also pose a risk if the vendor experiences financial difficulties or goes out of business. Furthermore, cybersecurity threats targeting the network infrastructure managed under this contract represent a significant and ongoing risk that requires robust mitigation strategies.

How effective has the NMCI program been in providing IT services to the Navy historically?

The effectiveness of the NMCI program is a complex question with a long history. Historically, NMCI aimed to consolidate and standardize IT services across the Navy and Marine Corps to achieve economies of scale and improve efficiency. While it has achieved some successes in standardization and cost savings, it has also faced criticisms regarding implementation challenges, cost overruns in its early stages, and flexibility issues. Evaluating its current effectiveness would involve analyzing recent performance metrics, user satisfaction surveys, and its ability to adapt to evolving technological needs and security threats.

What are the historical spending patterns for NMCI Services or similar IT support contracts within the Department of Defense?

Historical spending on NMCI Services and comparable IT support contracts within the Department of Defense reveals a consistent and substantial investment in maintaining and upgrading military IT infrastructure. Over the years, these expenditures have often run into billions of dollars annually, reflecting the critical role of technology in modern defense operations. Spending patterns are influenced by factors such as technological advancements, evolving security requirements, the number of users supported, and the scope of services provided. Analyzing trends can highlight periods of increased investment due to new initiatives or shifts in strategic priorities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

Address: 1299 PENNSYLVANIA AVE NW STE 475, WASHINGTON, DC, 20004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $60,862,615

Exercised Options: $60,862,615

Current Obligation: $60,862,615

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0020

IDV Type: IDC

Timeline