DoD's $39.6M NMCI Services contract awarded to HPI Federal LLC for IT support

Contract Overview

Contract Amount: $39,643,233 ($39.6M)

Contractor: HPI Federal LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-01

End Date: 2021-09-30

Contract Duration: 29 days

Daily Burn Rate: $1.4M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NMCI SERVICES - EUHW 09/21

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $39.6 million to HPI FEDERAL LLC for work described as: NMCI SERVICES - EUHW 09/21 Key points: 1. Contract value represents a significant investment in IT infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty but limits flexibility. 4. Short duration of 29 days indicates a specific, potentially short-term need. 5. Focus on Computer Systems Design Services highlights a critical IT function. 6. Awarded by the Department of the Navy, part of the larger DoD. 7. Virginia location suggests a concentration of federal IT operations.

Value Assessment

Rating: fair

The contract value of $39.6 million for a 29-day period is exceptionally high on a daily basis, suggesting either a very complex or a potentially over-priced service for the short term. Without comparable contracts for similar scope and duration, it's difficult to definitively benchmark value. The firm fixed-price nature provides cost certainty, but the high overall cost for a short period warrants scrutiny regarding efficiency and necessity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This method generally promotes a wider range of offers and can lead to better pricing. However, the specific number of bidders is not provided, which would offer further insight into the actual level of competition achieved.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and encourages a broad base of contractors to vie for government work.

Public Impact

Provides essential computer systems design services to the Department of the Navy. Supports the operational readiness and IT infrastructure of the U.S. Navy. Benefits military personnel and civilian staff relying on robust IT systems. Geographic impact is primarily within Virginia, a hub for federal operations. Workforce implications include employment for IT professionals in systems design.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High daily cost for a short-term contract raises questions about efficiency.
Lack of detail on specific services rendered within the 29-day period.
Potential for scope creep or unfulfilled requirements given the short duration.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Firm fixed-price contract provides budget predictability.
Supports critical IT infrastructure for national defense.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services. The federal IT services market is vast, with significant spending across all agencies. This contract, while substantial in total value, is for a short duration, suggesting it may be a specific project or a bridge contract. Benchmarking requires comparison to similar short-term, high-value IT support contracts within the Department of Defense or other federal agencies.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and opportunities for small business participation may be limited unless HPI Federal LLC voluntarily engages them for subcontracting.

Oversight & Accountability

As a delivery order under a larger contract vehicle, oversight would typically be managed by the Department of the Navy contracting officers. Transparency is generally good for awarded contracts, but specific details on performance monitoring and accountability for this short-duration order would require deeper investigation into the contract's management plan.

Related Government Programs

Navy Enterprise Networks Services
Department of Defense IT Modernization Programs
Federal Civilian IT Services Contracts

Risk Flags

High daily cost for short duration
Lack of detailed scope for services
Potential for overpayment given short timeframe

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to HPI FEDERAL LLC. NMCI SERVICES - EUHW 09/21

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 $39.6 million.

What is the period of performance?

Start: 2021-09-01. End: 2021-09-30.

What specific computer systems design services were rendered under this contract?

The provided data indicates the contract is for 'Computer Systems Design Services' (NAICS 541512). However, the specific tasks performed within the 29-day period are not detailed. These services could encompass a wide range of activities, including the design of new computer systems, integration of existing systems, system analysis, and potentially the development of system architecture. Given the short duration and high value, it likely involved critical, time-sensitive design work for a specific Navy IT project or system upgrade. Further details would be found in the contract's statement of work.

How does the daily cost of this contract compare to industry benchmarks for similar IT design services?

The contract value is $39,643,233.24 over 29 days, equating to approximately $1,367,008 per day. This daily rate is exceptionally high for standard IT design services. Industry benchmarks for IT consulting and design services vary widely based on complexity, seniority of staff, and specific technologies involved. However, a daily rate exceeding $1 million per day for a single contractor, even for highly specialized design work, would be considered significantly above average. This suggests the services were either extremely specialized, involved a large team, or potentially indicates an inflated cost for the services rendered. A detailed comparison would require understanding the specific skill sets and deliverables.

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

HPI Federal LLC has been awarded this contract, indicating they are a recognized entity capable of performing government IT services. To assess their track record, one would need to examine their past performance on similar contracts, including client satisfaction, adherence to schedule and budget, and any history of disputes or contract terminations. Information on past performance is often available through government databases like the Contractor Performance Assessment Reporting System (CPARS), which provides ratings from previous government clients. Without access to CPARS or similar performance data, a definitive assessment of HPI Federal LLC's track record is not possible from the provided summary.

What are the potential risks associated with a short-duration, high-value IT services contract?

Short-duration, high-value contracts like this one present several risks. Firstly, there's a risk of inadequate planning and execution due to the compressed timeline, potentially leading to rushed work or missed requirements. Secondly, the high daily cost raises concerns about value for money; if the scope is not precisely defined and managed, taxpayers could be overpaying for services. Thirdly, there's a risk that the contractor may not fully understand the long-term implications of their design work within the Navy's broader IT ecosystem. Finally, if this is a bridge contract, it could indicate underlying issues with the original procurement or planning process, leading to potential disruptions if not managed carefully.

How does this contract fit into the broader spending patterns for NMCI Services or similar Navy IT infrastructure?

The Navy Marine Corps Intranet (NMCI) is a massive, long-term IT services contract managed by a prime vendor (historically, this has been HP Enterprise/NTT Data). Individual delivery orders, like this one awarded to HPI Federal LLC for $39.6 million over 29 days, represent specific taskings or projects executed under the umbrella of the larger NMCI program or related IT support structures. While the total NMCI program is valued in the billions over its lifecycle, this specific order is a relatively small component. Its high daily cost suggests it addresses a critical, specialized need within the broader IT infrastructure support framework, rather than routine operations.

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 › IT AND TELECOM - APLLICATIONS

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: $39,643,233

Exercised Options: $39,643,233

Current Obligation: $39,643,233

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0020

IDV Type: IDC

Timeline