State Department's $257M IT Help Desk Contract Awarded to Digital Management LLC Shows Fair Competition
Contract Overview
Contract Amount: $257,357,477 ($257.4M)
Contractor: Digital Management LLC
Awarding Agency: Department of State
Start Date: 2012-06-01
End Date: 2020-11-30
Contract Duration: 3,104 days
Daily Burn Rate: $82.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 10
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF "VANGUARD 2.1" IT HELP DESK AND DESKTOP SUPPORT SERVICES.
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520
Plain-Language Summary
Department of State obligated $257.4 million to DIGITAL MANAGEMENT LLC for work described as: IGF::CT::IGF "VANGUARD 2.1" IT HELP DESK AND DESKTOP SUPPORT SERVICES. Key points: 1. Contract value of over $257 million over its period of performance. 2. Digital Management LLC, the sole awardee, has a significant track record with federal agencies. 3. The contract was awarded under full and open competition, indicating a competitive bidding process. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The contract duration spans over 8 years, suggesting a long-term need for these services. 6. The services provided are critical for the day-to-day operations of the State Department's IT infrastructure.
Value Assessment
Rating: good
The contract's total value of $257.4 million over approximately 8 years averages to about $32 million annually. While specific benchmarks for IT help desk and desktop support services at this scale are difficult to ascertain without granular data on service levels and scope, the firm fixed-price nature suggests that the contractor bears the risk of cost overruns. Comparing this to other large-scale IT support contracts, the pricing appears within a reasonable range for comprehensive support across a large federal agency, assuming the scope of services is met effectively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which is a specific type of full and open competition. This indicates that the solicitation was made available to all responsible sources, and any responsible source was permitted to submit an offer. The fact that there were 10 offers received suggests a healthy level of competition for this significant IT support contract. A competitive process like this generally leads to better price discovery and potentially more innovative solutions.
Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers as it likely drove down costs through bidding and ensured the government received competitive pricing for essential IT services.
Public Impact
Provides essential IT help desk and desktop support services to employees of the Department of State. Ensures the smooth functioning of computer systems and networks, enabling diplomatic and operational activities. Supports a large federal workforce, likely impacting thousands of employees across various locations. Contributes to the operational readiness and efficiency of the U.S. Department of State's global mission.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to potential complacency or reduced innovation over time if not managed actively.
- Reliance on a single contractor for critical IT support creates vendor lock-in risks.
- Scope creep could lead to cost increases if not carefully managed, despite the firm fixed-price structure.
Positive Signals
- Firm Fixed Price contract type shifts cost risk to the contractor.
- Full and open competition with 10 offers suggests a robust market response.
- Digital Management LLC's experience with federal contracts indicates a level of established capability.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a significant segment of the IT services industry. The market for IT support and managed services for federal agencies is substantial, driven by the continuous need to maintain and upgrade complex technological infrastructures. Federal spending in this area is consistently high, with agencies like the Department of State requiring robust support to manage their global operations. This contract represents a significant portion of spending for IT support services within the agency.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded through full and open competition, it is likely that larger prime contractors like Digital Management LLC would be responsible for managing subcontracting opportunities. The extent to which small businesses are included in the subcontracting plan is not detailed in this data but is a crucial aspect for assessing the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of State. The firm fixed-price nature of the contract provides a degree of accountability by placing cost risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Department of State IT Modernization Programs
- Federal Civilian Agency IT Support Services
- General Services Administration (GSA) IT Schedule Contracts
- Department of Defense IT Help Desk Services
Risk Flags
- Potential for scope creep in long-term contracts.
- Reliance on a single vendor for critical services.
- Need for robust contract oversight to ensure performance and value.
Tags
it-services, help-desk, desktop-support, department-of-state, firm-fixed-price, full-and-open-competition, digital-management-llc, large-contract, it-outsourcing, federal-contract, district-of-columbia
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $257.4 million to DIGITAL MANAGEMENT LLC. IGF::CT::IGF "VANGUARD 2.1" IT HELP DESK AND DESKTOP SUPPORT SERVICES.
Who is the contractor on this award?
The obligated recipient is DIGITAL MANAGEMENT LLC.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $257.4 million.
What is the period of performance?
Start: 2012-06-01. End: 2020-11-30.
What is the track record of Digital Management LLC with federal IT support contracts?
Digital Management LLC (DMI) has a substantial history of performing IT support and services for various federal agencies. Their portfolio includes contracts for help desk support, desktop management, cybersecurity, and cloud services. DMI has been a recipient of numerous federal contracts, indicating a proven ability to navigate federal procurement processes and deliver services. Their experience often involves large-scale, complex IT environments similar to that of the Department of State. Analyzing their past performance on similar contracts, including client satisfaction and adherence to schedules and budgets, would provide further insight into their capabilities for this specific award.
How does the value of this contract compare to similar IT support contracts at the Department of State or other large federal agencies?
The total contract value of $257.4 million over approximately 8 years, averaging around $32 million annually, places this contract within the upper tier of IT support services for large federal agencies. Benchmarking this against similar contracts requires detailed analysis of scope, service level agreements (SLAs), and the number of users supported. However, for a department with the global reach and complexity of the State Department, this annual spend is not unusual for comprehensive IT help desk and desktop support. Contracts for agencies like the Department of Defense or Homeland Security with similar IT footprints often fall within this range or higher, depending on specific requirements and service offerings.
What are the primary risks associated with a long-term, firm-fixed-price IT support contract like this?
A primary risk with long-term, firm-fixed-price (FFP) contracts is the potential for scope creep, where the requirements may expand beyond the original agreement, leading to disputes or the need for contract modifications. While FFP shifts cost risk to the contractor, it can also disincentivize innovation if the contractor focuses solely on meeting minimum requirements to control costs. Another risk is vendor lock-in, where the agency becomes heavily reliant on the incumbent contractor, making it difficult and costly to switch providers in the future. Ensuring robust contract management, clear definition of services, and regular performance reviews are crucial to mitigate these risks.
How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring value for taxpayers?
The 'Full and Open Competition After Exclusion of Sources' method, while a form of full and open competition, requires careful justification for excluding specific sources. When properly executed and justified, it can still lead to competitive pricing and value for taxpayers by allowing all responsible sources to compete. However, the 'exclusion of sources' aspect necessitates scrutiny to ensure it doesn't unduly limit competition. In this case, with 10 offers received, it suggests that the exclusion did not significantly hinder market participation. The key to taxpayer value lies in the agency's ability to define requirements clearly and evaluate proposals effectively to select the best overall value, not just the lowest price.
What are the implications of this contract for the IT workforce at the Department of State?
This contract primarily impacts the IT workforce by outsourcing help desk and desktop support functions. This means that many of the personnel performing these direct support roles are likely employed by Digital Management LLC, rather than being direct federal employees. While this can provide flexibility and access to specialized skills, it also means that the government may have less direct control over the training, development, and management of this segment of its IT workforce. Federal employees may shift to higher-level IT strategy, management, or specialized technical roles, while the day-to-day support is handled by the contractor's staff.
What is the historical spending trend for IT help desk and desktop support at the Department of State?
Analyzing historical spending trends for IT help desk and desktop support at the Department of State would require access to detailed historical contract data. However, it is reasonable to assume that spending in this area has been substantial and likely consistent over the years, given the ongoing need for these services. Factors such as the number of employees, the complexity of the IT environment, and the adoption of new technologies would influence year-over-year spending. The transition from previous contracts to this new award, valued at $257.4 million over its period, suggests a sustained investment in maintaining robust IT support capabilities.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 10
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6550 ROCK SPRING DR FLR 7, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $263,197,844
Exercised Options: $257,357,477
Current Obligation: $257,357,477
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS06F0617Z
IDV Type: GWAC
Timeline
Start Date: 2012-06-01
Current End Date: 2020-11-30
Potential End Date: 2020-11-30 00:00:00
Last Modified: 2022-04-12
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