State Department's $35.8M IT services contract awarded without competition, raising value concerns

Contract Overview

Contract Amount: $35,788,484 ($35.8M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of State

Start Date: 2013-10-18

End Date: 2016-09-27

Contract Duration: 1,075 days

Daily Burn Rate: $33.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $35.8 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OVERSEAS CONTRACT Key points: 1. The contract's value proposition is unclear due to the lack of competitive bidding. 2. Limited competition suggests potential for overpayment and reduced innovation. 3. The contract duration and undefined task orders present execution risks. 4. Performance context is missing, making it difficult to assess service quality. 5. This contract falls within the broader IT services sector, specifically computer-related services. 6. The absence of small business participation is noted.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without competitive data. The $35.8 million awarded over its period of performance, with an undefined task order structure, makes a direct comparison to similar contracts difficult. The lack of competition inherently limits the government's ability to secure the best possible pricing and value for these IT services. Without clear performance metrics or a competitive baseline, it's hard to ascertain if the pricing reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The 'NOT AVAILABLE FOR COMPETITION' designation indicates that only one vendor was considered. This significantly limits price discovery and potentially leads to higher costs for the government compared to a fully competed contract. The absence of multiple bidders means the government did not benefit from the usual pressures of a competitive market to drive down prices and improve service offerings.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the lack of competitive pressure. The government missed an opportunity to leverage market forces to secure a better deal.

Public Impact

The primary beneficiaries are the undisclosed domestic awardees providing IT services. The contract supports the Department of State's operational needs through computer-related services. Geographic impact is likely global, supporting the State Department's overseas operations. Workforce implications include the employment of IT professionals by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about cost-effectiveness and potential overpricing.
Undefined task orders and contract structure introduce execution and oversight risks.
Absence of performance metrics makes it difficult to gauge service quality and contractor accountability.
The sole-source nature limits opportunities for small businesses to participate.

Positive Signals

The contract addresses a specific IT service need for the Department of State.
The award was made to a domestic entity, potentially supporting the U.S. economy.
The contract duration suggests a sustained need for these IT services.

Sector Analysis

This contract falls under the broad category of Information Technology (IT) services, specifically 'Other Computer Related Services' (NAICS 541519). The IT services market is vast and highly competitive, with numerous vendors offering a wide range of solutions. Contracts like this, especially those awarded without competition, represent a significant portion of federal IT spending. Benchmarking against similar sole-source IT contracts is difficult, but the overall federal IT spending is in the tens of billions annually.

Small Business Impact

The contract was not set aside for small businesses, and the awardee information is undisclosed, making it impossible to determine if any small business subcontracting was mandated or occurred. The lack of competition inherently limits opportunities for small businesses to enter into contracts with the government, potentially impacting the small business IT ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. Given the sole-source nature and undefined task orders, robust oversight would be critical to ensure value for money and prevent scope creep. Transparency is limited due to the undisclosed awardee and lack of competitive justification. Inspector General jurisdiction would typically apply to ensure accountability, but specific oversight activities are unknown.

Related Government Programs

Department of State IT Services
Federal IT Consulting Contracts
Sole-Source IT Procurements
Computer Related Services Contracts

Risk Flags

Sole-source award
Lack of competition
Undisclosed awardee
Undefined task orders
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $35.8 million to DOMESTIC AWARDEES (UNDISCLOSED). OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $35.8 million.

What is the period of performance?

Start: 2013-10-18. End: 2016-09-27.

What specific IT services were provided under this contract?

The contract's NAICS code (541519) indicates 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support, including but not limited to IT consulting, systems integration, custom software development, IT project management, and potentially IT infrastructure support. However, without specific details on the task orders issued under this definitive contract, the precise nature and scope of the services delivered remain undisclosed. The Department of State would have defined these services through individual task orders placed against the contract.

Why was this contract awarded on a sole-source basis?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source award. Common justifications for sole-source awards include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Other reasons can include specific research and development needs or when a follow-on contract is required for compatibility with existing systems. Without further documentation from the Department of State, the exact justification for this sole-source award remains unknown, but it implies that a competitive process was deemed impractical or impossible.

What is the track record of the undisclosed contractor for similar services?

As the awardee is undisclosed and the contract was sole-source, specific information regarding the contractor's track record for similar services is not available through this data. Typically, for sole-source awards, the government would have conducted market research or relied on existing knowledge of the contractor's capabilities. However, without knowing the contractor's identity, it is impossible to assess their past performance, client satisfaction, or history of delivering IT services effectively and within budget on other federal contracts or in the private sector.

How does the $35.8 million contract value compare to similar IT services contracts awarded by the Department of State?

Comparing the $35.8 million value is challenging without knowing the specific services rendered and the contract's duration relative to others. However, for IT services, this is a substantial amount, especially for a contract awarded without competition. Federal IT spending is significant, and contracts in the tens of millions are common for large-scale projects or long-term support. The lack of competition makes it difficult to benchmark against competitively awarded contracts, which often yield lower prices. A direct comparison would require identifying similar sole-source contracts for comparable IT services within the Department of State or other agencies.

What are the potential risks associated with a sole-source IT contract of this magnitude?

Sole-source contracts of this magnitude carry several risks. Firstly, the lack of competition can lead to inflated prices and reduced value for money, as the government doesn't benefit from market pressures. Secondly, without competitive benchmarking, it's harder to ensure the services are priced fairly. Thirdly, there's a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially hindering future flexibility. Lastly, the absence of multiple bidders might mean less innovation is introduced compared to a competitive environment where different approaches could be explored.

What oversight mechanisms were in place to ensure accountability and value for this contract?

The provided data does not detail specific oversight mechanisms for this contract. However, for any federal contract, especially one of this value and duration, oversight is typically managed through contract officers, program managers, and potentially contracting officer's representatives (CORs). These individuals are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. For sole-source contracts, robust oversight is even more critical to validate that the services are necessary, performed adequately, and priced appropriately. Transparency regarding these oversight activities is often limited.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,873,484

Exercised Options: $35,788,484

Current Obligation: $35,788,484

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline