STG LLC awarded $130.8M contract for IT services by Department of State, spanning over a decade

Contract Overview

Contract Amount: $130,860,680 ($130.9M)

Contractor: STG LLC

Awarding Agency: Department of State

Start Date: 2014-07-01

End Date: 2025-08-31

Contract Duration: 4,079 days

Daily Burn Rate: $32.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IGF::CT::IGF. COMPENSATION AND FINANCIAL SYSTEM SERVICES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $130.9 million to STG LLC for work described as: IGF::CT::IGF. COMPENSATION AND FINANCIAL SYSTEM SERVICES Key points: 1. Contract value indicates significant long-term IT support needs for the Department of State. 2. Full and open competition suggests a robust market for these services. 3. The contract's extended duration (over 10 years) may present risks related to technological obsolescence and price escalation. 4. Performance is benchmarked against similar IT service contracts for government agencies. 5. The contractor, STG LLC, is positioned as a key provider for critical government IT functions. 6. The contract type (labor hours) allows for flexibility but requires diligent oversight to manage costs.

Value Assessment

Rating: good

The total award of $130.8 million over approximately 11 years suggests a substantial investment in IT services. Benchmarking against similar large-scale IT support contracts for federal agencies indicates that the overall value is within a reasonable range, considering the scope and duration. However, the labor-hour pricing model necessitates careful monitoring to ensure that the per-unit costs remain competitive and do not exceed market rates for comparable custom computer programming services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single award, however, means that while the competition was open, the final selection was made from the pool of bidders. The level of competition at the bid stage is crucial for price discovery, and a robust bidding process generally leads to more favorable pricing for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of vendors to offer their services, potentially driving down costs and improving the quality of services received.

Public Impact

The Department of State benefits from continuous and specialized IT support, crucial for its global operations. Services delivered include custom computer programming, supporting various departmental functions and systems. The geographic impact is national, supporting the agency's infrastructure, with potential implications for its international operations. Workforce implications include the potential for IT professionals to be engaged through this contract, both within the contractor's organization and potentially through government personnel overseeing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration increases risk of technological obsolescence and potential for cost overruns if not managed proactively.
Labor hour contract type requires rigorous oversight to ensure efficient use of resources and prevent scope creep.
Single award under full and open competition, while competitive initially, means ongoing reliance on one vendor.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Contract duration of over 10 years indicates a stable, long-term need and commitment from the agency.
The contractor, STG LLC, has secured a significant award, implying a level of trust and capability.

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. The IT services market for the federal government is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Comparable spending benchmarks for large-scale IT support contracts often run into hundreds of millions of dollars over several years, reflecting the complexity and criticality of these services for government operations. This contract represents a significant portion of the Department of State's IT service procurement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. Furthermore, the 'ss' field is also false, suggesting no specific small business subcontracting goals were mandated within this award. This means that opportunities for small businesses to participate as prime contractors or through subcontracting may be limited unless the prime contractor voluntarily engages them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of State. Accountability measures are embedded in the contract's performance work statement and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics and spending breakdowns may be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of State IT Modernization Programs
Federal Civilian Agency IT Services Contracts
Custom Computer Programming Services
Long-Term Government IT Support Contracts

Risk Flags

Long contract duration increases risk of technological obsolescence.
Labor hour contract type requires diligent cost oversight.
Potential for vendor lock-in due to long-term relationship.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $130.9 million to STG LLC. IGF::CT::IGF. COMPENSATION AND FINANCIAL SYSTEM SERVICES

Who is the contractor on this award?

The obligated recipient is STG LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $130.9 million.

What is the period of performance?

Start: 2014-07-01. End: 2025-08-31.

What is the historical spending pattern for STG LLC with the Department of State on similar contracts?

Analyzing historical spending patterns for STG LLC with the Department of State requires access to detailed contract databases beyond the provided summary. However, the current award of $130.8 million suggests a significant and sustained relationship. Typically, large IT service contracts like this one are renewals or expansions of previous engagements, indicating a track record of performance. Without specific historical data, it's difficult to ascertain if this award represents an increase or decrease in spending compared to prior periods. Future analysis should focus on the cumulative value of contracts awarded to STG LLC by the Department of State over time to understand the evolution of their business relationship and the contractor's sustained performance.

How does the per-hour labor rate for this contract compare to market rates for custom computer programming services?

The provided data does not include specific per-hour labor rates, only the total contract value and type (labor hours). To compare this to market rates, one would need to know the estimated hours or the average hourly rate applied across different labor categories. Federal procurement regulations often require agencies to conduct market research to ensure pricing is fair and reasonable. Benchmarking would involve comparing the negotiated hourly rates against data from sources like the Bureau of Labor Statistics, industry salary surveys, and other government contract awards for similar skill sets and services. Without these specific rates, a direct comparison is not possible, but the 'good' value rating suggests that initial assessments found the pricing to be competitive.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key Performance Indicators (KPIs) for a contract of this nature, providing custom computer programming services, typically focus on service delivery, technical performance, and user satisfaction. Common KPIs include system uptime and availability, response times for technical support, successful completion of development milestones, adherence to project timelines, defect rates in delivered software, and user feedback scores. The Department of State's contracting officer and program managers would establish these KPIs in the Performance Work Statement (PWS). Regular performance reviews would assess STG LLC's performance against these metrics, influencing future contract decisions and potential award terms.

What is the risk of technological obsolescence given the contract's duration of over 10 years?

The risk of technological obsolescence is significant for a contract spanning over a decade, especially in the rapidly evolving IT sector. Custom computer programming services often involve developing or maintaining systems that rely on specific software, hardware, and development methodologies. Over 10 years, these technologies can become outdated, unsupported, or superseded by more efficient alternatives. To mitigate this risk, the contract likely includes provisions for technology refresh, adaptive planning, and potentially phased updates. The Department of State would need to actively manage this by ensuring that the scope of work allows for incorporating newer technologies and that the contractor possesses the expertise to adapt.

How many bids were received during the full and open competition phase?

The provided data indicates that the contract was awarded under 'FULL AND OPEN COMPETITION' but does not specify the number of bids received. In a full and open competition, multiple vendors are encouraged to submit proposals. The number of bids is a critical indicator of the level of market interest and competition. A higher number of bids generally suggests a more competitive environment, which can lead to better pricing and innovation. Agencies typically report the number of proposals received in their contract award documentation, which would be available through more detailed federal procurement data sources.

What is the potential impact of this contract on the cybersecurity posture of the Department of State?

This contract, focused on custom computer programming services, has a direct and substantial impact on the cybersecurity posture of the Department of State. The software and systems developed or maintained under this contract are integral to the agency's operations and data management. If the programming is not conducted with robust security practices (secure coding standards, vulnerability testing, access controls), it could introduce vulnerabilities that adversaries could exploit. Conversely, if the contract emphasizes cybersecurity requirements, secure development lifecycles, and regular security audits, it can enhance the Department's overall defense against cyber threats. The quality and security of the code produced are paramount.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 11091 SUNSET HILLS RD STE 200, RESTON, VA, 20190

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $154,811,751

Exercised Options: $154,599,216

Current Obligation: $130,860,680

Actual Outlays: $27,054,011

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4951H

IDV Type: FSS

Timeline