SBA's $53M Enterprise Security Services contract to Zentech awarded via full and open competition

Contract Overview

Contract Amount: $53,087,638 ($53.1M)

Contractor: Zentech

Awarding Agency: Small Business Administration

Start Date: 2017-09-22

End Date: 2023-07-09

Contract Duration: 2,116 days

Daily Burn Rate: $25.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE SECURITY SERVICES "IGF::OT::IGF"

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20416

State: District of Columbia Government Spending

Plain-Language Summary

Small Business Administration obligated $53.1 million to ZENTECH for work described as: ENTERPRISE SECURITY SERVICES "IGF::OT::IGF" Key points: 1. The contract value of $53.1 million over its duration represents a significant investment in enterprise security. 2. Zentech, a small business, secured this contract, highlighting opportunities for smaller firms in specialized IT services. 3. The contract's duration of 2116 days (approx. 5.8 years) suggests a long-term need for these security services. 4. Awarded under a 'Full and Open Competition After Exclusion of Sources' clause, the procurement process warrants closer examination. 5. The fixed-price contract type aims to control costs and provide predictability for the Small Business Administration. 6. The services fall under Computer Systems Design, a critical sector for government operations.

Value Assessment

Rating: fair

Benchmarking the value-for-money for this contract is challenging without detailed service descriptions and performance metrics. The total value of $53.1 million over nearly six years averages to approximately $9.1 million annually. This figure needs to be compared against similar enterprise security service contracts for agencies of the Small Business Administration's size and scope. The firm-fixed-price structure suggests an attempt to manage costs, but the overall value proposition depends heavily on the quality and effectiveness of the delivered security services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific clause indicates that while the competition was intended to be open, certain sources were excluded, suggesting a potential limitation on the breadth of competition. Further details are needed to understand the rationale behind the exclusion of sources and how many bidders were ultimately considered. The level of competition, even if limited, should have provided some price discovery, but the exclusion aspect raises questions about whether the best possible pricing was achieved.

Taxpayer Impact: The exclusion of sources, even if justified, may have limited the number of competitive bids, potentially leading to higher prices for taxpayers than if a truly unrestricted open competition had occurred.

Public Impact

The Small Business Administration (SBA) is the primary beneficiary, receiving enhanced enterprise security services. The contract supports the delivery of critical computer systems design and security services essential for the SBA's operations. Services are geographically focused on the District of Columbia, where the SBA's headquarters are located. The contract likely supports a workforce involved in IT security, potentially including cybersecurity analysts, system administrators, and network engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type requires further investigation to ensure fair market access and optimal pricing.
Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the security services provided.
The long contract duration could lead to vendor lock-in or reduced flexibility if security needs evolve significantly.

Positive Signals

Award to Zentech, a small business, supports the SBA's mission to aid small businesses.
The firm-fixed-price contract type provides cost certainty for the agency.
The contract addresses a critical need for enterprise security within a key federal agency.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and enterprise security. The market for government IT security services is substantial and highly competitive, driven by increasing cyber threats and the digitization of government functions. Comparable spending benchmarks would involve analyzing IT security contracts across various federal agencies, considering factors like contract size, duration, and the specific services procured. The SBA's spending on this contract is a component of the overall federal investment in cybersecurity infrastructure.

Small Business Impact

The award to Zentech, identified as a small business, directly supports the Small Business Administration's mission. This contract serves as an example of how federal agencies can leverage their procurement power to award significant contracts to small businesses. It is important to understand if Zentech intends to utilize small business subcontractors, which would further amplify the positive impact on the small business ecosystem. The success of this contract could encourage other small businesses to pursue similar opportunities within the federal IT security space.

Oversight & Accountability

Oversight for this contract would primarily reside with the Small Business Administration's contracting officers and program managers responsible for IT services. The contract's duration and value suggest that regular performance reviews and audits would be necessary. Transparency is facilitated by the public nature of contract awards, but detailed operational oversight information is typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or reported.

Related Government Programs

Federal Cybersecurity Initiatives
Small Business IT Services Procurement
Enterprise IT Management Contracts
Computer Systems Design Services

Risk Flags

Limited competition due to source exclusion.
Potential for cost overruns if scope creeps or performance is suboptimal.
Dependence on a single contractor for critical security services.

Frequently Asked Questions

What is this federal contract paying for?

Small Business Administration awarded $53.1 million to ZENTECH. ENTERPRISE SECURITY SERVICES "IGF::OT::IGF"

Who is the contractor on this award?

The obligated recipient is ZENTECH.

Which agency awarded this contract?

Awarding agency: Small Business Administration (Small Business Administration).

What is the total obligated amount?

The obligated amount is $53.1 million.

What is the period of performance?

Start: 2017-09-22. End: 2023-07-09.

What specific enterprise security services are being provided under this contract?

The contract, identified by NAICS code 541512 (Computer Systems Design Services), indicates a broad scope of potential services. These could include network security, cybersecurity monitoring, vulnerability assessments, incident response, security policy development, and implementation of security controls. Without more specific details from the contract's statement of work, it is difficult to pinpoint the exact services. However, the term 'Enterprise Security Services' suggests a comprehensive approach to protecting the SBA's IT infrastructure and data across its operations.

How does Zentech's past performance compare to other potential bidders for this contract?

Assessing Zentech's past performance requires access to their contract history, client feedback, and any performance evaluations from previous government contracts. As a small business, Zentech may have a less extensive track record compared to larger, established federal contractors. However, agencies often have specific criteria for evaluating past performance, which may include the size and complexity of previous projects, demonstrated technical capabilities, and adherence to schedule and budget. A thorough review would involve examining any performance data available through federal procurement databases or agency records to understand how Zentech measured up against the requirements and potentially against other bidders.

What is the risk associated with the 'Full and Open Competition After Exclusion of Sources' award type?

The 'Full and Open Competition After Exclusion of Sources' award type presents a moderate risk. While it aims for open competition, the exclusion of specific sources inherently limits the pool of potential bidders. The risk lies in understanding the justification for these exclusions. If the exclusions were arbitrary or not based on legitimate technical or capability requirements, it could lead to reduced competition, potentially higher costs for the government, and a perception of unfairness. Conversely, if the exclusions were well-reasoned (e.g., based on unique capabilities or prior successful performance in a niche area), the risk might be mitigated. Transparency regarding the reasons for exclusion is key to assessing this risk.

How does the annual spending on this contract compare to the SBA's overall IT budget?

The total contract value is approximately $53.1 million over a period of 2116 days (roughly 5.8 years). This averages to about $9.1 million per year. To compare this to the SBA's overall IT budget, one would need access to the SBA's annual IT budget reports. This figure represents a significant portion of spending if the SBA's total IT budget is in the tens of millions, but a smaller fraction if the budget is in the hundreds of millions or billions. Without the SBA's specific IT budget data, a precise comparison of its significance is not possible, but it clearly represents a substantial investment in a critical service area.

What are the potential long-term implications of this contract for Zentech and the cybersecurity market?

For Zentech, this contract represents a significant opportunity for growth, revenue generation, and building a strong track record within the federal government, particularly within the SBA. Successfully executing this contract could position Zentech for future, larger opportunities in the federal cybersecurity space. For the broader cybersecurity market, this contract underscores the continued demand for specialized IT security services from federal agencies. It also highlights the role of small businesses in fulfilling these critical needs, potentially encouraging further innovation and competition among smaller firms aiming to secure similar government contracts.

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

Solicitation ID: SBAHQ-17-R-0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Zentech LLC

Address: 8045 LEESBURG PIKE, SUITE 200, VIENNA, VA, 22182

Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, SBA Certified 8 a Joint Venture, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $53,087,638

Exercised Options: $53,087,638

Current Obligation: $53,087,638

Actual Outlays: $37,260,363

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS06F1257Z

IDV Type: GWAC

Timeline