DoD's $34.6M computer hardware contract with HP INC. awarded under full and open competition

Contract Overview

Contract Amount: $34,579,817 ($34.6M)

Contractor: HP Inc.

Awarding Agency: Department of Defense

Start Date: 2006-08-15

End Date: 2009-09-10

Contract Duration: 1,122 days

Daily Burn Rate: $30.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: IT

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $34.6 million to HP INC. for work described as: Key points: 1. Contract awarded for computer hardware, indicating a need for IT equipment within the Defense Logistics Agency. 2. The fixed-price incentive contract type suggests a focus on cost control while incentivizing performance. 3. Awarded to a single vendor, HP INC., highlighting potential vendor concentration in IT hardware supply. 4. The contract duration of 1122 days (approx. 3 years) points to a significant, long-term IT equipment requirement. 5. The contract was awarded in 2006, providing historical context for IT procurement practices at the time. 6. The 'MD' (Maryland) state code suggests a primary performance location or administrative hub within the state.

Value Assessment

Rating: fair

Benchmarking the value of this $34.6 million contract from 2006 is challenging without more specific details on the hardware procured and current market rates. However, the fixed-price incentive structure implies an effort to manage costs, though the final price could vary based on performance. Comparing it to similar large-scale IT hardware procurements from that era would provide better context for value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit offers. The fact that it resulted in an award to a single vendor, HP INC., suggests that despite open competition, HP was the most advantageous offer. The number of bidders is not specified, but open competition generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing and terms by allowing a wide range of vendors to compete.

Public Impact

The Department of Defense benefits from the acquisition of necessary computer hardware to support its operations. Military personnel and civilian staff likely benefit from updated or maintained computing capabilities. The contract supports the Defense Logistics Agency's mission to provide logistical support to the U.S. Armed Forces. The primary geographic impact is likely within Maryland, where the contract's state code 'MD' is indicated.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific HP hardware and software ecosystems were mandated.
Risk of price escalation if the 'incentive' component was not effectively structured or monitored.
Dependence on a single supplier for critical IT hardware could pose supply chain risks.
Aging technology by the end of the contract term (awarded 2006) may have led to performance or compatibility issues.

Positive Signals

Awarded through full and open competition, suggesting a competitive process to secure the best value.
Fixed-price incentive contract type aims to balance cost and performance, potentially leading to efficiencies.
The contract duration indicates a stable supply of necessary IT equipment over a significant period.
Procurement by the Defense Logistics Agency suggests adherence to established logistical and procurement protocols.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer hardware procurement. The market for IT hardware is vast and highly competitive, with numerous manufacturers and resellers. Contracts of this size are common for large government agencies like the Department of Defense, which have substantial and ongoing needs for computing infrastructure. Benchmarking would involve comparing pricing and terms against other large government IT hardware awards from the mid-2000s.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While HP INC. is a large corporation, there is no information provided on subcontracting plans. Without specific set-aside goals or reporting, the direct impact on the small business IT ecosystem is unclear, though large prime contracts can sometimes indirectly benefit small businesses through subcontracting opportunities if pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Logistics Agency's contracting and program management offices. As a Department of Defense contract, it would also be subject to oversight by the Department of Defense Inspector General. Transparency is generally maintained through contract award databases, but specific performance metrics and detailed spending breakdowns might be less publicly accessible for contracts awarded over a decade ago.

Related Government Programs

Defense Logistics Agency IT Hardware Procurement
Department of Defense Computer Systems Acquisition
Federal IT Equipment Contracts
Fixed Price Incentive Contracts
Large Scale IT Infrastructure Procurement

Risk Flags

Contract awarded in 2006; technology may be outdated.
Single vendor award could indicate limited competition despite 'full and open' designation.
Fixed Price Incentive contracts require careful monitoring to ensure value.
Lack of small business set-aside details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to HP INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HP INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $34.6 million.

What is the period of performance?

Start: 2006-08-15. End: 2009-09-10.

What specific types of computer hardware were procured under this contract, and how did their specifications align with DoD requirements in 2006?

The provided data indicates the contract was for 'Computer and Software Stores' (nd: 443120), suggesting a broad category of IT hardware. Without access to the contract's detailed statement of work or line item descriptions, the specific types of hardware (e.g., desktops, laptops, servers, peripherals) remain unknown. However, given the awarding agency (Department of Defense) and the era (awarded 2006), the hardware likely included standard enterprise-grade computing equipment necessary for military and administrative functions. DoD requirements in 2006 would have focused on reliability, security features relevant to military networks, and compatibility with existing DoD IT infrastructure, potentially including Windows XP or early Vista operating systems and associated software.

How did the pricing of this contract compare to market rates for similar computer hardware in 2006?

Directly comparing the $34.6 million total award value to specific market rates from 2006 is difficult without knowing the exact quantity and configuration of hardware purchased. However, government procurement vehicles often aim for competitive pricing through bulk purchasing and established relationships. The 'full and open competition' award type suggests that the government sought the best value available. To assess pricing accurately, one would need to benchmark unit costs against contemporaneous GSA schedules, other agency procurements for similar items, or commercial price lists from major vendors like HP during that period. The fixed-price incentive structure also means the final cost could deviate from initial estimates based on performance outcomes.

What were the key performance metrics and incentive structures within this Fixed Price Incentive (FPI) contract?

The data specifies the contract type as 'FIXED PRICE INCENTIVE' (pt: FIXED PRICE INCENTIVE). In an FPI contract, the final price is adjusted based on the contractor's performance relative to established targets for cost and schedule or other metrics. While the specific performance metrics are not detailed in the provided summary, they typically relate to delivery schedules, product quality, or service levels. The incentive structure would have defined how deviations from target cost or performance levels would affect the final price paid to HP INC., aiming to motivate the contractor to achieve specific objectives while providing the government with a degree of cost certainty and potential savings if targets are exceeded.

What is the historical spending trend for computer hardware by the Defense Logistics Agency (DLA) around the period of this contract (2006-2009)?

Analyzing the historical spending trend for computer hardware by the DLA around 2006-2009 requires access to broader DLA procurement data. This specific $34.6 million contract represents a significant, but isolated, data point. Generally, the DLA, as a major logistics provider for the DoD, would have consistent and substantial spending on IT hardware to support its vast operations and the forces it equips. Spending patterns would likely fluctuate based on modernization cycles, specific military campaigns, and overall defense budgets. To understand the trend, one would need to examine DLA's IT procurement expenditures over several years, looking for patterns in contract values, types of hardware procured, and primary vendors.

What was HP INC.'s track record with the Department of Defense prior to or during this contract award?

HP INC. (Hewlett-Packard) has historically been a major supplier of IT hardware and services to the U.S. government, including the Department of Defense. Prior to and during the 2006-2009 period of this contract, HP was a leading vendor in the enterprise computing market. Their track record with the DoD would likely include numerous other contracts for various IT equipment, potentially ranging from individual workstations to large server infrastructure and networking components. Assessing their specific performance on this $34.6 million contract would require reviewing performance reports, any contract modifications, and feedback mechanisms associated with this particular award, which are not detailed in the summary data.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

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: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc. (UEI: 009122532)

Address: 6600 ROCKLEDGE DR STE 150, BETHESDA, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,115,072

Exercised Options: $14,115,072

Current Obligation: $34,579,817

Parent Contract

Parent Award PIID: GS35F4663G

IDV Type: FSS

Timeline