DoD's $12.6M Hazardous Material Management System contract awarded to Sphera Solutions, Inc. without competition

Contract Overview

Contract Amount: $12,648,691 ($12.6M)

Contractor: Sphera Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-03-01

End Date: 2026-02-28

Contract Duration: 364 days

Daily Burn Rate: $34.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HAZARDOUS MATERIAL MANAGEMENT SYSTEM (HMMS) SUSTAINMENT SUPPORT

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to SPHERA SOLUTIONS, INC. for work described as: HAZARDOUS MATERIAL MANAGEMENT SYSTEM (HMMS) SUSTAINMENT SUPPORT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract duration is one year, suggesting a need for ongoing support. 3. This is a delivery order under a larger contract, implying a pre-existing relationship. 4. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services. 5. The contract is not competitively bid, raising questions about potential cost savings. 6. The awardee, Sphera Solutions, Inc., has secured this significant federal contract.

Value Assessment

Rating: questionable

Benchmarking the value of this $12.6 million contract is challenging without comparable sole-source awards for similar sustainment support. The firm-fixed-price structure provides cost certainty for the government, but the lack of competition prevents a direct comparison of pricing against market alternatives. Without a competitive process, it's difficult to ascertain if the government received the best possible value for these custom computer programming services.

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 among multiple vendors. This approach typically occurs when a specific vendor possesses unique capabilities or when the need arises unexpectedly and cannot be fulfilled through a competitive process within the required timeframe. The absence of competition limits the government's ability to leverage market forces to drive down costs and ensure the most innovative solutions are considered.

Taxpayer Impact: Taxpayers may not benefit from potential cost savings that could have been achieved through a competitive bidding process. The lack of competition also reduces transparency in pricing and service delivery.

Public Impact

The Department of Defense benefits from continued sustainment support for its Hazardous Material Management System. This contract ensures the ongoing functionality and maintenance of a critical IT system for managing hazardous materials. The services delivered are primarily IT-related, focusing on custom computer programming and system sustainment. The geographic impact is likely nationwide within DoD facilities that utilize the HMMS. The workforce implications are centered around the IT professionals at Sphera Solutions, Inc. responsible for system maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit innovation by excluding potential new vendors.
Dependence on a single vendor for critical system sustainment poses a risk.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Awardee has secured a significant contract, indicating potential capability.
One-year duration allows for reassessment of needs and competition in the future.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and sustainment. The federal IT services market is vast, with significant spending on software development, maintenance, and support for mission-critical systems. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for IT sustainment services within defense agencies, which often require specialized knowledge and security clearances, potentially justifying higher costs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to Sphera Solutions, Inc., a presumably larger entity, suggests that subcontracting opportunities for small businesses are not explicitly mandated within this specific award. The impact on the small business ecosystem is neutral to negative, as there is no direct allocation of work to small businesses through this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, requiring the delivery of specified sustainment services. Transparency is limited due to the sole-source nature of the award; however, contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD IT Modernization Programs
Defense Logistics Agency IT Support Contracts
Hazardous Material Information Systems
Custom Software Development Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to SPHERA SOLUTIONS, INC.. HAZARDOUS MATERIAL MANAGEMENT SYSTEM (HMMS) SUSTAINMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is SPHERA SOLUTIONS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.6 million.

What is the period of performance?

Start: 2025-03-01. End: 2026-02-28.

What is the track record of Sphera Solutions, Inc. in performing similar hazardous material management system sustainment contracts for the federal government?

Sphera Solutions, Inc. has a history of providing software and services related to environmental, social, and governance (ESG) and operational risk management. While specific details on their track record with the DoD's Hazardous Material Management System (HMMS) sustainment are not explicitly detailed in the provided data, their broader expertise in managing complex data systems and regulatory compliance suggests a relevant capability. Further investigation into their past performance on similar federal contracts, particularly those involving sustainment of critical IT infrastructure and adherence to stringent government security protocols, would be necessary to fully assess their suitability and past performance effectiveness. Reviewing past performance evaluations and any contract awards for similar services would provide a clearer picture of their reliability and success in meeting government requirements.

How does the $12.6 million cost for one year of sustainment compare to industry benchmarks for similar IT systems?

Benchmarking the $12.6 million cost for one year of sustainment for the Hazardous Material Management System (HMMS) is challenging without detailed knowledge of the system's complexity, user base, and specific sustainment requirements. However, for large-scale, mission-critical IT systems within the federal government, annual sustainment costs can range significantly, often representing a substantial portion of the total cost of ownership. Factors influencing this cost include the level of customization, the criticality of uptime, the need for specialized security, and the scope of support (e.g., 24/7 support, patch management, upgrades). Given that this is a sole-source award for custom computer programming services, the price may reflect unique expertise or proprietary elements. A comprehensive benchmark would require comparing it to similar sole-source sustainment contracts for comparable DoD systems or, ideally, to competitively bid contracts for similar services to gauge market competitiveness.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with awarding this $12.6 million contract on a sole-source basis include potential overpayment due to the lack of competitive pressure, which could lead to suboptimal value for taxpayer dollars. There is also a risk of reduced innovation, as the government does not benefit from the diverse solutions and approaches that multiple bidders might offer. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future if performance issues arise or better alternatives become available. Dependence on a single vendor for critical system sustainment also increases vulnerability if that vendor experiences financial difficulties, operational disruptions, or decides to exit the market.

What is the historical spending pattern for the Hazardous Material Management System (HMMS) sustainment support?

The provided data indicates a new award of $12,648,691.46 for the period of 2025-02-28 to 2026-02-28. This represents the current spending for this specific contract. To understand historical spending patterns, one would need to access historical contract data for the HMMS sustainment support. This would involve searching federal procurement databases (like FPDS or USASpending) for previous awards related to HMMS sustainment, identifying the awardees, contract values, durations, and the nature of the services provided. Analyzing this historical data would reveal trends in spending, whether the system has consistently required significant sustainment funding, and if the support has been awarded competitively or through sole-source actions in the past. Without this historical context, it's difficult to assess if the current $12.6 million award is an increase, decrease, or consistent with past expenditures.

What are the implications of the firm-fixed-price contract type for cost control and risk management?

A firm-fixed-price (FFP) contract type is generally favored by the government for its cost control and predictability. Under an FFP contract, the contractor agrees to a set price for a defined scope of work, and is responsible for managing their costs to achieve profitability. This shifts the risk of cost overruns from the government to the contractor. For the government, this means the total cost of the contract is known upfront, simplifying budgeting and financial planning. It also incentivizes the contractor to perform efficiently to maximize their profit margin. However, if the scope of work significantly changes, a contract modification would be necessary, potentially leading to price adjustments. For this $12.6 million contract, the FFP structure provides clear cost certainty for the sustainment of the HMMS.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 130 E RANDOLPH ST STE 2900, CHICAGO, IL, 60601

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,648,691

Exercised Options: $12,648,691

Current Obligation: $12,648,691

Actual Outlays: $2,331,878

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470121D0002

IDV Type: IDC

Timeline