DoD's $31.8M contract for IT sustainment awarded to Rainbow Data Systems, Inc. with 117 bids

Contract Overview

Contract Amount: $31,842,251 ($31.8M)

Contractor: Rainbow Data Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-12-15

End Date: 2026-12-14

Contract Duration: 1,095 days

Daily Burn Rate: $29.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 117

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GEX CORE SUSTAINMENT (CTA)

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.8 million to RAINBOW DATA SYSTEMS, INC. for work described as: GEX CORE SUSTAINMENT (CTA) Key points: 1. The contract value of $31.8 million over three years represents a significant investment in IT sustainment. 2. Strong competition with 117 bids suggests a healthy market for these services, potentially driving competitive pricing. 3. The firm-fixed-price contract type shifts performance risk to the contractor. 4. The 'Other Computer Related Services' NAICS code indicates a broad scope of potential IT support. 5. The contract's duration of 1095 days aligns with typical sustainment cycles for IT systems. 6. The award to Rainbow Data Systems, Inc. warrants examination of their past performance and capacity. 7. The Defense Logistics Agency's role highlights the critical nature of IT support for military operations.

Value Assessment

Rating: good

The contract's total value of $31.8 million over three years averages approximately $10.6 million annually. Benchmarking this against similar IT sustainment contracts within the Department of Defense is crucial. Given the firm-fixed-price structure and the high level of competition, the pricing is likely competitive. However, without specific details on the services rendered, a precise value-for-money assessment is challenging. The bid count of 117 suggests a robust market, which typically leads to more favorable pricing for the government.

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 bids. The exceptionally high number of 117 bids received is a strong positive signal for competition. This level of interest suggests that the market is robust and that the government received a wide range of proposals, increasing the likelihood of securing a competitive price and optimal solution.

Taxpayer Impact: The extensive competition ensures that taxpayer dollars are being used efficiently, as multiple companies vied to offer the best value. This reduces the risk of overpayment and encourages contractors to provide high-quality services at a reasonable cost.

Public Impact

The Department of Defense benefits from enhanced IT sustainment, ensuring operational readiness. Military personnel and support staff will have access to reliable and maintained IT systems. The contract supports the Defense Logistics Agency's mission to provide logistical support to the armed forces. The IT services delivered are critical for the functioning of various defense operations. The contract has implications for the IT services workforce, potentially creating or sustaining jobs within the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Scope creep risk due to broad 'Other Computer Related Services' NAICS code.
Potential for cost overruns if not managed tightly, despite fixed-price structure.
Dependence on a single contractor for critical IT sustainment functions.
Ensuring Rainbow Data Systems, Inc. has the capacity to deliver on all aspects of the contract.
Cybersecurity risks associated with IT sustainment services.

Positive Signals

High level of competition (117 bids) suggests strong market interest and potential for value.
Firm-fixed-price contract type transfers significant performance risk to the contractor.
Awarded by the Defense Logistics Agency, indicating alignment with critical defense needs.
Contract duration of three years allows for stable sustainment planning.
Clear performance period (December 15, 2023 - December 14, 2026).

Sector Analysis

The IT services sector is a vast and dynamic market. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide array of IT support functions beyond custom programming or network management. The federal government is a significant consumer of these services, with spending often concentrated within defense and intelligence agencies. Comparable spending benchmarks would typically involve analyzing other large-scale IT sustainment contracts awarded by agencies like the DoD, NASA, or DHS, looking at per-year costs and scope of services.

Small Business Impact

This contract was not set aside for small businesses, as indicated by `sb: false`. The large contract value and the nature of IT sustainment services often lend themselves to larger prime contractors. However, it is possible that Rainbow Data Systems, Inc. may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract will primarily be managed by the contracting officers and program managers within the Defense Logistics Agency. The firm-fixed-price nature of the contract provides a degree of accountability by tying payment to performance. Transparency is generally maintained through contract award databases and public reporting mechanisms. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Defense IT Modernization Programs
DoD Enterprise IT Services
Logistics IT Support Contracts
IT Services for Military Readiness
Computer Systems Design Services

Risk Flags

High number of bids indicates strong competition, potentially leading to better value.
Firm-fixed-price contract shifts performance risk to the contractor.
NAICS code 541519 is broad; specific services need close monitoring.
Contractor's past performance and capacity should be verified.
Potential for cybersecurity vulnerabilities in IT sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.8 million to RAINBOW DATA SYSTEMS, INC.. GEX CORE SUSTAINMENT (CTA)

Who is the contractor on this award?

The obligated recipient is RAINBOW DATA SYSTEMS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.8 million.

What is the period of performance?

Start: 2023-12-15. End: 2026-12-14.

What is the specific nature of the 'Other Computer Related Services' being provided under this contract?

The NAICS code 541519, 'Other Computer Related Services,' is broad and can encompass a wide range of IT support activities not classified elsewhere. For this specific contract, 'GEX CORE SUSTAINMENT (CTA)' suggests services related to maintaining and supporting existing IT systems, potentially including hardware and software maintenance, help desk support, system administration, troubleshooting, and ensuring the operational readiness of critical IT infrastructure. Without further details from the contract's statement of work, it's difficult to pinpoint the exact services. However, the 'sustainment' aspect implies a focus on keeping current systems running efficiently and reliably, rather than developing new ones.

How does the $31.8 million contract value compare to similar IT sustainment contracts awarded by the DoD?

The $31.8 million contract value over three years, averaging approximately $10.6 million annually, is a substantial but not extraordinary amount for large-scale IT sustainment within the Department of Defense. The DoD procures a vast array of IT services, and sustainment contracts can range from a few million to hundreds of millions of dollars depending on the scope, criticality, and number of systems supported. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes (like 541519 or related IT service codes), similar contract types (firm-fixed-price), and similar durations awarded to agencies within the DoD. The high number of bids (117) suggests that this contract's value is within a competitive range that attracted significant market interest.

What is Rainbow Data Systems, Inc.'s track record with the federal government, particularly with the DoD?

Rainbow Data Systems, Inc. has been awarded this contract by the Defense Logistics Agency, indicating some level of past engagement or qualification with the Department of Defense. To assess their track record thoroughly, one would need to examine their contract history, including previous awards, performance evaluations (e.g., CPARS reports), and any past issues or successes. Information on their website or federal procurement databases like SAM.gov could provide insights into their experience with similar IT sustainment services. A positive track record with the DoD would suggest a higher likelihood of successful contract performance, while any negative history would warrant closer scrutiny of this award.

What are the potential risks associated with a firm-fixed-price contract for IT sustainment?

While firm-fixed-price (FFP) contracts are generally favored for transferring risk to the contractor and providing cost certainty, they do carry potential risks, especially in IT sustainment. The primary risk is that the contractor may cut corners on service quality or personnel to maintain profitability if their initial cost estimates were too low or if unforeseen technical challenges arise. This could lead to system degradation or reduced support effectiveness. Another risk is that the contractor might be less flexible in accommodating necessary changes or upgrades if they are not explicitly covered by the contract, potentially leading to disputes or delays. The government must ensure the SOW is comprehensive and that robust performance monitoring is in place to mitigate these risks.

How does the level of competition (117 bids) impact the value for taxpayers?

The exceptionally high number of 117 bids for this contract is a very strong indicator of robust competition, which directly benefits taxpayers. When many companies compete for a contract, they are incentivized to offer their best pricing and most competitive solutions to win the award. This intense bidding process helps drive down prices, ensuring that the government is not overpaying for the IT sustainment services. It also increases the likelihood that the selected contractor, Rainbow Data Systems, Inc., will provide high-quality services at a fair market price, maximizing the value of taxpayer investment. This level of competition reduces the government's risk of receiving suboptimal offers.

What is the historical spending pattern for 'Other Computer Related Services' by the Defense Logistics Agency?

Analyzing historical spending patterns for NAICS code 541519 by the Defense Logistics Agency (DLA) would provide context for this $31.8 million award. DLA, as a major logistics provider for the DoD, relies heavily on IT systems for its operations. Historical data would reveal the typical scale and frequency of contracts awarded for IT sustainment and related services. If DLA's spending in this category has been consistently high, it suggests a sustained need for such services. Conversely, a sudden increase might warrant investigation into the drivers behind the spending. Understanding past spending trends helps in assessing whether this current contract represents a normal continuation of services or a significant expansion.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SP470924Q1001

Offers Received: 117

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2358 LAKEVIEW DR STE A, BEAVERCREEK, OH, 45431

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $31,922,463

Exercised Options: $31,842,251

Current Obligation: $31,842,251

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470917D0097

IDV Type: IDC

Timeline