VA's Vets.gov development contract awarded to Ad Hoc LLC for $41.3M, utilizing Time and Materials

Contract Overview

Contract Amount: $41,354,627 ($41.4M)

Contractor: AD HOC LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-05-02

End Date: 2019-07-15

Contract Duration: 1,169 days

Daily Burn Rate: $35.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 15

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF REQUIREMENT IS FOR THE PROCUREMENT OF CONTRACTOR SUPPORT SERVICES TO AGILELY DEVELOP, ENHANCE, TEST, RELEASE, AND MAINTAIN VARIOUS ASPECTS OF VETS.GOV, INCLUDING BUT NOT LIMITED TO, WEBSITE DESIGN, CONTENT CREATION, APPLICATION DEVELOPMENT AND AUTHENTICATION INTEGRATION.

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20902

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $41.4 million to AD HOC LLC for work described as: IGF::OT::IGF REQUIREMENT IS FOR THE PROCUREMENT OF CONTRACTOR SUPPORT SERVICES TO AGILELY DEVELOP, ENHANCE, TEST, RELEASE, AND MAINTAIN VARIOUS ASPECTS OF VETS.GOV, INCLUDING BUT NOT LIMITED TO, WEBSITE DESIGN, CONTENT CREATION, APPLICATION DEVELOPMENT AND AUTHENTICATION INTEGRA… Key points: 1. Contract focused on agile development, enhancement, testing, release, and maintenance of Vets.gov. 2. Significant investment in digital services for veterans, aiming to improve online experience. 3. Time and Materials pricing structure can lead to cost overruns if not managed closely. 4. Competition was full and open, suggesting a potentially competitive bidding process. 5. Contract duration of over three years indicates a substantial, ongoing need for services. 6. The award to a single contractor, Ad Hoc LLC, highlights their specialized capabilities in this area.

Value Assessment

Rating: fair

The total award amount of $41.3 million for custom computer programming services over approximately three years appears to be within a reasonable range for complex web development projects of this nature. However, the Time and Materials (T&M) pricing model introduces inherent risk for cost control. Without detailed breakdowns of labor categories, rates, and hours, a precise value-for-money assessment is challenging. Benchmarking against similar government IT development contracts would be necessary for a more definitive evaluation of pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition after Exclusion of Sources,' indicating that the solicitation was broadly advertised and multiple bids were likely considered. The presence of 15 bids suggests a healthy level of competition for this requirement. This competitive environment generally benefits the government by driving down prices and encouraging innovation from contractors.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. The government received multiple proposals, allowing for selection of the best value offering.

Public Impact

Veterans benefit from improved and maintained online services through Vets.gov. The contract supports the development and enhancement of critical digital infrastructure for veteran services. Services delivered include website design, content creation, application development, and authentication integration. The primary geographic impact is nationwide, serving veterans across the United States. The contract supports a workforce of skilled IT professionals in software development and related fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing can lead to unpredictable costs if not closely monitored.
The success of the project is heavily reliant on the performance and expertise of Ad Hoc LLC.
Potential for scope creep exists within agile development methodologies if not managed effectively.

Positive Signals

Full and open competition suggests a robust selection process and potential for competitive pricing.
The contract addresses a clear need for modernizing and maintaining veteran-facing digital services.
The award to a single, specialized contractor may indicate a focus on expertise and efficient delivery.

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. The market for government IT services is substantial, with agencies increasingly relying on contractors for agile development, cloud migration, and cybersecurity. Comparable spending benchmarks for large-scale web development and application maintenance contracts within federal agencies can vary widely based on complexity and scope, but this $41.3 million award represents a significant investment in a specific digital platform.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses or those with significant resources likely competed for and were awarded this contract. There is no direct information on subcontracting plans, but for contracts of this size and scope, it is common for prime contractors to engage small businesses for specialized services, potentially creating subcontracting opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' contracting officers and program managers. Performance reviews, regular reporting, and adherence to contract terms would be key accountability measures. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's lifecycle.

Related Government Programs

Veterans Affairs IT Modernization
Digital Services for Federal Agencies
Custom Software Development Contracts
Agile Development Services
Website and Application Maintenance

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Reliance on a single contractor for critical digital services.
Need for robust oversight to manage agile development scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $41.4 million to AD HOC LLC. IGF::OT::IGF REQUIREMENT IS FOR THE PROCUREMENT OF CONTRACTOR SUPPORT SERVICES TO AGILELY DEVELOP, ENHANCE, TEST, RELEASE, AND MAINTAIN VARIOUS ASPECTS OF VETS.GOV, INCLUDING BUT NOT LIMITED TO, WEBSITE DESIGN, CONTENT CREATION, APPLICATION DEVELOPMENT AND AUTHENTICATION INTEGRATION.

Who is the contractor on this award?

The obligated recipient is AD HOC LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $41.4 million.

What is the period of performance?

Start: 2016-05-02. End: 2019-07-15.

What was the specific performance history of Ad Hoc LLC on previous government contracts prior to this award?

Assessing the performance history of Ad Hoc LLC on prior government contracts is crucial for understanding their track record. While the provided data does not detail past performance, a thorough analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any documented disputes or claims, and the successful completion of similar projects. A history of timely delivery, adherence to budget, and high-quality deliverables would indicate a lower risk for this contract. Conversely, a record of performance issues could signal potential challenges in meeting the requirements for Vets.gov.

How does the $41.3 million total contract value compare to similar IT development contracts awarded by the VA or other agencies for similar services?

The $41.3 million total contract value for Vets.gov development and maintenance over approximately three years needs to be benchmarked against comparable federal IT contracts. Similar projects involving agile development, custom programming, and ongoing maintenance for large-scale public-facing websites can range significantly. Factors influencing cost include the complexity of features, number of integrations, user base size, and specific technology stacks. A comparative analysis with contracts for other agency portals or large digital service platforms would help determine if this award represents a competitive price point or if it appears high or low relative to market norms and agency spending patterns.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used for this contract?

The primary risk associated with the Time and Materials (T&M) pricing structure is the potential for cost overruns and a lack of definitive cost control. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual time and materials used. This can incentivize longer project durations or less efficient work if not rigorously managed. For the VA, this means that without strong oversight, detailed tracking of hours and resources, and clear task definitions, the final cost could significantly exceed the initial estimates. Effective risk mitigation requires robust monitoring of labor hours, material costs, and task completion against defined milestones.

How effectively has Vets.gov, under this contract, met its objectives in serving veterans and improving their access to information and services?

Evaluating the effectiveness of Vets.gov in meeting its objectives requires analyzing user engagement metrics, satisfaction surveys, and the successful implementation of planned features and services. Since the contract's performance period ended in July 2019, data on user adoption, task completion rates, and veteran feedback would be essential. Key performance indicators (KPIs) related to website uptime, load times, accessibility compliance, and the successful integration of various veteran services (e.g., benefits information, healthcare appointments) would provide insights into the contract's success. A review of post-award reports or program evaluations would offer a more definitive assessment.

What has been the historical spending trend for Vets.gov development and maintenance prior to and during this contract period?

Understanding the historical spending trend for Vets.gov is vital for context. The provided data shows a $41.3 million award for a period ending in 2019. To assess trends, one would need to examine spending in the years leading up to this contract and any subsequent contracts for Vets.gov or its successor platforms. Analyzing these patterns can reveal whether spending has been consistent, increasing, or decreasing, and whether it aligns with the platform's evolution and the agency's strategic IT priorities. Significant year-over-year fluctuations might warrant investigation into the reasons behind them, such as major upgrades, shifts in technology, or changes in service scope.

Were there any specific challenges or successes reported by the VA or the contractor regarding the agile development methodology employed?

Agile development methodologies, while offering flexibility and rapid iteration, can present unique challenges and successes. For Vets.gov, successes might include the ability to quickly adapt to changing user needs or incorporate new features based on veteran feedback. Challenges could involve managing scope creep, ensuring consistent team velocity, maintaining documentation, and integrating agile sprints with broader agency requirements or traditional waterfall-based systems. Reports from the VA program office or contractor retrospectives would likely detail specific instances of both effective agile implementation and any hurdles encountered, providing insight into how the methodology impacted project delivery and outcomes.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA118-16-R-0896

Offers Received: 15

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 934 CLINTWOOD DR, SILVER SPRING, MD, 20902

Business Categories: Category Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $41,354,627

Exercised Options: $41,354,627

Current Obligation: $41,354,627

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline