VA Spends $39M on VALERI System with Black Knight Infoserv, LLC, Under Sole-Source Contract

Contract Overview

Contract Amount: $39,164,230 ($39.2M)

Contractor: Black Knight Infoserv, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-07-01

End Date: 2019-06-30

Contract Duration: 1,094 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VA LOAN ELECTRONIC REPORTING INTERFACE (VALERI)IGF::OT::IGF

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32204

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $39.2 million to BLACK KNIGHT INFOSERV, LLC for work described as: VA LOAN ELECTRONIC REPORTING INTERFACE (VALERI)IGF::OT::IGF Key points: 1. The Department of Veterans Affairs (VA) awarded a $39.16 million contract for the VALERI system. 2. Black Knight Infoserv, LLC is the sole provider for this service. 3. The contract was not competed, raising potential concerns about price discovery and value. 4. The sector is IT, specifically Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services.

Value Assessment

Rating: questionable

The contract value of $39.16 million over three years for IT infrastructure and data processing services appears high given the lack of competition. Benchmarking is difficult without comparable sole-source contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, meaning there was no open competition. This limits the VA's ability to ensure the best possible price and service through market forces.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these services, as there was no incentive for the contractor to offer the lowest possible price.

Public Impact

Veterans rely on the VALERI system for efficient loan processing. The sole-source nature of the contract could impact the VA's budget for veteran services. Lack of transparency in pricing may lead to public scrutiny.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Essential system for VA loan operations
Contract completed within its duration

Sector Analysis

The IT sector, particularly data processing and web hosting, is crucial for government operations. Spending benchmarks for similar sole-source contracts are difficult to establish due to the nature of such awards.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was awarded sole-source to a single large provider.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the VA received fair value and that such awards are not becoming a pattern without justification.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award lacks transparency.
Potential for inflated pricing due to no competition.
Limited opportunity for small business participation.
Dependency on a single vendor creates risk.
Lack of clear justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $39.2 million to BLACK KNIGHT INFOSERV, LLC. VA LOAN ELECTRONIC REPORTING INTERFACE (VALERI)IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is BLACK KNIGHT INFOSERV, 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 $39.2 million.

What is the period of performance?

Start: 2016-07-01. End: 2019-06-30.

What was the justification for awarding this contract sole-source, and were alternative solutions explored?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services. The VA would need to document why Black Knight Infoserv, LLC was the only viable option for the VALERI system, potentially due to proprietary technology or unique expertise.

How does the per-unit cost of this contract compare to industry benchmarks for similar IT services, considering the lack of competition?

Without competition, direct per-unit cost comparison is challenging. However, the $39.16 million expenditure for IT infrastructure and data processing over three years suggests a significant investment. A thorough review would involve analyzing the specific services rendered against market rates for comparable, competed contracts to identify potential cost inefficiencies.

What is the long-term impact of relying on a single vendor for such a critical system on the VA's operational resilience and future cost?

Sole-source reliance can create vendor lock-in, potentially increasing future costs and reducing flexibility. It also poses a risk to operational resilience if the vendor faces financial difficulties or service disruptions. The VA should consider strategies for future contract renewals to introduce competition or develop in-house capabilities to mitigate these long-term risks.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: VA118-16-R-1218

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Black Knight Real Estate Data Solutions LLC (UEI: 080897125)

Address: 601 RIVERSIDE AVE, JACKSONVILLE, FL, 32204

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

Financial Breakdown

Contract Ceiling: $48,141,589

Exercised Options: $39,164,230

Current Obligation: $39,164,230

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline