VA awards $33.1M for IT support, with 2 bids received under full and open competition

Contract Overview

Contract Amount: $33,118,608 ($33.1M)

Contractor: Pro-Sphere TEK, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-08-28

End Date: 2020-11-27

Contract Duration: 1,187 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TECHNOLOGY STRATEGIES TECHNICAL AND NON-TECHNICAL SUPPORT

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $33.1 million to PRO-SPHERE TEK, INC. for work described as: IGF::OT::IGF TECHNOLOGY STRATEGIES TECHNICAL AND NON-TECHNICAL SUPPORT Key points: 1. Contract value of $33.1M over 3 years suggests moderate investment in IT support services. 2. Limited competition (2 bidders) may indicate a specialized market or potential for higher pricing. 3. Fixed-price contract type shifts performance risk to the contractor, potentially stabilizing costs. 4. Contract awarded to PRO-SPHERE TEK, INC., a single entity, raising questions about broader market engagement. 5. The contract's duration of nearly 4 years provides a stable period for service delivery. 6. Geographic focus on Virginia (VA) aligns with VA's operational footprint.

Value Assessment

Rating: fair

The contract value of $33.1 million over approximately three years for IT support services appears within a reasonable range for specialized technical assistance. However, without specific benchmarks for similar 'Computer Systems Design Services' contracts at the VA or across government, a precise value-for-money assessment is challenging. The fixed-price nature of the award is a positive indicator for cost control, assuming the scope was well-defined. The limited number of bidders (2) could suggest either a highly specialized niche where few companies qualify, or a potential lack of robust competition that might have driven prices lower.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. However, only two bids were received. This limited number of bidders, despite the open competition, could suggest that the market for these specific IT support services is relatively small, or that the requirements were highly specialized, deterring a larger pool of potential offerors. The low number of bids may have reduced the competitive pressure on pricing.

Taxpayer Impact: While the competition was open, the low number of bids means taxpayers may not have benefited from the most aggressive pricing possible. A more robust competition with more bidders could have potentially led to a lower overall cost for the government.

Public Impact

Veterans Affairs (VA) benefits from enhanced IT support, potentially leading to improved services for veterans. The contract delivers technical and non-technical support, crucial for maintaining the VA's IT infrastructure. Services are primarily delivered within Virginia (VA), supporting the agency's operational presence in the region. The contract supports the workforce of PRO-SPHERE TEK, INC., contributing to employment in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in a higher price than a more competitive scenario.
The specific technical expertise required might limit the pool of qualified contractors, raising concerns about future availability.
Reliance on a single awardee for critical IT support could pose a risk if the contractor underperforms or faces financial instability.

Positive Signals

Fixed-price contract type provides cost certainty and shifts performance risk to the contractor.
The contract duration of nearly 4 years offers stability and allows for consistent service delivery.
Award under full and open competition, despite limited bids, adheres to procurement regulations.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and related services. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts like this are essential for supporting the complex IT needs of large organizations such as the Department of Veterans Affairs. Benchmarking against similar IT support contracts within the federal government would provide further context on pricing and scope.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award went to PRO-SPHERE TEK, INC., which, based on the contract value and nature, is likely a mid-to-large-sized business. This means the direct economic impact on the small business ecosystem from this specific contract is minimal, and opportunities for small business participation would likely depend on the prime contractor's voluntary subcontracting efforts.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract vehicle (implied by 'delivery order'), oversight would likely involve the issuing agency (Department of Veterans Affairs) and potentially the contracting officer's representative (COR) to ensure performance and compliance. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Support Services
Computer Systems Design Services
Department of Veterans Affairs IT Contracts
Federal IT Services

Risk Flags

Limited Competition
Potential for Price Inflation due to Low Bidder Count
Contractor Performance Risk
Reliance on Single Awardee

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $33.1 million to PRO-SPHERE TEK, INC.. IGF::OT::IGF TECHNOLOGY STRATEGIES TECHNICAL AND NON-TECHNICAL SUPPORT

Who is the contractor on this award?

The obligated recipient is PRO-SPHERE TEK, INC..

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 $33.1 million.

What is the period of performance?

Start: 2017-08-28. End: 2020-11-27.

What is the track record of PRO-SPHERE TEK, INC. with federal contracts, particularly with the VA?

A review of federal procurement data indicates that PRO-SPHERE TEK, INC. has been awarded multiple federal contracts, including several with the Department of Veterans Affairs. The contract in question, valued at approximately $33.1 million, represents a significant award for the company. Analyzing past performance on similar IT support contracts, including on-time delivery, quality of service, and adherence to budget, would provide a clearer picture of their reliability and capability. Information on past contract modifications, disputes, or terminations would also be relevant for assessing their track record.

How does the awarded price compare to similar IT support contracts within the VA or other federal agencies?

Benchmarking this $33.1 million contract against similar 'Computer Systems Design Services' contracts awarded by the VA or other agencies over the same period (2017-2020) is crucial for assessing value for money. Factors such as contract duration, scope of services (technical vs. non-technical support), labor categories, and geographic location influence pricing. Given that only two bids were received under full and open competition, the price might be higher than if more bidders had competed. A detailed analysis would require comparing the average per-hour rates or total contract value adjusted for scope and duration against a statistically significant sample of comparable contracts.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential underperformance by the contractor, leading to disruptions in critical IT services for the VA. The limited competition (2 bidders) also presents a risk of suboptimal pricing. Furthermore, reliance on a single contractor for a significant duration could pose a risk if the contractor experiences financial difficulties or strategic shifts. Mitigation strategies typically involve robust contract oversight, clear performance metrics (Service Level Agreements), regular performance reviews, and contingency planning. The fixed-price nature of the contract shifts some performance risk to the contractor, but the government still bears the risk of contractor failure.

How effective has the VA been in managing IT support contracts of this nature to ensure program effectiveness?

The effectiveness of the VA in managing IT support contracts like this one can be assessed through various indicators. These include the contractor's performance history on this specific contract (e.g., meeting deadlines, quality standards), the impact of the IT support on the VA's overall mission delivery (e.g., improved veteran services, operational efficiency), and the agency's ability to adapt to evolving technological needs. Past IG reports or GAO reviews related to VA IT spending and contract management could offer insights into systemic strengths and weaknesses in program effectiveness and oversight.

What are the historical spending patterns for IT support services at the VA, and how does this contract fit in?

Analyzing historical spending data for IT support services at the VA over the past 5-10 years would reveal trends in investment, major contract awards, and shifts in technology focus. This $33.1 million contract, awarded between 2017 and 2020, represents a specific investment within that broader pattern. Understanding whether this spending aligns with or deviates from historical averages, and whether it reflects strategic priorities like modernization or cybersecurity, provides context. Comparing the number of bidders and competition levels over time for similar services could also indicate changes in the market or VA's procurement strategies.

What is the potential impact of this contract on the broader IT services market, particularly concerning competition and innovation?

The award of this $33.1 million contract to PRO-SPHERE TEK, INC. under limited competition (2 bidders) suggests a potentially concentrated market for these specific IT support services. While it provides a significant revenue stream for the awardee, it may limit opportunities for other firms, especially smaller ones, to enter or expand within this niche. The long-term impact on innovation depends on the contract's structure; if it encourages the contractor to bring forward new solutions, it could foster innovation. Conversely, a lack of robust competition might reduce the incentive for the incumbent to innovate aggressively or for new players to invest in developing competing capabilities.

Industry Classification

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

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1101 KING ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $44,593,906

Exercised Options: $33,118,608

Current Obligation: $33,118,608

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1026

IDV Type: IDC

Timeline