VA awards $35.8M task order for IT support, exceeding initial estimates by $19.6M

Contract Overview

Contract Amount: $35,789,263 ($35.8M)

Contractor: Pro-Sphere TEK, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-29

End Date: 2022-09-28

Contract Duration: 1,825 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF MODIFICATION TO TRANSFORMATION TWENTY ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR BUSINESS OPERATIONS SUPPORT SERVICES (BOSS) FOR THE DISTRIBUTED COMPUTING ENVIRONMENT (DCE) FOR HUD OIG.

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $35.8 million to PRO-SPHERE TEK, INC. for work described as: IGF::OT::IGF MODIFICATION TO TRANSFORMATION TWENTY ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR BUSINESS OPERATIONS SUPPORT SERVICES (BOSS) FOR THE DISTRIBUTED COMPUTING ENVIRONMENT (DCE) FOR HUD OIG. Key points: 1. The contract's final value significantly surpassed its initial estimated cost, indicating potential for cost overruns or scope expansion. 2. Competition was robust, with 5 bidders vying for the contract, suggesting a healthy market for these services. 3. The use of a Time and Materials contract type can introduce cost uncertainty if not closely managed. 4. This award falls within the Computer Systems Design Services NAICS code, a common area for federal IT procurement. 5. The contract duration of 5 years (1825 days) provides a long-term engagement for the contractor. 6. The significant difference between the estimated and awarded amount warrants further investigation into the drivers of this increase.

Value Assessment

Rating: fair

The awarded amount of $35.8 million is considerably higher than the initial estimate of $16.2 million (35.8 - 19.6 = 16.2). This substantial increase suggests that either the initial estimate was too low, or the scope of work expanded significantly during the procurement process. Without more detailed information on the breakdown of costs and the evolution of requirements, it is difficult to definitively assess value for money. However, the nearly doubling of the price from estimate to award is a red flag.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five bidders submitting proposals. This indicates a competitive environment where multiple vendors were given the opportunity to bid. The presence of multiple bidders generally supports price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces. The government likely received a more competitive price due to the multiple bids received.

Public Impact

The Department of Veterans Affairs (VA) benefits from enhanced IT support for its Distributed Computing Environment. The contract delivers essential business operations support services, crucial for the functioning of the VA's IT infrastructure. The services provided are critical for maintaining the operational integrity and efficiency of the VA's digital systems. The workforce implications include the employment of personnel by Pro-Sphere Tek, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The significant increase between the estimated cost and the final awarded amount raises concerns about initial cost estimation accuracy and potential for budget overruns.
The use of a Time and Materials contract type, while flexible, can lead to higher costs if not meticulously managed and monitored for scope creep.
The substantial difference between the estimated and awarded price warrants a deeper dive into the justification for the increase to ensure fair pricing.

Positive Signals

The contract was awarded through full and open competition, indicating a robust and fair bidding process.
The participation of five bidders suggests a healthy market and availability of qualified contractors for these services.
The award supports the VA's mission by ensuring critical IT infrastructure and business operations are adequately supported.

Sector Analysis

This contract falls within the IT services 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. This award represents a portion of the VA's ongoing investment in its IT capabilities, aiming to ensure efficient business operations and support for its distributed computing environment. Comparable spending benchmarks would typically involve analyzing other large IT support contracts awarded by the VA or similar large federal agencies.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. Therefore, there are no direct subcontracting implications or specific benefits for small businesses stemming from a set-aside provision. The primary contractor, Pro-Sphere Tek, Inc., will be responsible for fulfilling the contract requirements, and any subcontracting decisions would be at their discretion, not driven by a small business set-aside requirement.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. The Inspector General's office for the VA would also have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is facilitated through contract award databases, but detailed performance and cost oversight information may not be publicly available.

Related Government Programs

VA IT Modernization Programs
Federal Civilian IT Services Procurement
Distributed Computing Environment Support
Business Operations Support Services
Next Generation (T4NG) Task Orders

Risk Flags

Cost Growth: Significant increase from estimate to award.
Contract Type Risk: Potential for cost overruns with T&M.
Long-Term Commitment: 5-year duration may limit agility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $35.8 million to PRO-SPHERE TEK, INC.. IGF::OT::IGF MODIFICATION TO TRANSFORMATION TWENTY ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR BUSINESS OPERATIONS SUPPORT SERVICES (BOSS) FOR THE DISTRIBUTED COMPUTING ENVIRONMENT (DCE) FOR HUD OIG.

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 $35.8 million.

What is the period of performance?

Start: 2017-09-29. End: 2022-09-28.

What factors contributed to the nearly $20 million increase between the estimated cost and the final awarded amount for this task order?

The significant $19.6 million difference between the estimated cost ($16.2 million) and the awarded amount ($35.8 million) for this task order suggests several potential contributing factors. Firstly, the initial estimate may have been conservative or based on preliminary requirements that were later expanded. Secondly, the competitive bidding process, while robust with five bidders, could have resulted in a higher-than-anticipated market price for the required services, especially if specialized expertise or resources were in high demand. Thirdly, the Time and Materials (T&M) contract type allows for flexibility but can lead to cost increases if the scope of work evolves or if labor hours exceed initial projections. Without access to the detailed proposal evaluations and negotiation records, it is difficult to pinpoint the exact reasons, but a combination of scope evolution, market pricing, and the nature of the T&M contract likely played a role.

How does the awarded price of $35.8 million compare to similar IT support contracts awarded by the VA or other federal agencies?

Benchmarking the $35.8 million award requires comparing it to similar IT support contracts, specifically those for business operations support and distributed computing environments, awarded by the Department of Veterans Affairs (VA) or other large federal agencies over a comparable timeframe. Given the 5-year duration, the average annual cost is approximately $7.16 million ($35.8M / 5 years). This figure needs to be assessed against the complexity and scope of services provided. For instance, contracts for managing large-scale enterprise IT infrastructure, cybersecurity, or cloud services often command higher prices. If this contract involves extensive system integration, network management, and direct end-user support for a significant user base within the VA's DCE, the price might be considered within a reasonable range for a full and open competition. However, the substantial increase from the initial estimate suggests that external benchmarks might show this award to be on the higher side relative to initial expectations.

What are the primary risks associated with the Time and Materials (T&M) contract type used for this task order, and how were they mitigated?

The primary risk associated with a Time and Materials (T&M) contract is the potential for cost overruns, as the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or fixed hourly rate. This can lead to unpredictable total costs if the effort required is greater than anticipated or if scope creep occurs. Mitigation strategies typically involve robust government oversight, including detailed monitoring of labor hours, verification of materials used, and strict adherence to defined work requirements. The contracting officer must actively manage the contract to ensure that the work performed aligns with the Statement of Work (SOW) and that efficiencies are maintained. For this specific task order, the government's mitigation would involve diligent project management, regular progress reviews, and potentially establishing cost ceilings or award-fee structures to incentivize cost control, although the provided data does not specify these details.

What is the track record of Pro-Sphere Tek, Inc. in performing similar IT support services for federal agencies?

Assessing the track record of Pro-Sphere Tek, Inc. requires examining their past performance on federal contracts, particularly those involving IT support, business operations, and distributed computing environments. Information on past performance, including CPARS (Contractor Performance Assessment Reporting System) ratings, would provide insights into their reliability, quality of service, and adherence to schedule and budget on previous engagements. A review of their contract history with the VA and other agencies would reveal the types and scale of projects they have successfully completed. Without specific performance data, it's assumed that Pro-Sphere Tek, Inc. was deemed qualified and capable of performing this task order based on the competitive bidding process. However, a deeper dive into their performance history would be necessary for a comprehensive risk assessment.

How does the duration of this 5-year contract impact the VA's flexibility in adapting to future technological changes?

A 5-year contract duration, while providing stability and continuity for essential IT support services, can present challenges regarding flexibility in adapting to rapid technological advancements. Over a 5-year period, technology landscapes can shift significantly, with new solutions, platforms, and security protocols emerging. If the contract's scope is too rigidly defined, it might hinder the VA's ability to adopt newer, potentially more efficient or secure technologies without incurring additional costs or lengthy modification processes. To mitigate this, the contract should ideally include provisions for incorporating technological updates, performance-based metrics that encourage innovation, and clear mechanisms for scope adjustments. The Time and Materials nature might offer some inherent flexibility, but proactive contract management is crucial to ensure the VA remains agile.

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: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 10632 LITTLE PATUXENT PARKWAY, COLUMBIA, MD, 21044

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

Financial Breakdown

Contract Ceiling: $35,789,263

Exercised Options: $35,789,263

Current Obligation: $35,789,263

Actual Outlays: $1,683,504

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1026

IDV Type: IDC

Timeline