VA's $31.8M Management Support Contract with ADDX Corporation shows fair value but limited competition

Contract Overview

Contract Amount: $31,833,984 ($31.8M)

Contractor: Addx Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-03-28

End Date: 2018-08-27

Contract Duration: 1,978 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF SMG OVERIGHT AND PROGRAM MANAGMENT SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31.8 million to ADDX CORPORATION for work described as: IGF::CT::IGF SMG OVERIGHT AND PROGRAM MANAGMENT SUPPORT SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar management consulting services. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. The fixed-price contract type mitigates some cost overrun risks. 4. Performance duration of nearly 2,000 days suggests a stable, ongoing need for services. 5. The contract falls within the administrative management consulting sector, a common area for federal support. 6. No specific small business set-aside was noted, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's total value of approximately $31.8 million over its duration suggests a moderate annual spend. Benchmarking against similar administrative management and general management consulting services procured by the VA and other agencies indicates that the pricing is within an expected range. However, without more granular data on the specific services rendered and the labor categories involved, a precise value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value.

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 offers. While the award notice does not specify the number of bids received, the 'full and open' designation suggests a competitive process was initiated. The presence of multiple bidders, if confirmed, would typically lead to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation among contractors, leading to more efficient use of public funds.

Public Impact

The Department of Veterans Affairs benefits from enhanced program management and oversight. Services delivered likely include strategic planning, operational efficiency improvements, and administrative support. The contract's impact is primarily within the District of Columbia, where the VA's central operations are often managed. Workforce implications may involve support for VA program managers and administrative staff, potentially improving their effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher prices than a more robust bidding process.
Lack of specific performance metrics in the provided data makes it difficult to assess service quality.
The long duration of the contract might indicate a lack of flexibility to adapt to changing needs.

Positive Signals

Firm-fixed-price contract type provides cost certainty.
Awarded under full and open competition, suggesting an effort to maximize contractor options.
The contractor, ADDX Corporation, has a track record of performing government contracts.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is a significant component of federal spending, supporting a wide array of government functions from policy development to operational execution. Comparable spending in this area often involves contracts for strategic planning, organizational analysis, and program management support across various agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was open to all eligible offerors, including large businesses. While this maximizes the pool of potential contractors, it may limit direct opportunities for small businesses unless they are part of a subcontracting plan. The absence of a small business set-aside means the direct impact on the small business ecosystem is likely minimal for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of Veterans Affairs. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance reports are often internal. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Management and Consulting Services
Program Management Support
Administrative Support Services
Federal IT Consulting
Government Operations Support

Risk Flags

Limited competition may result in suboptimal pricing.
Lack of detailed performance metrics hinders value assessment.
Potential for scope creep over the contract's long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31.8 million to ADDX CORPORATION. IGF::CT::IGF SMG OVERIGHT AND PROGRAM MANAGMENT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is ADDX CORPORATION.

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 $31.8 million.

What is the period of performance?

Start: 2013-03-28. End: 2018-08-27.

What specific types of management consulting services were provided under this contract?

The contract, identified by NAICS code 541611, covers Administrative Management and General Management Consulting Services. While the specific task orders are not detailed here, these services typically encompass areas such as strategic planning, organizational analysis, process improvement, operational efficiency, program management support, and general administrative guidance. For the Department of Veterans Affairs (VA), this could involve supporting the implementation of new policies, optimizing internal workflows, enhancing program delivery, or providing analytical support for decision-making processes. The exact nature of the services would be defined in the individual delivery orders issued against this contract.

How does the total contract value of $31.8 million compare to similar contracts for management consulting services at the VA?

The total contract value of $31.8 million over its nearly 2,000-day duration (approximately 5.4 years) represents an average annual spend of roughly $5.9 million. This figure is moderate within the context of federal management consulting procurements. The VA, like many large federal agencies, procures significant amounts of consulting services annually. Benchmarking this against other large-scale management support contracts at the VA or similar agencies (e.g., DoD, HHS) would place it within a typical range for comprehensive program management and administrative support. Without specific details on the scope and deliverables, a precise comparison is difficult, but the overall value does not appear exceptionally high or low for a multi-year, agency-wide support contract.

What are the potential risks associated with a firm-fixed-price contract of this magnitude and duration?

Firm-fixed-price (FFP) contracts offer cost certainty to the government, as the price is set regardless of the contractor's actual costs. However, risks can arise. For a contract of this magnitude ($31.8M) and duration (nearly 2,000 days), the primary risk is that the fixed price may not adequately reflect unforeseen changes in scope, market conditions, or technological advancements over the contract's life. If the contractor underestimated costs or if requirements evolve significantly, they might face reduced profit margins or, in extreme cases, financial distress. Conversely, if the initial price was set too high due to inadequate market research or competition, the government might overpay. The long duration also increases the risk of the contract becoming misaligned with current agency needs if not actively managed and potentially modified.

What does the 'full and open competition' award type imply for the contractor, ADDX Corporation?

The 'full and open competition' award type signifies that ADDX Corporation was selected through a process where all responsible sources were permitted to submit bids. This implies that ADDX Corporation successfully met the government's requirements and presented a competitive offer, likely in terms of both price and technical merit, against other potential bidders. It suggests that the Department of Veterans Affairs sought to maximize the pool of qualified contractors to ensure the best possible value. For ADDX Corporation, winning a contract under full and open competition validates their capabilities and competitiveness in the federal contracting market, as they had to demonstrate their superiority or cost-effectiveness against a potentially wide range of competitors.

How has VA spending on administrative management and general management consulting evolved over time?

Historical spending data for the VA on administrative management and general management consulting (NAICS 541611) would reveal trends in the agency's reliance on external expertise for operational and strategic support. Generally, federal agencies, including the VA, utilize these services to augment internal capabilities, manage complex programs, implement reforms, and improve efficiency. Spending in this category can fluctuate based on agency priorities, budget allocations, and the initiation of new large-scale projects or initiatives. A review of past spending patterns would indicate whether the $31.8 million awarded to ADDX Corporation represents a typical investment level or a significant increase/decrease in this service area for the VA.

What is the significance of the contract being awarded in the District of Columbia (st: DC)?

The contract's award location in the District of Columbia (DC) often signifies that the services are being provided to support federal agencies headquartered or operating significantly within the nation's capital. For the Department of Veterans Affairs, this could mean the contract supports central administrative functions, policy development, national program oversight, or strategic initiatives managed from their Washington D.C. area offices. While the contractor's physical performance location isn't specified, the DC designation suggests the primary beneficiary or operational nexus of the contract is within the federal government's core administrative hub, impacting national-level VA operations rather than specific regional or field facilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4900 SEMINARY RD STE 700, ALEXANDRIA, VA, 22311

Business Categories: Category Business, 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: $31,833,984

Exercised Options: $31,833,984

Current Obligation: $31,833,984

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS10F0349N

IDV Type: FSS

Timeline