VA Spends $157M on Cisco SmartNet Maintenance, Awarded to Avertium Tennessee

Contract Overview

Contract Amount: $157,415,566 ($157.4M)

Contractor: Avertium Tennessee, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-04-28

End Date: 2015-07-31

Contract Duration: 1,920 days

Daily Burn Rate: $82.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CISCO SMARTNET MAINTENANCE ADVANCED SUPPORT SERVICES

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78772

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $157.4 million to AVERTIUM TENNESSEE, INC for work described as: CISCO SMARTNET MAINTENANCE ADVANCED SUPPORT SERVICES Key points: 1. Significant spending on IT maintenance services. 2. Avertium Tennessee secured the contract. 3. The contract was awarded under full and open competition after exclusion of sources. 4. This represents a substantial investment in IT infrastructure support.

Value Assessment

Rating: fair

The total award amount is $157.4 million over approximately 5 years. Without specific unit pricing or comparison data for similar Cisco SmartNet maintenance contracts, it's difficult to definitively assess value. However, the scale suggests a significant commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition scenario. This method might impact price discovery compared to a truly open competition, potentially leading to higher costs.

Taxpayer Impact: Taxpayers are funding a large IT maintenance contract. The effectiveness of the competition method in securing the best price is a key consideration for taxpayer value.

Public Impact

Ensures continued operation and support for critical Cisco network infrastructure. Supports the Department of Veterans Affairs' IT systems, which are vital for veteran services. Potential for vendor lock-in with specialized maintenance services. Impacts the IT services market, particularly for network maintenance providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may impact price.
Long contract duration.
Reliance on a single vendor for maintenance.

Positive Signals

Supports critical VA IT infrastructure.
Contract awarded after a competitive process.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on hardware maintenance and support. Spending benchmarks for similar IT maintenance contracts vary widely based on the scope and duration, but $157 million over five years is a considerable investment.

Small Business Impact

The contract was awarded to Avertium Tennessee, Inc. Information on whether Avertium is a small business is not provided, but the large contract value suggests it could be a significant player or a prime contractor working with subcontractors.

Oversight & Accountability

The contract was awarded by the Department of Veterans Affairs. Oversight would involve monitoring performance, adherence to terms, and ensuring value for money throughout the contract's lifecycle.

Related Government Programs

Other Computer Related Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for price increases over the contract term.
Risk of vendor lock-in.
Technology obsolescence.
Dependence on a single provider for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $157.4 million to AVERTIUM TENNESSEE, INC. CISCO SMARTNET MAINTENANCE ADVANCED SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is AVERTIUM TENNESSEE, 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 $157.4 million.

What is the period of performance?

Start: 2010-04-28. End: 2015-07-31.

What is the specific value proposition of Cisco SmartNet Advanced Support Services compared to alternative maintenance solutions?

The value proposition of Cisco SmartNet Advanced Support Services typically lies in guaranteed response times, access to expert technical support, hardware replacement, and software updates directly from the manufacturer. This ensures minimal downtime and optimal performance for critical network infrastructure, which is essential for organizations like the VA.

What are the primary risks associated with a long-term, high-value IT maintenance contract like this?

Key risks include potential cost escalation over time, vendor lock-in making it difficult to switch providers, and the possibility of the technology becoming obsolete before the contract ends. There's also a risk that the contracted services may not fully meet evolving operational needs, requiring costly modifications or additional contracts.

How effectively does the 'full and open competition after exclusion of sources' method ensure optimal pricing and service delivery for the VA?

This method allows for competition but restricts the pool of eligible bidders. While it can be more efficient than a full open competition, it may limit the number of potential offers and potentially reduce competitive pressure on pricing. The VA must ensure the evaluation criteria strongly favor both cost-effectiveness and superior service delivery to maximize taxpayer value.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: VA798A-10-RQ-0091

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1431 CENTERPOINT BLVD STE 150, KNOXVILLE, TN, 37932

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $306,219,524

Exercised Options: $234,388,179

Current Obligation: $157,415,566

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG07DA21B

IDV Type: GWAC

Timeline