DoD's $110M IT support contract awarded to Jacobs Technology Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $110,106,783 ($110.1M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2010-04-20

End Date: 2013-01-22

Contract Duration: 1,008 days

Daily Burn Rate: $109.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INFORMATION TECHNOLOGY SUPPORT SERVICES

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $110.1 million to JACOBS TECHNOLOGY INC. for work described as: INFORMATION TECHNOLOGY SUPPORT SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar IT support services. 2. Competition was limited, potentially impacting price discovery and overall value for taxpayers. 3. The Cost Plus Fixed Fee (CPFF) structure introduces some cost-reimbursement risk. 4. Performance occurred during a period of significant IT modernization efforts within the Army. 5. This contract falls within the broad IT services sector, a major area of federal spending. 6. The contractor, Jacobs Technology Inc., has a substantial history of federal contract awards.

Value Assessment

Rating: good

The $110.1 million award for IT support services appears to be within a reasonable range when compared to similar contracts for custom computer programming and IT support. The CPFF contract type, while carrying some inherent risk of cost overruns, was likely chosen to accommodate the evolving nature of IT support requirements during the contract period. Benchmarking against industry standards for IT support services suggests that the pricing structure was competitive for the services rendered, though specific performance metrics would provide a clearer picture of 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 data specifies 'full and open competition,' the number of bids received (4) suggests that the actual competitive landscape might have been narrower than ideal for this significant IT support requirement. A higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: While full and open competition was utilized, the relatively low number of bids suggests that taxpayers may not have benefited from the most aggressive pricing possible. This highlights the importance of market research to ensure sufficient competition for IT services.

Public Impact

The Department of the Army benefited from essential IT support services, ensuring the continuity of critical operations. This contract supported custom computer programming services, likely contributing to software development and maintenance. The contract was performed in Alabama (AL), indicating a geographic concentration of federal IT support work. The contract likely supported a workforce of IT professionals, including programmers, technicians, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit, requiring robust oversight.
Limited number of bidders (4) in a full and open competition may indicate barriers to entry or a concentrated market for these specific IT services.

Positive Signals

Awarded under full and open competition, maximizing the pool of potential offerors.
The contractor, Jacobs Technology Inc., is a well-established entity with significant experience in federal contracting.
The contract duration (1008 days) allowed for sustained IT support, potentially leading to efficiencies.

Sector Analysis

The Information Technology (IT) sector represents a substantial portion of federal spending, encompassing a wide array of services from custom programming to infrastructure management. This contract for IT support services falls squarely within this domain. Comparable federal spending benchmarks for IT support services often run into billions of dollars annually across various agencies. The market for such services is dynamic, with a mix of large prime contractors and specialized small businesses.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were mandated within this award. This means the primary contractor, Jacobs Technology Inc., had flexibility in how it managed its subcontracting relationships, with potential implications for the broader small business IT ecosystem.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve detailed review of incurred costs, progress reports, and performance metrics by the contracting officer and their representatives. The Department of the Army's contracting and program management offices would be responsible for ensuring compliance with contract terms and conditions. Transparency would be facilitated through contract databases like FPDS, though detailed performance data may not always be publicly accessible.

Related Government Programs

IT Services
Custom Computer Programming
Department of Defense IT Contracts
Army IT Modernization

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Indicator

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.1 million to JACOBS TECHNOLOGY INC.. INFORMATION TECHNOLOGY SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $110.1 million.

What is the period of performance?

Start: 2010-04-20. End: 2013-01-22.

What was the specific nature of the 'Custom Computer Programming Services' provided under this contract?

The contract, NAICS code 541511, specifies 'Custom Computer Programming Services.' This typically involves writing, modifying, testing, and supporting software to meet the specific needs of a client. For this Department of the Army contract, it likely encompassed activities such as developing new applications, customizing existing software, integrating different systems, database programming, and providing ongoing maintenance and support for software developed or utilized by the Army. The exact scope would have been detailed in the contract's Statement of Work (SOW), which is not publicly available in this data extract but would have guided the specific programming tasks undertaken by Jacobs Technology Inc.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other common IT service contract types in terms of risk and value?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or is expected to evolve, as is common in IT development and support. The government agrees to pay the contractor's actual costs plus a fixed fee, which represents the contractor's profit. This structure shifts some cost risk to the government, as the final cost is not predetermined. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the government. Compared to Cost Plus Incentive Fee (CPIF) contracts, CPFF lacks an explicit mechanism to incentivize cost savings or performance improvements beyond the fixed fee. For IT services, CPFF can be appropriate for research and development or complex system integration where requirements are fluid, but it necessitates stringent oversight to manage costs effectively.

What does the number of bidders (4) suggest about the market for IT support services within the Department of the Army during the contract period?

A total of four bidders for a $110 million IT support contract awarded under full and open competition suggests a moderately competitive market, but potentially not as robust as desired for optimal price discovery. This number could indicate several factors: the specific technical requirements may have limited the pool of qualified contractors; the contract's geographic location or duration might have been less attractive to some firms; or the market for this particular type of IT support service may be concentrated among a few key players. While four bidders is a reasonable number, a significantly higher number (e.g., 10+) often correlates with more aggressive pricing and potentially better value for the government. It warrants further investigation into potential barriers to entry or market consolidation.

What is the track record of Jacobs Technology Inc. in securing federal IT contracts?

Jacobs Technology Inc. has a substantial and long-standing track record of securing federal contracts, particularly within the IT and engineering services sectors. As a large, established government contractor, they have consistently won significant awards across various agencies, including the Department of Defense. Their portfolio typically includes complex IT solutions, infrastructure support, cybersecurity, and systems engineering. The $110 million award from the Department of the Army for IT support services aligns with their demonstrated capabilities and past performance in delivering large-scale technology solutions to government clients. Their extensive experience suggests a high level of familiarity with federal procurement processes and requirements.

How did the contract's performance period (2010-2013) align with broader trends in federal IT spending and modernization?

The performance period of this contract (April 2010 to January 2013) falls within a significant era of federal IT modernization efforts. During this time, agencies were increasingly focused on consolidating data centers, migrating to cloud-based solutions, enhancing cybersecurity, and improving the efficiency of IT operations. The Obama administration's 'Cloud First' policy, introduced in late 2010, strongly encouraged federal agencies to prioritize cloud solutions. Therefore, IT support services like those provided by Jacobs Technology Inc. were crucial for implementing these strategic shifts, managing existing infrastructure while transitioning to new technologies, and ensuring the security and reliability of the Army's IT environment during a period of substantial technological change.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc

Address: 1525 PERIMETER PKWY, SUITE 510, HUNTSVILLE, AL, 35806

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

Financial Breakdown

Contract Ceiling: $110,106,783

Exercised Options: $110,106,783

Current Obligation: $110,106,783

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline