DoD awards $47.8M for core application services to ASM Research, LLC, with no competition

Contract Overview

Contract Amount: $47,764,393 ($47.8M)

Contractor: ASM Research, LLC

Awarding Agency: Department of Defense

Start Date: 2023-02-13

End Date: 2025-02-12

Contract Duration: 730 days

Daily Burn Rate: $65.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CORE APPLICATION

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $47.8 million to ASM RESEARCH, LLC for work described as: CORE APPLICATION Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of market-driven pricing. 2. The fixed-price contract structure may limit upside for the government if costs are lower than anticipated. 3. Lack of competition suggests potential risks related to contractor performance and innovation. 4. Contract duration of two years provides a defined period for service delivery. 5. The contract falls under 'Other Computer Related Services,' a broad category. 6. Virginia-based contractor suggests potential for local economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable data. The firm fixed-price structure means the government pays a set amount regardless of actual costs incurred by the contractor. Without competitive bids, it's difficult to ascertain if the $47.8 million represents a fair market price or if there's an opportunity for cost savings through competition. The provided benchmark of $65,431 per year (based on the total award and duration) is a starting point but lacks context without knowing the specific services rendered.

Cost Per Unit: $65,431 per year (estimated)

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The absence of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process. This can lead to higher prices and potentially less optimal solutions.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the lack of competitive pressure to drive down costs. The government missed an opportunity to explore alternative solutions and potentially secure better value through a competitive solicitation.

Public Impact

The Department of the Army benefits from the continued provision of core application services. This contract supports the operational readiness and administrative functions of the Army. The services are likely to have a broad impact across various Army units and personnel. The contract supports jobs within ASM Research, LLC, a Virginia-based company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of paying above-market rates.
Sole-source awards can limit innovation and service improvement opportunities.
Performance monitoring will be critical to ensure value delivery without competitive pressure.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The contract has a defined duration, allowing for clear planning and oversight.
The contractor, ASM Research, LLC, is a known entity within the federal contracting space.

Sector Analysis

The federal IT services market is vast and highly competitive, with significant spending allocated to software development, maintenance, and support. Contracts for 'Other Computer Related Services' often encompass a wide range of activities, from custom software creation to system integration and IT consulting. While specific benchmarks for this niche are hard to pinpoint without more detail, the overall IT services sector sees substantial investment. This contract represents a portion of the Department of Defense's broader IT modernization and sustainment efforts.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The award to ASM Research, LLC, a company that may or may not be classified as a small business itself, means that opportunities for small business participation are not explicitly mandated by this contract's structure. Further investigation into ASM Research's size classification and subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, scrutiny may be higher to ensure the contractor is meeting performance expectations and that the pricing remains justified throughout the contract period. Transparency is limited by the lack of competitive bidding, but contract performance reports and payment data should be available through federal procurement databases. The Inspector General's office for the Department of Defense may review this contract as part of broader audits of IT spending.

Related Government Programs

Department of Defense IT Services
Core Application Development and Maintenance
Other Computer Related Services
Sole Source IT Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for above-market pricing due to lack of competition.
Limited transparency into the selection process.
Risk of contractor complacency without competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.8 million to ASM RESEARCH, LLC. CORE APPLICATION

Who is the contractor on this award?

The obligated recipient is ASM RESEARCH, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $47.8 million.

What is the period of performance?

Start: 2023-02-13. End: 2025-02-12.

What is the track record of ASM Research, LLC in delivering similar core application services to the federal government?

ASM Research, LLC has a history of performing IT services for the federal government, including contracts with the Department of Defense. Their past performance data, available through federal procurement databases like SAM.gov, would indicate their success in delivering on similar projects. Analyzing their contract history for on-time delivery, quality of service, and any past performance issues or disputes would provide crucial context for assessing their capability to fulfill this current $47.8 million award. Without specific details on past projects, it's assumed they have met the requirements for previous awards, but a deeper dive into their performance metrics is recommended.

How does the awarded price compare to market rates for similar 'Other Computer Related Services' in the federal sector?

Directly comparing the awarded price of $47.8 million for 'Other Computer Related Services' to market rates is challenging without a detailed scope of work and specific service deliverables. The 'Other Computer Related Services' category (NAICS 541519) is broad. However, the contract's estimated annual cost of approximately $65,431 per year, derived from the total award and duration, can be used as a very rough benchmark. To conduct a thorough comparison, one would need to identify comparable sole-source or competitively awarded contracts with similar service descriptions, contractor experience levels, and geographic locations. Publicly available contract databases and market research reports could offer insights, but the lack of competition here makes definitive value assessment difficult.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a contract of this magnitude ($47.8 million) on a sole-source basis are significant. Firstly, there is a heightened risk of overpayment, as the absence of competition means the government may not be achieving the most favorable pricing achievable in a competitive market. Secondly, it can stifle innovation; without the pressure of competing vendors, the incumbent contractor may have less incentive to introduce new technologies or improve service delivery methods. Thirdly, there's a potential for reduced accountability, as the government's leverage to drive performance improvements is diminished compared to a competitive environment where alternatives exist. Finally, sole-source awards can raise concerns about fairness and equal opportunity for other capable vendors.

What is the expected effectiveness of the services provided under this contract for the Department of the Army?

The expected effectiveness of the services provided under this contract hinges on the 'core application' that ASM Research, LLC is supporting. If these core applications are critical for the Department of the Army's operations, then the continued, uninterrupted service delivery is paramount for maintaining readiness and efficiency. The effectiveness will be measured by the contractor's ability to meet the defined performance standards, ensure system uptime, provide timely support, and implement any necessary updates or maintenance. The firm fixed-price nature suggests a focus on delivering a defined set of services within budget, but the ultimate effectiveness depends on the quality of execution and the criticality of the applications themselves.

How does this contract's spending compare to historical federal spending on 'Other Computer Related Services'?

Historical federal spending on 'Other Computer Related Services' (NAICS 541519) is substantial, reflecting the government's continuous need for specialized IT support beyond standard software development or IT management. This $47.8 million contract is a significant award within this category, particularly given its sole-source nature and two-year duration. To contextualize it, one would need to examine aggregate spending trends for NAICS 541519 across all federal agencies over several fiscal years. Comparing this single contract's value against the total annual federal expenditure for this specific service code would reveal whether it represents a typical investment or an outlier. The Department of Defense is consistently one of the largest federal spenders in IT services, making this contract consistent with agency-wide spending patterns.

What are the implications of the 'firm fixed price' contract type for government oversight and contractor risk?

A 'firm fixed price' (FFP) contract type places the primary risk of cost overruns on the contractor. This means that ASM Research, LLC is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the government, this offers significant cost certainty, as the total expenditure is known upfront. However, it also means the government may not benefit if the contractor completes the work under budget. Oversight for an FFP contract typically focuses on ensuring that the contractor meets the defined scope of work and performance standards. While cost is fixed, the government must still monitor quality, timeliness, and adherence to contract terms to ensure effective delivery of services.

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 › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W519TC23R2030

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 4050 LEGATO RD STE 1100, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $47,764,393

Exercised Options: $47,764,393

Current Obligation: $47,764,393

Actual Outlays: $7,184,593

Subaward Activity

Number of Subawards: 50

Total Subaward Amount: $8,308,309

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline