DoD awards $14.8M contract for IT hosting and managed support services to KADIAK LLC

Contract Overview

Contract Amount: $14,850,605 ($14.9M)

Contractor: Kadiak LLC

Awarding Agency: Department of Defense

Start Date: 2024-01-15

End Date: 2027-01-14

Contract Duration: 1,095 days

Daily Burn Rate: $13.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HOSTING AND MANAGED SUPPORT SERVICES (HMSS)

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to KADIAK LLC for work described as: HOSTING AND MANAGED SUPPORT SERVICES (HMSS) Key points: 1. Contract awarded for IT hosting and managed support services, indicating a need for robust digital infrastructure. 2. The contract is a definitive contract with a firm fixed price, suggesting predictable costs. 3. The duration of the contract is 1095 days, spanning three years. 4. The contract is not available for competition, raising questions about potential cost efficiencies. 5. The awardee, KADIAK LLC, will provide services to the Department of the Army. 6. The contract is located in Alaska, potentially indicating specific regional IT infrastructure needs.

Value Assessment

Rating: fair

The contract value of $14.8 million over three years for hosting and managed support services appears to be within a reasonable range for enterprise-level IT support. However, without specific details on the scope of services, it is difficult to benchmark against similar contracts. The firm fixed-price structure provides cost certainty, but the lack of competition could mean the government is not achieving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, or in cases of urgent need. The lack of competition limits the government's ability to leverage market forces to drive down costs and ensure the most innovative solutions are considered.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to offer the lowest price or most efficient service.

Public Impact

The Department of the Army benefits from guaranteed IT hosting and managed support services. Military operations and administrative functions relying on IT infrastructure in Alaska will be supported. The contract ensures the continuity of critical IT services for defense operations in the region. Workforce implications are likely within KADIAK LLC, with potential for local employment in Alaska.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits opportunities for other capable vendors.
Scope of services needs detailed review to ensure value for money.

Positive Signals

Firm fixed-price contract provides cost predictability.
Definitive contract structure offers a clear framework for service delivery.
Award to a single vendor can ensure specialized expertise is leveraged.

Sector Analysis

The IT services sector, particularly managed services and hosting, is a significant area of federal spending. This contract falls under computer facilities management services. The federal government is a major consumer of these services to maintain its vast IT infrastructure. Benchmarking this contract's value would require comparing it to other large-scale managed IT service contracts, considering factors like service level agreements, security requirements, and geographic scope.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature of the award, there are no immediate subcontracting implications for small businesses unless KADIAK LLC voluntarily engages them. The lack of a set-aside means opportunities for small businesses to compete for this specific contract were not pursued.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of the Army's contracting and program management offices. Transparency is dependent on the public availability of contract details and performance reports. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Information Technology Professional Services
Cloud Computing Services
Managed Network Services
Data Center Operations

Risk Flags

Sole-source award
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to KADIAK LLC. HOSTING AND MANAGED SUPPORT SERVICES (HMSS)

Who is the contractor on this award?

The obligated recipient is KADIAK 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 $14.9 million.

What is the period of performance?

Start: 2024-01-15. End: 2027-01-14.

What is the specific scope of 'Hosting and Managed Support Services' covered under this contract?

The provided data does not detail the specific scope of 'Hosting and Managed Support Services' (HMSS). Typically, HMSS contracts encompass a range of services including data center operations, server management, network infrastructure support, cybersecurity, disaster recovery, and cloud hosting solutions. For this contract, the services are likely tailored to the Department of the Army's specific IT requirements in Alaska. A comprehensive understanding of the scope would require reviewing the contract's statement of work (SOW), which would outline deliverables, service level agreements (SLAs), performance metrics, and any specific technologies or platforms to be managed. Without the SOW, it's challenging to fully assess the value and appropriateness of the $14.8 million award.

How does the $14.8 million contract value compare to similar IT managed services contracts awarded by the Department of Defense?

Benchmarking the $14.8 million contract value requires comparing it to similar IT managed services contracts, specifically those for hosting and facilities management, awarded by the Department of Defense (DoD) or other federal agencies. Given this is a three-year definitive contract, the annual value is approximately $4.95 million. Large-scale managed IT services contracts for federal agencies can range from a few million to hundreds of millions of dollars annually, depending on the complexity, scope, and number of users supported. Contracts for enterprise-level data center management, cloud migration, and comprehensive IT support often fall within this multi-million dollar range. However, the lack of competition for this specific award makes a direct value-for-money comparison difficult without knowing the precise service levels and performance expectations.

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

The primary risk associated with awarding this contract on a sole-source basis is the potential for reduced value for money. Without competition, KADIAK LLC faces less pressure to offer the most competitive pricing or the most innovative solutions. This can lead to the government paying a premium for services. Additionally, a sole-source award limits the government's ability to explore alternative solutions or vendors that might offer better performance, enhanced security, or greater cost efficiencies. There's also a risk that the government may not be aware of all available market capabilities. This approach can also stifle innovation within the broader IT services market by not providing opportunities for emerging or specialized companies to demonstrate their capabilities.

What is KADIAK LLC's track record with federal IT services contracts, particularly with the Department of Defense?

Information regarding KADIAK LLC's specific track record with federal IT services contracts, especially with the Department of Defense, is not detailed in the provided data. To assess their performance history, one would need to examine past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or terminations. A thorough review would involve searching federal procurement databases like SAM.gov or FPDS for previous awards to KADIAK LLC, noting the agencies they've served, the types of services provided, and their performance ratings. Understanding their experience with similar HMSS requirements and their ability to meet stringent DoD standards would be crucial for evaluating the risk associated with this sole-source award.

How does the geographic location in Alaska influence the contract's scope and potential costs?

The contract's location in Alaska (ST: AK, SN: ALASKA) can significantly influence its scope and costs. Operating in remote or geographically challenging areas often entails higher logistical expenses, increased travel costs for personnel, and potentially higher labor rates due to the cost of living and limited local talent pools. Furthermore, ensuring reliable IT infrastructure and managed support services in Alaska may require specialized solutions to address environmental conditions, connectivity challenges, and potentially unique security requirements related to military installations in the region. These factors could justify a higher cost compared to similar services provided in more accessible mainland locations. The specific needs of the Department of the Army in Alaska would dictate the precise scope and the associated cost drivers.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Koniag, Inc.

Address: 3800 CENTERPOINT DR, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $116,840,669

Exercised Options: $68,553,213

Current Obligation: $14,850,605

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Timeline