DoD's $23.6M IT contract for theater operations software awarded to Apptricity Corporation without competition

Contract Overview

Contract Amount: $23,573,733 ($23.6M)

Contractor: Apptricity Corporation

Awarding Agency: Department of Defense

Start Date: 2017-04-03

End Date: 2023-07-02

Contract Duration: 2,281 days

Daily Burn Rate: $10.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TOPS (THEATER OPERATIONS) O&M AND TECHNICAL ENGINEERING SERVICES FOR TOPS SOFTWARE.

Place of Performance

Location: IRVING, DALLAS County, TEXAS, 75039

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to APPTRICITY CORPORATION for work described as: IGF::OT::IGF TOPS (THEATER OPERATIONS) O&M AND TECHNICAL ENGINEERING SERVICES FOR TOPS SOFTWARE. Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined costs and risks. 2. Long duration of 2281 days suggests a need for sustained IT support. 3. Awarded to a single vendor, raising questions about competitive pricing and market alternatives. 4. The contract's focus on operations and maintenance for specialized software implies critical system reliance. 5. Geographic location of performance in Texas may offer insights into regional IT labor costs. 6. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this $23.6 million contract is challenging due to the lack of competitive data. The firm-fixed-price structure suggests cost certainty for the government, but without competition, it's difficult to ascertain if the pricing reflects market rates or represents a premium. The long contract duration (2281 days) could indicate a stable, long-term need, but also potentially missed opportunities for cost savings through re-competition or alternative solutions. Further analysis would require comparing the scope of services and performance metrics to similar IT operations and maintenance contracts within the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arise from multiple bidders vying for a contract. This raises concerns about whether the government obtained the best possible price and value.

Taxpayer Impact: The absence of competition means taxpayers may have paid a higher price than if the contract had been openly competed. It also limits opportunities for new or smaller businesses to enter the federal IT services market.

Public Impact

The Department of the Army benefits from sustained IT operations and technical engineering services for its Theater Operations Software (TOPS). This contract ensures the continued functionality and maintenance of critical software supporting military operations. Performance is located in Texas, potentially impacting the local IT workforce and economy. The services delivered are essential for the effective management and execution of military theater operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source award limits opportunities for other qualified vendors, potentially stifling innovation.
Long contract duration without re-competition could result in outdated technology or services if not actively managed.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Sustained IT support ensures operational continuity for critical military software.
Award to a single, established vendor may indicate a proven ability to meet specific, complex requirements.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer-related services and software maintenance. The market for such services is vast and competitive, with numerous firms offering specialized IT support. The Department of Defense is a significant consumer of IT services, often requiring highly specialized solutions for complex operational needs. Benchmarking this contract's value against similar IT O&M contracts within the defense sector would provide a clearer picture of its cost-effectiveness, especially given its sole-source nature.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, and there is no explicit mention of subcontracting plans for small businesses. This suggests that the primary awardee, Apptricity Corporation, is likely a large business. The absence of small business participation requirements means that the direct economic benefits to the small business ecosystem from this specific contract may be limited. Further investigation into the contractor's subcontracting history would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of cost control. However, the sole-source award necessitates robust performance monitoring to ensure the contractor is delivering services as specified and at a reasonable value. Transparency regarding the justification for the sole-source award and ongoing performance metrics would be key oversight elements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Technology Contracting Office (DITCO) contracts
Army Enterprise Systems Integration Program (AESIP)
Tactical Data Systems contracts
Command and Control Systems support

Risk Flags

Sole-source award raises concerns about price reasonableness.
Long contract duration without re-competition may limit innovation and cost savings.
Lack of small business subcontracting information warrants further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to APPTRICITY CORPORATION. IGF::OT::IGF TOPS (THEATER OPERATIONS) O&M AND TECHNICAL ENGINEERING SERVICES FOR TOPS SOFTWARE.

Who is the contractor on this award?

The obligated recipient is APPTRICITY CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.6 million.

What is the period of performance?

Start: 2017-04-03. End: 2023-07-02.

What is the specific justification for awarding this contract on a sole-source basis to Apptricity Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, compatibility with existing systems, or urgent and compelling needs where competition is not feasible. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to definitively state why this contract was not competed. Further investigation would involve reviewing the contract file or agency procurement records to uncover the rationale behind this decision.

How does the $23.6 million contract value compare to similar IT operations and maintenance contracts within the Department of Defense?

Comparing this $23.6 million contract value to similar IT operations and maintenance (O&M) contracts within the Department of Defense (DoD) is challenging without more specific details on the scope of services and the duration of comparable contracts. However, for a contract spanning 2281 days (over 6 years), $23.6 million translates to an average annual value of approximately $3.8 million. This figure falls within a common range for specialized IT O&M support for complex systems. To provide a more precise benchmark, one would need to analyze contracts for similar software (e.g., theater operations, command and control) awarded through competitive processes, considering factors like the number of users supported, the criticality of the system, and the specific maintenance and engineering tasks included.

What are the potential risks associated with a sole-source IT contract of this duration?

A sole-source IT contract of this duration (2281 days) carries several potential risks. Firstly, the lack of competition can lead to higher costs for the government, as the contractor may not be incentivized to offer the most competitive pricing. Secondly, without regular re-competition, there's a risk of technological stagnation; the contractor might not be pushed to adopt the latest advancements or efficiencies. Thirdly, vendor lock-in can occur, making it difficult and costly to switch providers or integrate new solutions later. Finally, the government's leverage in negotiating terms and conditions may be diminished over the long term, potentially impacting service quality or responsiveness if not managed proactively through strong contract oversight.

What is Apptricity Corporation's track record with the Department of Defense, particularly on similar IT contracts?

The provided data identifies Apptricity Corporation as the contractor for this $23.6 million IT contract. To assess their track record with the Department of Defense (DoD) on similar contracts, one would need to consult federal procurement databases (like FPDS or SAM.gov) for their contract history. This would reveal past performance ratings, any contract disputes or terminations, and the types and values of previous awards. Given this contract's focus on Theater Operations Software (TOPS) O&M and technical engineering, a review of their past performance on enterprise resource planning (ERP), logistics software, or command and control systems within the DoD would be particularly relevant.

What are the implications of the firm-fixed-price (FFP) contract type for cost control and risk management?

The firm-fixed-price (FFP) contract type is generally considered favorable for cost control and risk management from the government's perspective. Under an FFP contract, the contractor assumes most of the risk for cost overruns. The price is set at the outset and generally does not change, regardless of the contractor's actual costs. This provides the government with budget certainty. For the contractor, it incentivizes efficiency and cost management to maximize profit. However, for FFP contracts, especially sole-source ones, it is crucial that the initial price is fair and reasonable, often established through negotiation and market research, to prevent overpayment.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J17R0076

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 220 LAS COLINAS BLVD E STE 400, IRVING, TX, 75039

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

Financial Breakdown

Contract Ceiling: $23,611,764

Exercised Options: $23,573,733

Current Obligation: $23,573,733

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline