Army awards $13.5M for IT support to Cayuse Federal Services, raising value-for-money questions

Contract Overview

Contract Amount: $13,449,468 ($13.4M)

Contractor: Cayuse Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2024-06-26

End Date: 2026-06-25

Contract Duration: 729 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PROJECT MANAGEMENT, COMMUNICATIONS SUPPORT, DATA ANALYSIS AND OPERATIONS SUPPORT, SECURITY SUPPORT AND CUSTOMER RELATIONS IN SUPPORT OF U.S. ARMY COMMUNICATIONS-ELECTRONICS COMMAND (CECOM) SOFTWARE ENGINEERING CENTER (SEC), OPERATIONS DIRECTORATE.

Place of Performance

Location: PENDLETON, UMATILLA County, OREGON, 97801

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $13.4 million to CAYUSE FEDERAL SERVICES LLC for work described as: PROJECT MANAGEMENT, COMMUNICATIONS SUPPORT, DATA ANALYSIS AND OPERATIONS SUPPORT, SECURITY SUPPORT AND CUSTOMER RELATIONS IN SUPPORT OF U.S. ARMY COMMUNICATIONS-ELECTRONICS COMMAND (CECOM) SOFTWARE ENGINEERING CENTER (SEC), OPERATIONS DIRECTORATE. Key points: 1. Contract awarded for IT support services, including project management, data analysis, and security. 2. The contract's value of $13.5 million over two years warrants scrutiny for cost-effectiveness. 3. Awarded as a 'not available for competition' action, limiting potential cost savings from broader bidding. 4. The contractor, Cayuse Federal Services LLC, will support the Army Communications-Electronics Command. 5. Performance period spans two years, with potential for extensions not detailed in this award. 6. The specific IT services required are critical for the Army's software engineering operations.

Value Assessment

Rating: questionable

The contract's value of $13.5 million for two years of IT support services requires careful benchmarking against similar government contracts. Without detailed breakdowns of labor categories, rates, and overhead, it is difficult to definitively assess value for money. The 'Cost Plus Fixed Fee' pricing structure can sometimes lead to higher costs if not tightly managed, especially when competition is limited. Further analysis of the proposed fixed fee and the estimated cost of the work is needed to determine if this represents a fair and reasonable price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' justification, indicating that the Army determined that only one source was capable of meeting the requirement. This significantly limits the competitive landscape, potentially leading to higher prices than if the contract had been fully and openly competed. The absence of multiple bidders means that price discovery through market forces was not fully utilized.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition. Without a competitive bidding process, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The U.S. Army Communications-Electronics Command (CECOM) Software Engineering Center (SEC) will benefit from enhanced IT support. Services include critical functions like project management, data analysis, security, and customer relations. The contract supports the operational readiness and efficiency of Army communication and electronic systems. Workforce implications are likely to involve the contractor's personnel supporting government IT functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The 'not available for competition' status requires thorough justification to ensure no viable alternatives were overlooked.
Cost Plus Fixed Fee contracts can incentivize cost overruns if not meticulously monitored.
Lack of transparency in the specific cost components makes independent value assessment challenging.

Positive Signals

The contract aims to provide essential IT support to a critical Army command.
Cayuse Federal Services LLC is tasked with ensuring the smooth operation of vital software engineering functions.
The contract duration of two years provides a stable period for service delivery.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on IT management, data analysis, and support for complex government systems. The market for IT support services to the federal government is substantial, with agencies constantly seeking to modernize and maintain their technological infrastructure. Comparable spending benchmarks would typically involve analyzing other IT support contracts awarded to similar-sized companies for comparable services within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of subcontracting requirements for small businesses (sb: false). This suggests that the primary awardee is likely a larger entity, and there may be limited direct opportunities for small businesses through this specific contract, either as prime contractors or through mandated subcontracting plans.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Army Communications-Electronics Command (CECOM) Contracting Officer and Contracting Officer's Representative (COR). Accountability measures will be tied to the performance standards outlined in the contract and the 'Cost Plus Fixed Fee' structure. Transparency is dependent on the agency's reporting practices and the level of detail made public regarding contract performance and expenditures. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
Command, Control, Communications, Computers, and Intelligence (C4I) Support Services
Federal IT Services Procurement
Software Engineering Support Contracts

Risk Flags

Limited competition
Cost Plus Fixed Fee structure
Sole-source award justification required
Potential for cost overruns
Performance risk for critical IT functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.4 million to CAYUSE FEDERAL SERVICES LLC. PROJECT MANAGEMENT, COMMUNICATIONS SUPPORT, DATA ANALYSIS AND OPERATIONS SUPPORT, SECURITY SUPPORT AND CUSTOMER RELATIONS IN SUPPORT OF U.S. ARMY COMMUNICATIONS-ELECTRONICS COMMAND (CECOM) SOFTWARE ENGINEERING CENTER (SEC), OPERATIONS DIRECTORATE.

Who is the contractor on this award?

The obligated recipient is CAYUSE FEDERAL SERVICES 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 $13.4 million.

What is the period of performance?

Start: 2024-06-26. End: 2026-06-25.

What is the specific justification for awarding this contract as 'not available for competition'?

The justification for awarding this contract as 'not available for competition' typically stems from a determination that only one source possesses the unique capabilities, specialized knowledge, or proprietary technology required to fulfill the requirement. For IT support services, this could involve specific expertise with legacy systems, unique security clearances, or a pre-existing relationship and deep understanding of the Army Communications-Electronics Command (CECOM) Software Engineering Center's (SEC) environment. Without this specific justification document, it is difficult to ascertain the precise reasons. However, such sole-source awards are generally reserved for situations where competition is impractical or impossible, and they are subject to strict government regulations to prevent abuse and ensure fair pricing where possible.

How does the 'Cost Plus Fixed Fee' (CPFF) pricing structure compare to other contract types for similar IT support services?

The 'Cost Plus Fixed Fee' (CPFF) pricing structure is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs plus a fixed amount of profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in research and development or complex IT projects. Compared to fixed-price contracts, CPFF can offer more flexibility but may carry a higher risk of cost overruns if not closely monitored, as the contractor is incentivized to incur costs to achieve the fixed fee. For IT support services, fixed-price or time-and-materials contracts might be preferred if the scope is well-defined and predictable, potentially offering better value for money. However, for highly specialized or evolving IT needs, CPFF can be appropriate if managed diligently.

What is Cayuse Federal Services LLC's track record with similar government IT support contracts?

Assessing Cayuse Federal Services LLC's track record with similar government IT support contracts would involve reviewing their past performance evaluations, contract history, and any reported issues or successes on federal procurement databases like SAM.gov or FPDS. Without specific data on their past performance in providing project management, data analysis, and security support for entities comparable to the Army Communications-Electronics Command (CECOM) Software Engineering Center (SEC), it's challenging to provide a detailed assessment. Generally, agencies look for contractors with a history of successful delivery, adherence to schedules and budgets, and positive past performance reviews when making sole-source or limited-competition awards. Further investigation into their contract portfolio and client feedback would be necessary.

What are the potential risks associated with this contract for the Army CECOM SEC?

Potential risks associated with this contract include cost overruns due to the CPFF structure, especially if the fixed fee is not adequately justified or if project scope creep occurs without proper change control. Another significant risk is the lack of competition, which could lead to suboptimal service quality or innovation compared to a more competitive environment. Contractor performance is also a risk; if Cayuse Federal Services LLC fails to deliver the required IT support effectively, it could impact the operations of the CECOM SEC. Furthermore, reliance on a single contractor for critical IT functions can create vendor lock-in and reduce the Army's flexibility in adapting to future technological needs or market changes.

How does this $13.5 million award compare to historical spending on similar IT support services by the Army?

Comparing this $13.5 million award to historical spending requires access to detailed historical contract data for the Army Communications-Electronics Command (CECOM) Software Engineering Center (SEC) or similar Army IT support functions. Without that specific historical context, it's difficult to definitively state whether this amount is high, low, or average. However, $13.5 million over two years for comprehensive IT support, including project management, data analysis, and security, suggests a significant investment. Benchmarking against other large IT support contracts within the Department of Defense could provide a relative perspective. Factors like the number of personnel supported, the complexity of systems managed, and the specific services rendered would influence the comparison.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 72632 COYOTE RD, PENDLETON, OR, 97801

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,594,057

Exercised Options: $16,769,174

Current Obligation: $13,449,468

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56JSR23D0002

IDV Type: IDC

Timeline