DoD's $19.8M IT services contract with Chenega Technical Innovations awarded via sole-source justification

Contract Overview

Contract Amount: $19,855,507 ($19.9M)

Contractor: Chenega Technical Innovations, LLC

Awarding Agency: Department of Defense

Start Date: 2014-08-12

End Date: 2016-02-12

Contract Duration: 549 days

Daily Burn Rate: $36.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF S120D30 ENFIRE 6.0 SYSTEMS

Place of Performance

Location: DUMFRIES, PRINCE WILLIAM County, VIRGINIA, 22026

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to CHENEGA TECHNICAL INNOVATIONS, LLC for work described as: IGF::OT::IGF S120D30 ENFIRE 6.0 SYSTEMS Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's duration of 549 days suggests a need for sustained IT support, but the lack of competition hinders benchmarking. 3. Fixed-price contract type offers some cost certainty, but the absence of competitive bidding limits assurance of best value. 4. The 'Other Computer Related Services' NAICS code indicates a broad scope, making specific performance evaluation challenging without more detail. 5. Awarded by the Department of the Army, this contract falls under a sector with significant IT spending, highlighting the importance of competitive practices. 6. The contractor, Chenega Technical Innovations, LLC, has secured this award without facing direct competition, impacting taxpayer value.

Value Assessment

Rating: questionable

Benchmarking value for this $19.8 million contract is difficult due to its sole-source nature. Without competitive bids, it's impossible to definitively assess if the pricing reflects market rates or represents a fair value for the 'Other Computer Related Services' provided. The lack of comparison to similar competitively awarded contracts makes it challenging to determine if the government secured the best possible outcome. The fixed-price nature provides some cost control, but the absence of competition means the government may have overpaid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically reserved for situations where only one responsible source can provide the required services. The lack of competition means that multiple bidders were not considered, which limits the government's ability to leverage market forces to achieve the lowest possible price and highest quality. This method bypasses the standard procurement process designed to ensure fair and open competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically driven by competitive bidding. This limits the government's purchasing power and potentially reduces the funds available for other essential services.

Public Impact

The Department of the Army benefits from the IT services provided, ensuring operational continuity. The contract supports the delivery of 'Other Computer Related Services,' crucial for the agency's technological infrastructure. Services are likely concentrated within the agency's facilities in Virginia, where the contractor is based. The contract supports the workforce of Chenega Technical Innovations, LLC, contributing to employment in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or offer superior service.
Broad 'Other Computer Related Services' category makes it difficult to assess specific performance metrics and value.
Limited transparency into the justification for sole-source award could obscure potential issues.

Positive Signals

Fixed-price contract type offers some predictability in costs.
Award to a single contractor ensures continuity of services without interruption.
Contract duration suggests a recognized need for ongoing IT support.

Sector Analysis

The IT services sector is a significant area of federal spending, with agencies constantly seeking to modernize and maintain their technological infrastructure. This contract falls under the 'Other Computer Related Services' category, which can encompass a wide range of support functions. Federal spending in this area is highly competitive when open, but sole-source awards, like this one, represent a deviation from that norm. Comparable spending benchmarks are difficult to establish without knowing the specific services rendered, but the overall IT services market is vast.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no information provided regarding subcontracting plans or their impact on the small business ecosystem. The sole-source nature of the award also suggests that opportunities for small businesses to participate as prime contractors were not explored through a competitive process.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers and potentially an Inspector General's office, especially given the significant dollar amount. However, the sole-source nature of the award may limit the scope of oversight focused on competition and best value. Transparency regarding the justification for the sole-source award is crucial for accountability. Without a competitive process, the primary oversight focus would be on contract performance and adherence to terms.

Related Government Programs

IT Professional Services
Information Technology Support Services
Computer Systems Design Services
Defense IT Procurement
Sole-Source IT Contracts

Risk Flags

Sole-source award justification requires scrutiny.
Potential for overpayment due to lack of competition.
Limited transparency into specific services and performance metrics.
Contract duration without competitive re-evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to CHENEGA TECHNICAL INNOVATIONS, LLC. IGF::OT::IGF S120D30 ENFIRE 6.0 SYSTEMS

Who is the contractor on this award?

The obligated recipient is CHENEGA TECHNICAL INNOVATIONS, 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 $19.9 million.

What is the period of performance?

Start: 2014-08-12. End: 2016-02-12.

What specific IT services were provided under this contract, and how do they align with the 'Other Computer Related Services' NAICS code?

The provided data abbreviates the contract description as 'IGF::OT::IGF S120D30 ENFIRE 6.0 SYSTEMS'. While the exact nature of 'ENFIRE 6.0 SYSTEMS' is not detailed, the NAICS code 541519, 'Other Computer Related Services,' is broad. This typically includes services such as computer facilities management, IT support services, disaster recovery services, and IT consulting. Without further documentation, it's difficult to pinpoint the exact services rendered. However, the contract's value of $19.8 million suggests a substantial scope of work, likely involving ongoing support, maintenance, or development related to specific IT systems or infrastructure for the Department of the Army.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data explicitly states 'CT: NOT AVAILABLE FOR COMPETITION,' which is a common indicator for sole-source awards. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting, including exceptions to full and open competition. Common justifications for sole-source awards include unique capabilities of a single contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. Without the specific justification document (e.g., a Justification and Approval or J&A), the precise reason remains unknown. However, the agency must have documented a valid reason under FAR exceptions to bypass the competitive process.

How does the $19.8 million contract value compare to similar IT services contracts awarded by the Department of the Army?

Comparing this $19.8 million contract value to similar IT services contracts awarded by the Department of the Army is challenging without more specific details on the services provided and the contract type. However, the Department of the Army, like other branches of the DoD, awards numerous IT contracts ranging from small support agreements to multi-billion dollar enterprise-wide solutions. A $19.8 million contract is a significant award, falling into the mid-to-large tier for a single definitive contract. If this were a competitively awarded contract for similar services, one might expect multiple bids and potentially a lower final price due to competition. The sole-source nature makes direct value comparison difficult, as competitive pressures are absent.

What are the potential risks associated with awarding a contract of this size without competition?

The primary risk associated with awarding a $19.8 million contract without competition is the potential for inflated pricing and reduced value for taxpayer money. Without competitive bids, there is less incentive for the contractor to offer the most cost-effective solution. Other risks include a lack of innovation, as the contractor may not feel pressured to explore more efficient methods or technologies. Furthermore, it can limit opportunities for other capable businesses, including small businesses, to enter the market or expand their footprint within the federal sector. There's also a reduced ability to benchmark performance and pricing against industry standards.

What is the track record of Chenega Technical Innovations, LLC in securing government contracts, particularly sole-source awards?

The provided data indicates Chenega Technical Innovations, LLC as the contractor for this $19.8 million Department of the Army contract, awarded on a sole-source basis. To assess their track record, one would need to examine their broader contract history within federal agencies. This would involve looking at the number and value of contracts awarded, the types of services provided, and the competition levels for those awards. A history of frequent sole-source awards might suggest a specialized capability or a pattern of limited competition. Conversely, a diverse portfolio with many competitively won contracts would present a different picture. Without access to a comprehensive contract database search for Chenega Technical Innovations, LLC, a detailed assessment of their track record, especially regarding sole-source awards, cannot be provided.

How does the fixed-price contract type (PT: FIRM FIXED PRICE) influence the risk and value proposition for this sole-source award?

A Firm Fixed Price (FFP) contract type generally shifts most of the cost risk to the contractor, which is beneficial for the government. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For this $19.8 million sole-source award, the FFP structure provides cost certainty to the Department of the Army. However, the value proposition is still impacted by the lack of competition. While the price is fixed, it may have been set at a higher baseline due to the absence of competitive pressure. Therefore, while the government knows its maximum liability, it cannot be certain that this fixed price represents the best possible value achievable in a competitive market.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W5J9CQ14R0005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Chenega Corporation (UEI: 622692994)

Address: 3600 POINTE CENTER CT STE 110, DUMFRIES, VA, 22026

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, 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: $19,855,507

Exercised Options: $19,855,507

Current Obligation: $19,855,507

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline