DoD's $19.6M IT services contract awarded to RGII Technologies, Inc. shows potential value concerns

Contract Overview

Contract Amount: $19,623,331 ($19.6M)

Contractor: Itsolutions NET Government Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-09-29

End Date: 2010-03-31

Contract Duration: 1,644 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200607!600344!2100!W81XWH!US ARMY MEDICAL RESEARCH ACQ ACT!GS35F5165H !C!N! !Y!W81XWH05F0760!P00001!20051104!20060930!827006594!827006594!053554382!N!RGII TECHNOLOGIES, INC !1997 ANNAPOLIS EXCHANGE P !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE ARUNDEL !MARYLAND !+000003816850!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541519!E! !6! ! !C! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! ! !C!N! ! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to ITSOLUTIONS NET GOVERNMENT SOLUTIONS, INC. for work described as: 200607!600344!2100!W81XWH!US ARMY MEDICAL RESEARCH ACQ ACT!GS35F5165H !C!N! !Y!W81XWH05F0760!P00001!20051104!20060930!827006594!827006594!053554382!N!RGII TECHNOLOGIES, INC !1997 ANNAPOLIS EXCHANGE P !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE… Key points: 1. The contract's value appears high relative to its duration and the number of delivery orders. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract was awarded as a delivery order under a larger IDIQ, indicating potential for task-specific pricing. 4. The contractor, RGII Technologies, Inc., has a long history of federal contracting. 5. The services provided fall under 'Other Computer Related Services', a broad category. 6. The contract's performance period spans over four years, suggesting a sustained need for services.

Value Assessment

Rating: fair

The total value of $19.6 million over approximately 1644 days (roughly 4.5 years) averages to about $11,936 per day. This daily rate is not inherently high or low without more context on the specific services rendered. However, considering it was a delivery order under a larger contract, the pricing for individual tasks would need to be benchmarked against similar IT services procured by the DoD. The fact that it was a time and materials contract also warrants scrutiny to ensure efficient labor utilization and prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery. This means multiple vendors had the opportunity to bid. However, the data does not specify the number of bids received for this particular delivery order, nor does it detail the bidding process for the parent IDIQ contract. A high number of bidders typically leads to more competitive pricing, but the ultimate value depends on the specific terms and rates negotiated.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and better value for money by allowing a wide range of qualified vendors to participate.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, which receives IT services. The services delivered are categorized under 'Other Computer Related Services', likely encompassing IT support, system maintenance, or development. The geographic impact is centered around the agency's operations, likely within the United States. Workforce implications include employment opportunities for IT professionals working for RGII Technologies, Inc. and potentially for government personnel overseeing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep in Time and Materials contracts if not closely monitored.
The broad 'Other Computer Related Services' category could mask inefficiencies or scope creep.
Long contract duration might indicate a lack of agile procurement or a need for more specific, shorter-term contracts.

Positive Signals

Awarded under full and open competition, suggesting a fair process.
The contractor has a long history, implying experience and stability.
The contract was a delivery order, allowing for specific tasking and potentially better control over individual service costs.

Sector Analysis

This contract falls within the Information Technology sector, specifically under IT professional services. The federal IT services market is substantial, with agencies like the Department of Defense being major spenders. Contracts in this space often involve software development, system integration, cybersecurity, and IT support. Benchmarking this contract's value would require comparison to other similar IT services contracts awarded by the DoD or other federal agencies, considering factors like service complexity, duration, and the specific IT domain.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (sb=false) and does not appear to be a small business prime contract (st=VA, likely referring to a large business contract). There is no explicit information on subcontracting plans or performance. Therefore, the direct impact on the small business ecosystem is likely minimal unless RGII Technologies, Inc. utilized small business subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a delivery order under a larger IDIQ, oversight would involve monitoring task order performance, costs, and adherence to contract terms. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Army IT Support Contracts
Other Professional Services Contracts
Information Technology Professional Services
Delivery Order Contracts

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Broad service category may lack specificity, hindering performance evaluation.
Need for detailed benchmarking of daily/hourly rates against market standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to ITSOLUTIONS NET GOVERNMENT SOLUTIONS, INC.. 200607!600344!2100!W81XWH!US ARMY MEDICAL RESEARCH ACQ ACT!GS35F5165H !C!N! !Y!W81XWH05F0760!P00001!20051104!20060930!827006594!827006594!053554382!N!RGII TECHNOLOGIES, INC !1997 ANNAPOLIS EXCHANGE P !ANNAPOLIS !MD!21401!01600!003!24!ANNAPOLIS !ANNE ARUNDEL !MARYLAND !+000003816850!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541519!E! !6! ! !C! ! !999

Who is the contractor on this award?

The obligated recipient is ITSOLUTIONS NET GOVERNMENT SOLUTIONS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2005-09-29. End: 2010-03-31.

What is the specific nature of the 'Other Computer Related Services' provided under this contract?

The provided data categorizes the service under NAICS code 541519, 'Other Computer Related Services'. This is a broad category that can encompass a wide range of IT activities beyond core software development or hardware maintenance. Examples include IT consulting, data processing services, computer disaster recovery services, and IT system integration services. Without further details from the contract's statement of work or task orders, it's difficult to pinpoint the exact services RGII Technologies, Inc. provided. However, given the Department of the Army as the agency, these services likely supported military operations, research, or administrative functions through IT solutions.

How does the average daily cost of this contract compare to similar IT services contracts awarded by the DoD?

The contract's total value of $19.6 million over 1644 days results in an average daily cost of approximately $11,936. Comparing this to similar DoD IT services contracts requires access to a benchmark database that normalizes for contract type (e.g., Time and Materials vs. Firm-Fixed-Price), service complexity, and specific IT domain (e.g., cybersecurity, software development, infrastructure support). Generally, IT services can range widely in daily cost. A daily rate in the thousands might be reasonable for highly specialized or mission-critical IT support involving senior personnel, but could be considered high for more routine IT maintenance. Further analysis would involve comparing specific task orders and labor categories.

What was the bidding landscape for the parent IDIQ contract under which this delivery order was issued?

The data indicates this was a delivery order (aw='DELIVERY ORDER') issued under a larger contract vehicle. While this specific delivery order was awarded under 'FULL AND OPEN COMPETITION', the nature and competitiveness of the parent IDIQ contract are crucial. If the parent IDIQ itself had limited competition or was awarded to a small pool of vendors, it could indirectly affect the pricing and options available for subsequent delivery orders. To fully assess the competitive landscape, one would need to examine the details of the parent IDIQ award, including the number of bidders, the selection criteria, and its overall contract type and duration.

What is RGII Technologies, Inc.'s track record with federal IT contracts, particularly with the Department of Defense?

RGII Technologies, Inc. has a significant history of federal contracting, with the provided data showing an award year of 1997. This indicates a long-standing presence in the government contracting space. Their involvement with the Department of Defense is also evident, as this contract was awarded by the Army. A deeper dive into their contract history would reveal the types of services they have provided, their performance ratings on past contracts, and their overall revenue from federal sources. A contractor with a long track record often implies experience and established processes, but also necessitates scrutiny of their recent performance and adaptability to evolving IT needs.

What are the potential risks associated with a Time and Materials contract of this magnitude and duration?

Time and Materials (T&M) contracts, like this one (pt='TIME AND MATERIALS'), carry inherent risks, especially for large-value, long-duration awards. The primary risk is cost overrun, as the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or fixed hourly rate. Without robust oversight and detailed tracking of labor hours and material usage, contractors may be incentivized to extend timelines or use more resources than necessary. For a contract valued at $19.6 million over 4.5 years, effective government monitoring of performance, progress, and resource allocation is critical to ensure value for money and prevent uncontrolled cost escalation.

How does the $19.6M award compare to overall federal spending on 'Other Computer Related Services' (NAICS 541519)?

Federal spending on NAICS code 541519, 'Other Computer Related Services', is substantial, often running into billions of dollars annually across various agencies. A single contract award of $19.6 million, while significant for the contractor and the specific program, represents a relatively small fraction of the total federal expenditure in this broad IT services category. To contextualize this award, one would compare it against the average contract size within this NAICS code, the total annual spending by the Department of the Army on similar services, and the number of other contracts awarded under 541519 during the same period. This helps determine if the award is typical, high, or low relative to the broader market.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Interactive Technology Solutions LLC (UEI: 101472970)

Address: 1997 ANNAPOLIS EXCHANGE P # 210, ANNAPOLIS, MD, 21401

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $892,600

Exercised Options: $4,785,434

Current Obligation: $19,623,331

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5165H

IDV Type: FSS

Timeline