DoD's $23.2M IT Services Contract with Afognak Diversified Services Raises Questions on Competition

Contract Overview

Contract Amount: $23,196,700 ($23.2M)

Contractor: Afognak Diversified Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-01-15

End Date: 2015-09-14

Contract Duration: 607 days

Daily Burn Rate: $38.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF RSA INFO TECHNOLOGY SERVICES

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to AFOGNAK DIVERSIFIED SERVICES, INC. for work described as: IGF::CT::IGF RSA INFO TECHNOLOGY SERVICES Key points: 1. Significant spending on IT services highlights the growing reliance on technology within the Department of Defense. 2. The sole-source nature of this contract limits competitive pricing and potentially higher costs for taxpayers. 3. Lack of competition poses a risk of suboptimal service delivery and missed opportunities for innovation. 4. The IT services sector is highly dynamic, requiring continuous evaluation of contract vehicles to ensure value.

Value Assessment

Rating: questionable

The contract value of $23.2M for IT services over 607 days appears high given the lack of competition. Benchmarking against similar definitive contracts for Computer Facilities Management Services (NAICS 541513) is difficult without more detailed scope of work, but the absence of competitive bidding suggests potential overpricing.

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. This significantly limits price discovery and the government's ability to secure the best possible value. The justification for sole-source procurement is not provided, which is a concern.

Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, meaning taxpayers may have overpaid for these IT services.

Public Impact

Taxpayers may have paid more than necessary due to the sole-source award. Limited transparency into the procurement process raises concerns about accountability. The Department of Defense's reliance on non-competed contracts can stifle innovation in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential overpricing
Limited transparency

Positive Signals

Contract awarded
Firm fixed price contract type

Sector Analysis

The Department of Defense is a major consumer of IT services, with significant spending allocated to maintaining and upgrading its complex technological infrastructure. Benchmarks for IT services vary widely based on scope, but large definitive contracts often exceed millions of dollars.

Small Business Impact

The contract was awarded to Afognak Diversified Services, Inc., a large business. There is no indication that small businesses were involved as subcontractors or that this procurement provided opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the justification was sound and that competitive procedures are utilized where feasible in the future. Accountability for procurement decisions is crucial to ensure taxpayer funds are used efficiently.

Related Government Programs

Computer Facilities Management Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for overpricing due to lack of competition.
Lack of transparency regarding justification.
No indication of small business participation.
Contract duration is substantial (607 days).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to AFOGNAK DIVERSIFIED SERVICES, INC.. IGF::CT::IGF RSA INFO TECHNOLOGY SERVICES

Who is the contractor on this award?

The obligated recipient is AFOGNAK DIVERSIFIED SERVICES, 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 $23.2 million.

What is the period of performance?

Start: 2014-01-15. End: 2015-09-14.

What was the specific justification for awarding this IT services contract on a sole-source basis, and was it adequately documented?

The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances, such as when only one responsible source can provide the required supplies or services. A thorough review of the contract file would be necessary to determine the validity and documentation of this justification.

How does the $23.2M contract value compare to market rates for similar Computer Facilities Management Services (NAICS 541513) procured competitively?

Without a detailed statement of work and specific performance metrics, a direct comparison is challenging. However, the absence of competition inherently prevents the government from leveraging market forces to achieve the lowest possible price. Benchmarking against competitively awarded contracts for similar services would likely reveal a significant price difference.

What measures are in place to ensure the effectiveness and value for money of IT services procured through sole-source contracts within the Department of Defense?

Oversight mechanisms for sole-source contracts typically involve rigorous contract management, performance monitoring, and post-award reviews. However, the inherent lack of pre-award competition means that value for money is primarily assessed through contract administration rather than upfront market validation. Agencies should have clear policies for justifying and managing sole-source awards.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Afognak Native Corp

Address: 3909 ARCTIC BLVD STE 400, ANCHORAGE, AK, 99503

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

Financial Breakdown

Contract Ceiling: $27,360,939

Exercised Options: $24,927,556

Current Obligation: $23,196,700

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline