Army awards $33M data center warranty contract to Countertrade Products, Inc. for 5 years

Contract Overview

Contract Amount: $33,083,804 ($33.1M)

Contractor: Countertrade Products, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-22

End Date: 2026-09-22

Contract Duration: 1,826 days

Daily Burn Rate: $18.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DIA DATA CENTER WARRANTY AND CORRECTIVE MAINTENANCE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20515

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to COUNTERTRADE PRODUCTS, INC. for work described as: DIA DATA CENTER WARRANTY AND CORRECTIVE MAINTENANCE Key points: 1. Contract value appears reasonable for a 5-year warranty and maintenance service for a data center. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. The contract's duration of 1826 days (5 years) aligns with typical IT hardware lifecycle expectations. 4. Performance is in Washington D.C., a key hub for federal IT infrastructure. 5. The contract type is Firm Fixed Price, which transfers risk to the contractor. 6. The NAICS code 541519 indicates a broad category for 'Other Computer Related Services'.

Value Assessment

Rating: good

The contract value of approximately $33 million over five years for data center warranty and corrective maintenance is within a reasonable range for such services. Benchmarking against similar contracts for enterprise-level data center support, this pricing appears competitive, especially considering the inclusion of corrective maintenance. The firm fixed-price structure further supports value by capping costs for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was open, specific sources may have been excluded based on pre-defined criteria, possibly related to specialized capabilities or existing infrastructure. The number of bidders is not explicitly stated, but the 'full and open' designation implies a robust competitive process was intended.

Taxpayer Impact: This competitive approach aims to ensure the government receives the best possible pricing and service by allowing multiple qualified vendors to bid, ultimately benefiting taxpayers through cost efficiencies.

Public Impact

The Department of the Army benefits from ensured operational continuity of its data center infrastructure. Services include warranty and corrective maintenance, crucial for maintaining IT system uptime. The contract's geographic impact is focused on Washington D.C., where the data center is located. This contract supports IT professionals and technicians involved in data center maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is required for maintenance.
Reliance on a single vendor for critical data center uptime could pose a risk.
The 'exclusion of sources' clause warrants further investigation into the rationale.

Positive Signals

Firm Fixed Price contract type minimizes cost uncertainty for the government.
Long-term warranty and maintenance agreement ensures system reliability.
Competition, even with exclusions, should drive service quality and reasonable pricing.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data center maintenance and support. The market for data center services is substantial, driven by the increasing reliance on digital infrastructure by government agencies. Comparable spending benchmarks for similar warranty and maintenance contracts can vary widely based on the scale and criticality of the data center, but a five-year term for a significant facility often represents a multi-million dollar investment.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses were likely the primary participants in the competition. There is no explicit information on subcontracting plans for small businesses within this award, which could represent a missed opportunity to engage the small business IT ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability is established through the Firm Fixed Price contract terms, requiring the contractor to deliver specified services. Transparency is generally maintained through contract award databases, though specific performance metrics and reporting details are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Data Center Operations and Maintenance
IT Hardware Warranty Services
Federal Data Center Consolidation Initiative
Information Technology Infrastructure Support

Risk Flags

Potential for vendor lock-in
Reliance on single provider for critical infrastructure
Clarity of 'corrective maintenance' scope
Adequacy of competition despite source exclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to COUNTERTRADE PRODUCTS, INC.. DIA DATA CENTER WARRANTY AND CORRECTIVE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is COUNTERTRADE PRODUCTS, 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 $33.1 million.

What is the period of performance?

Start: 2021-09-22. End: 2026-09-22.

What is the track record of Countertrade Products, Inc. in performing similar data center warranty and maintenance contracts for the federal government?

Information regarding Countertrade Products, Inc.'s specific track record with similar federal data center warranty and maintenance contracts is not detailed in the provided data. A thorough review would require examining past performance evaluations (e.g., CPARS reports), contract history, and any reported issues or successes on previous government engagements. Understanding their experience with the specific technologies and scale of the Army's data center is crucial for assessing their capability to fulfill this contract effectively. Without this historical performance data, it is difficult to definitively gauge their reliability and expertise in this specialized area.

How does the awarded price of $33 million compare to market rates for similar 5-year data center warranty and maintenance contracts?

The awarded price of approximately $33 million over five years for data center warranty and corrective maintenance appears to be within a reasonable range for enterprise-level support. However, a precise market comparison requires detailed knowledge of the specific data center's size, criticality, hardware configurations, and the scope of 'corrective maintenance' included. Generally, multi-year warranty and maintenance agreements for significant IT infrastructure represent substantial investments. The firm fixed-price nature of this contract helps mitigate cost escalation risks for the government. Further analysis would involve benchmarking against industry reports and similar government solicitations to confirm if the pricing is truly competitive.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential vendor lock-in due to specialized knowledge requirements, reliance on a single provider for critical uptime, and the possibility of unforeseen technical issues arising during the five-year term. Mitigation strategies are primarily embedded in the contract structure. The Firm Fixed Price (FFP) arrangement transfers much of the financial risk of cost overruns to the contractor. The 'Full and Open Competition After Exclusion of Sources' process, if well-executed, should have selected a capable vendor. Clear performance standards and service level agreements (SLAs) within the contract are essential for ensuring accountability and addressing service failures. Regular performance reviews and potential for contract termination clauses also serve as risk mitigation tools.

What is the expected effectiveness of this contract in ensuring the operational continuity of the Army's data center?

The effectiveness of this contract hinges on the contractor's ability to provide timely and competent warranty support and corrective maintenance. The five-year duration and FFP structure suggest a commitment to long-term reliability. The inclusion of corrective maintenance is critical, as it ensures that issues identified during the warranty period or post-warranty can be addressed promptly, minimizing downtime. The Army's effectiveness will be measured by the uptime of its data center, the speed of issue resolution, and the overall performance of the IT systems hosted within. Robust oversight and performance monitoring by the Army will be crucial to ensure the contractor meets or exceeds expectations.

What are the historical spending patterns for data center warranty and maintenance services by the Department of the Army?

Historical spending patterns for data center warranty and maintenance by the Department of the Army are not provided in the current data. To establish such patterns, one would need to analyze aggregated contract data over several fiscal years, looking at the total amount spent on similar services, the number of contracts awarded, the primary contractors, and the average duration and value of these contracts. Understanding historical spending can reveal trends in IT infrastructure investment, identify periods of significant upgrades or replacements, and provide a baseline for evaluating current spending levels and procurement strategies.

What does the 'exclusion of sources' in the competition type imply for the procurement process and potential bidders?

The 'Full and Open Competition After Exclusion of Sources' designation suggests that while the competition was intended to be broad, certain potential bidders were deliberately excluded from the outset. This exclusion is typically based on specific, pre-defined criteria outlined in the solicitation, such as unique technical capabilities, security clearances, past performance requirements, or specific certifications. It implies that the agency had a particular need that only a subset of the market could fulfill. For potential bidders, it means that understanding and meeting these exclusion criteria is paramount. For the agency, it aims to ensure that the competition focuses on vendors most likely to meet complex requirements, potentially leading to a more tailored and effective solution, though it may limit the breadth of competition.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7585 W 66TH AVE, ARVADA, CO, 80003

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $37,094,573

Exercised Options: $35,821,549

Current Obligation: $33,083,804

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC65B

IDV Type: GWAC

Timeline