DoD's $21M IT support contract awarded to McClendon, LLC shows potential value concerns

Contract Overview

Contract Amount: $21,084,334 ($21.1M)

Contractor: Mcclendon, LLC

Awarding Agency: Department of Defense

Start Date: 2008-08-06

End Date: 2014-02-27

Contract Duration: 2,031 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: PAX IT SUPPORT - BASE YEAR

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to MCCLENDON, LLC for work described as: PAX IT SUPPORT - BASE YEAR Key points: 1. Contract value appears high relative to duration, suggesting potential overspending. 2. Limited competition data available for this specific delivery order. 3. Contract type (Time and Materials) can pose cost control risks. 4. Performance period spans over five years, requiring sustained oversight. 5. IT support services are critical for defense operations. 6. Geographic concentration in Virginia may indicate regional IT support focus.

Value Assessment

Rating: fair

The total contract value of $21,084,334 over 2031 days (approximately 5.5 years) averages to roughly $10,381 per day. This daily rate, while not immediately alarming without specific service benchmarks, warrants closer examination. Comparing this to similar IT support contracts for the Department of Defense, especially those with similar scope and duration, would be crucial to determine if this represents a fair market price. The Time and Materials pricing structure, without clear cost ceilings or fixed labor rates, introduces a degree of uncertainty regarding ultimate value realization.

Cost Per Unit: $10,381 per day (average)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the data provided only specifies one award action (no: 1), which is typical for a delivery order against a larger contract vehicle. Without details on the number of bids received for this specific delivery order or the parent contract, it's difficult to definitively assess the level of competition. A robust competition typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially driving down prices and increasing the likelihood of securing the best value for public funds.

Public Impact

The Department of Defense benefits from essential IT support services, ensuring operational continuity. Personnel within the Department of Defense are the primary users of these IT support services. The contract's geographic focus is Virginia, impacting the local IT support ecosystem. Potential for a specialized IT workforce in Virginia to be engaged through this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored.
Lack of specific competition metrics for this delivery order makes value assessment challenging.
Long performance period requires sustained vigilance to ensure continued value.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
IT support is a critical function, indicating a focus on essential services.
Contract duration implies a stable, long-term need for these services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services. The IT services market is vast and highly competitive, with numerous providers ranging from large corporations to specialized small businesses. The Department of Defense is a significant consumer of IT services, often requiring complex and secure solutions. Benchmarking this contract's value would involve comparing its daily rate and scope against other IT support contracts awarded by federal agencies, particularly within the defense sector, considering factors like labor categories, service levels, and geographic location.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside for this contract. While this doesn't preclude small businesses from subcontracting, there's no explicit requirement noted. The absence of a small business set-aside means the primary focus was on securing the best overall offer through full and open competition. Further analysis would be needed to determine if any subcontracting opportunities were extended to small businesses by the prime contractor, McClendon, LLC.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant Department of the Army contracting and program management offices. Given the Time and Materials nature, rigorous monitoring of labor hours, rates, and work performed is essential. Transparency is facilitated through contract award databases, but detailed performance reports and audits are typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services
Computer Systems Design
Defense IT Support
Department of the Army Contracts
Time and Materials Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Long contract duration may limit flexibility in adopting new technologies.
Limited visibility into specific competition metrics for this delivery order.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to MCCLENDON, LLC. PAX IT SUPPORT - BASE YEAR

Who is the contractor on this award?

The obligated recipient is MCCLENDON, 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 $21.1 million.

What is the period of performance?

Start: 2008-08-06. End: 2014-02-27.

What is the track record of McClendon, LLC in performing similar IT support contracts for the federal government?

Assessing McClendon, LLC's track record requires examining their past performance on federal contracts, particularly those involving IT support and computer systems design services. This includes reviewing past performance evaluations, any documented issues or disputes, and the successful completion of similar projects. A history of successful, on-time, and within-budget performance on comparable contracts would indicate a lower risk profile. Conversely, a history of performance issues, contract terminations, or significant cost overruns would raise concerns about their capability to deliver effectively on this current $21 million contract. Federal procurement data systems and past performance databases are key resources for this analysis.

How does the average daily cost of this contract compare to industry benchmarks for IT support services in Virginia?

The average daily cost of approximately $10,381 for this contract needs to be benchmarked against industry standards for IT support services in the Virginia region. This comparison should consider the specific services provided (e.g., help desk, network management, system administration), the skill levels and seniority of the personnel required, and prevailing market rates. Factors such as security clearances, specialized certifications, and the complexity of the IT environment managed by the Department of the Army will influence these rates. Without detailed service level agreements and labor category breakdowns, a precise comparison is difficult, but general market data for IT professional services in the Washington D.C. metropolitan area (which includes Northern Virginia) can provide a reasonable proxy. If the daily rate significantly exceeds typical market rates for comparable services, it suggests potential overpricing or inefficient service delivery.

What are the primary risks associated with the Time and Materials (T&M) contract type for this IT support service?

The primary risk associated with the Time and Materials (T&M) contract type for this IT support service is the potential for cost overruns and a lack of definitive cost control. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. This structure places the burden of cost management on the government. If work is not meticulously tracked, if labor hours are inflated, or if inefficient practices are employed, the total cost can escalate significantly beyond initial estimates. Effective oversight, including detailed monitoring of hours worked, verification of tasks performed, and potentially establishing not-to-exceed (NTE) limits, is crucial to mitigate these risks and ensure value for taxpayer money.

What is the historical spending pattern for IT support services by the Department of the Army in Virginia?

Analyzing historical spending patterns for IT support services by the Department of the Army in Virginia is crucial for context. This involves examining aggregate spending on similar contract vehicles and service categories over the past several fiscal years. Understanding the typical volume of spending, the average contract values, and the number of contracts awarded in this region can help determine if the $21 million awarded to McClendon, LLC is an outlier or consistent with historical trends. Significant deviations from historical spending could indicate a change in requirements, a potential increase in demand, or possibly an area warranting further scrutiny regarding cost-effectiveness. This analysis helps in identifying potential budget fluctuations and resource allocation strategies within the DoD for IT support.

How does the duration of this contract (over 5 years) impact the government's ability to adapt to evolving IT needs?

A contract duration of over five years, as seen in this $21 million IT support contract, presents a dual-edged sword regarding the government's ability to adapt to evolving IT needs. On one hand, a longer duration provides stability and allows the contractor to develop deep institutional knowledge, potentially leading to more efficient and tailored support. It also reduces the administrative burden and cost associated with frequent re-competition. However, the rapid pace of technological change in the IT sector means that needs can shift significantly over a five-year period. A long-term contract might inadvertently lock the government into specific technologies or service models that become outdated. To mitigate this, contracts often include mechanisms for modification, service level adjustments, or phased transitions to newer technologies, but the government must actively manage these aspects to ensure continued relevance and adaptability.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: BAE Systems PLC (UEI: 217304393)

Address: 14900 BOGLE DR STE 300, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $21,084,334

Exercised Options: $21,084,334

Current Obligation: $21,084,334

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0116M

IDV Type: FSS

Timeline