DoD's Army awards $148M IT hardware contract to Dynamic Systems Inc. for USACE, emphasizing full and open competition

Contract Overview

Contract Amount: $148,269,374 ($148.3M)

Contractor: Dynamic Systems Inc

Awarding Agency: Department of Defense

Start Date: 2025-01-23

End Date: 2027-01-23

Contract Duration: 730 days

Daily Burn Rate: $203.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CIO/G6 - S24-0059 INFORMATION TECHNOLOGY (IT) HARDWARE CATALOG 5 (ITHC5) - PURCHASE VARIOUS APPROVED IT EQUIPMENT AND ACCESSORIES FOR USACE.

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $148.3 million to DYNAMIC SYSTEMS INC for work described as: CIO/G6 - S24-0059 INFORMATION TECHNOLOGY (IT) HARDWARE CATALOG 5 (ITHC5) - PURCHASE VARIOUS APPROVED IT EQUIPMENT AND ACCESSORIES FOR USACE. Key points: 1. Contract aims to procure a wide range of IT hardware and accessories for the U.S. Army Corps of Engineers (USACE). 2. The award utilizes a full and open competition, suggesting a robust market engagement. 3. The contract duration is two years, with a firm-fixed-price structure. 4. The primary contractor, Dynamic Systems Inc., is a key player in this IT hardware supply chain. 5. This contract falls under the broader category of IT hardware procurement for federal agencies. 6. The contract value of $148.3 million over two years indicates significant IT infrastructure needs for USACE.

Value Assessment

Rating: good

The contract value of $148.3 million over two years for IT hardware procurement appears reasonable given the scope of supporting the U.S. Army Corps of Engineers. Benchmarking against similar large-scale IT hardware catalog contracts suggests that pricing is likely competitive due to the full and open competition. The firm-fixed-price structure provides cost certainty for the government. However, a detailed analysis of specific item pricing against market rates would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit offers. The solicitation likely attracted multiple bidders, fostering a competitive environment that should drive favorable pricing and terms for the government. The use of a broad IT hardware catalog further supports a wide range of potential suppliers.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to obtain the best possible value for essential IT hardware.

Public Impact

The U.S. Army Corps of Engineers (USACE) will benefit from access to a broad range of approved IT equipment and accessories, supporting its diverse missions. This contract ensures the availability of necessary technology for USACE operations, potentially impacting infrastructure projects, environmental management, and disaster response. The geographic impact is nationwide, as USACE operates across the United States and internationally. The contract supports the IT workforce within USACE by providing them with up-to-date hardware, enhancing productivity and operational capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific proprietary hardware is heavily favored within the catalog.
Risk of obsolescence if the IT hardware catalog is not frequently updated to reflect technological advancements.
Dependence on a single prime contractor for a wide array of IT needs could pose supply chain risks.

Positive Signals

The use of a broad IT hardware catalog streamlines procurement, offering a one-stop shop for various IT equipment needs.
Firm-fixed-price contract type provides budget predictability and limits the government's exposure to cost overruns.
Full and open competition is a positive signal for market responsiveness and potential for competitive pricing.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on hardware procurement. The IT hardware market is vast and highly competitive, with numerous manufacturers and resellers. Federal agencies are significant consumers of IT hardware, driving demand for everything from basic computing devices to specialized networking equipment. This contract, valued at over $148 million, represents a substantial portion of IT hardware spending for a major government entity like USACE, and it fits within the broader trend of agencies consolidating IT procurement through large-scale agreements to achieve economies of scale and streamline acquisition processes.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this specific contract. While the contract itself is not set aside for small businesses, the prime contractor, Dynamic Systems Inc., may engage small businesses as subcontractors to fulfill parts of the contract requirements. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific needs of the IT hardware catalog. Further investigation into the subcontracting plan would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Army Corps of Engineers contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated through the contract award process, which, being full and open competition, involves public solicitations and award announcements. The Inspector General's office for the Department of Defense may conduct audits or investigations if any performance or financial irregularities are suspected.

Related Government Programs

IT Hardware Procurement
General Services Administration (GSA) Schedules
Department of Defense IT Modernization Programs
Army Corps of Engineers Information Technology Services

Risk Flags

Potential for hardware obsolescence
Supply chain disruption risk
Dependence on prime contractor's IT support capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $148.3 million to DYNAMIC SYSTEMS INC. CIO/G6 - S24-0059 INFORMATION TECHNOLOGY (IT) HARDWARE CATALOG 5 (ITHC5) - PURCHASE VARIOUS APPROVED IT EQUIPMENT AND ACCESSORIES FOR USACE.

Who is the contractor on this award?

The obligated recipient is DYNAMIC SYSTEMS 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 $148.3 million.

What is the period of performance?

Start: 2025-01-23. End: 2027-01-23.

What is the track record of Dynamic Systems Inc. in fulfilling large federal IT hardware contracts?

Dynamic Systems Inc. has a history of engaging with federal agencies for IT hardware solutions. While specific details on past performance for contracts of this exact magnitude and scope are not detailed in the provided data, their presence as a prime contractor suggests prior experience. Federal procurement databases often contain past performance information, which would be crucial for a comprehensive assessment. Generally, agencies evaluate a contractor's past performance on similar contracts, including their ability to meet delivery schedules, quality standards, and budgetary constraints. A review of their contract history, including any awards, modifications, and terminations, would provide a clearer picture of their reliability and capability in executing large-scale federal IT hardware procurements.

How does the pricing of this contract compare to similar IT hardware procurements by other federal agencies?

A precise comparison of pricing requires access to detailed pricing data for specific IT hardware items within this contract and comparable contracts. However, the contract's value of approximately $148.3 million over two years for a broad IT hardware catalog suggests a significant investment. Given that it was awarded under full and open competition, it is reasonable to infer that the pricing is competitive. Agencies often benchmark prices against GSA Schedules, other agency-specific IDIQs, or market research data. Without specific item-level data, it's difficult to definitively state if the pricing is above or below market. However, the competitive nature of the award is a strong indicator of value-for-money.

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

Key risks include potential IT hardware obsolescence if the catalog is not updated frequently, supply chain disruptions affecting delivery, and the possibility of vendor lock-in if specific brands or configurations become dominant. Mitigation strategies likely involve contract clauses requiring regular catalog updates, performance metrics tied to delivery timelines, and potentially provisions for alternative sourcing. The firm-fixed-price structure mitigates financial risk for the government by capping costs. The full and open competition also reduces risk by ensuring a broad base of potential suppliers, lessening dependence on any single entity.

How effective is the full and open competition strategy in ensuring value for taxpayer money in this IT hardware procurement?

The full and open competition strategy is generally highly effective in ensuring value for taxpayer money, especially in a market like IT hardware where numerous vendors exist. By allowing all responsible sources to bid, the government maximizes the pool of potential suppliers, driving competition. This competition typically leads to lower prices, better quality, and more innovative solutions as contractors vie for the award. For this $148.3 million contract, the open competition suggests that the Army Corps of Engineers sought to leverage market forces to secure the best possible terms and pricing for a wide array of IT equipment, thereby optimizing the use of federal funds.

What is the historical spending pattern for IT hardware by the Department of the Army or USACE, and how does this contract fit?

Historical spending on IT hardware by the Department of the Army and USACE is substantial, reflecting the critical role of technology in military and engineering operations. Agencies like USACE require continuous upgrades and replacements of IT equipment to maintain operational readiness and efficiency. Contracts like this IT Hardware Catalog 5 (ITHC5) are designed to consolidate and streamline these procurements, often replacing numerous smaller, individual purchases. The $148.3 million award represents a significant, but likely consistent, investment in maintaining and modernizing USACE's IT infrastructure, fitting into a pattern of ongoing, large-scale hardware acquisition to support its widespread mission requirements.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dynamic Systems, Inc.

Address: 880 N PARK VIEW DR, EL SEGUNDO, CA, 90245

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: $186,452,407

Exercised Options: $148,269,374

Current Obligation: $148,269,374

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J16D0009

IDV Type: IDC

Timeline