DoD's $33.9M software production contract awarded to Unisys Corporation shows questionable value and limited competition

Contract Overview

Contract Amount: $33,941,104 ($33.9M)

Contractor: Unisys Corporation

Awarding Agency: Department of Defense

Start Date: 2015-12-01

End Date: 2016-11-30

Contract Duration: 365 days

Daily Burn Rate: $93.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PRODUCTION SOFTWARE

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.9 million to UNISYS CORPORATION for work described as: PRODUCTION SOFTWARE Key points: 1. The contract's value proposition is unclear given the lack of competitive bidding. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The contract's duration and fixed-price nature may limit flexibility for evolving needs. 4. Performance context is minimal, making it difficult to assess the effectiveness of the software produced. 5. This contract falls within the IT services sector, specifically 'Other Computer Related Services'.

Value Assessment

Rating: questionable

The total value of $33.9 million for software production over one year is substantial. However, without a competitive bidding process, it is difficult to benchmark this against market rates or similar contracts. The lack of transparency in pricing and the absence of comparative bids make it challenging to ascertain if the government received good value for its investment. Further analysis would be needed to determine if the pricing is aligned with industry standards for comparable software production services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' (sole-source) procurement method. This means that only one vendor, Unisys Corporation, was solicited for this requirement. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a bidding process. It also suggests that there may have been specific justifications for not opening the contract to other vendors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also reduces the opportunity for other businesses to compete for government contracts.

Public Impact

The primary beneficiary of this contract is the Department of Defense, which receives production software. The services delivered include the production of software, crucial for military operations and information systems. The geographic impact is primarily within Virginia, where the agency is located. Workforce implications are likely related to the IT and software development sectors, supporting Unisys Corporation's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Limited transparency in the sole-source award process.
Potential for vendor lock-in due to the absence of competitive alternatives.
Difficulty in assessing true market value without bids.

Positive Signals

Contract awarded to a known entity, Unisys Corporation.
Fixed-price contract can provide cost certainty if scope is well-defined.
Software production is a critical function for the agency.

Sector Analysis

The Information Technology (IT) sector is a significant area of federal spending. This contract for software production falls under IT services, specifically classified under NAICS code 541519 (Other Computer Related Services). The federal government consistently invests heavily in IT to maintain and upgrade its systems. Benchmarking this contract's value would require comparing it to other sole-source or competitively awarded software production contracts within the DoD or other federal agencies, considering the specific nature and complexity of the software.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract. This means that the primary economic benefit flows to the large prime contractor, Unisys Corporation, rather than being distributed within the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers within the Defense Information Systems Agency (DISA) and the Department of Defense. Accountability measures would be tied to the delivery of the software as per the contract's terms and conditions. Transparency is limited due to the sole-source award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Software Development Contracts
Defense Information Systems Agency Procurements
Sole Source IT Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency in procurement process.
Difficulty in assessing value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.9 million to UNISYS CORPORATION. PRODUCTION SOFTWARE

Who is the contractor on this award?

The obligated recipient is UNISYS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $33.9 million.

What is the period of performance?

Start: 2015-12-01. End: 2016-11-30.

What specific software was produced under this contract, and what was its intended use within the Department of Defense?

The provided data indicates the contract was for 'PRODUCTION SOFTWARE' under NAICS code 541519 (Other Computer Related Services). However, the specific nature, functionality, and intended operational use of this software are not detailed in the extract. To understand its impact, further investigation into contract line item numbers (CLINs), technical specifications, and associated documentation would be necessary. This would clarify whether the software supports critical defense systems, administrative functions, or other operational needs, and how its production contributed to the DoD's mission.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. Without further documentation from the agency (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the precise reason for not competing this $33.9 million contract remains unknown. This lack of competition raises concerns about potential missed opportunities for better pricing and innovation.

How does the $33.9 million contract value compare to similar software production contracts awarded by the DoD or other federal agencies?

Benchmarking the $33.9 million contract value is challenging without more specific details on the software's complexity and scope. However, as a sole-source award, it is inherently difficult to compare its value directly to competitively bid contracts, which typically yield lower prices. To assess value, one would need to identify comparable sole-source contracts for similar software production services within the DoD or other agencies, considering factors like duration, technical requirements, and contractor experience. The absence of competitive bids makes it hard to determine if this price reflects fair market value.

What is Unisys Corporation's track record with the Department of Defense, particularly for software production contracts?

Unisys Corporation has a history of contracting with the Department of Defense and other federal agencies. While this specific contract was for 'PRODUCTION SOFTWARE,' Unisys has been involved in various IT services, including software development, system integration, and IT management. Their track record with the DoD would need to be assessed by examining past performance evaluations, any contract disputes or awards, and the overall volume and nature of their previous work with the department. This particular $33.9 million contract, being sole-source, doesn't offer insights into their competitive performance for this specific service.

What are the potential risks associated with a sole-source award for critical software production?

Sole-source awards for critical software production carry several risks. Firstly, the lack of competition can lead to higher costs for taxpayers, as the government cannot leverage market forces to secure the best price. Secondly, it can result in vendor lock-in, making it difficult and costly to switch providers in the future. Thirdly, without competitive pressure, there might be less incentive for the contractor to innovate or maintain high-quality standards. Finally, the absence of multiple bids can obscure potential risks related to the contractor's capability or the proposed solution's suitability.

What oversight mechanisms are in place to ensure the effective delivery and quality of the software produced under this contract?

Oversight for this contract would primarily fall under the purview of the contracting officer and the Defense Contract Management Agency (DCMA) or equivalent oversight bodies within the Department of Defense. These mechanisms typically include monitoring contract performance against milestones, reviewing deliverables, ensuring compliance with technical specifications, and managing payments. For a sole-source contract, the emphasis on performance monitoring is crucial to ensure the government receives the intended value. Quality assurance would be dictated by the contract's terms, including acceptance criteria for the produced software.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HC102814R0025

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11720 PLAZA AMERICA DR TOWER III, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $33,941,104

Exercised Options: $33,941,104

Current Obligation: $33,941,104

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102815D0003

IDV Type: IDC

Timeline