DoD's $66.9M IT support contract to NetCentrics Corporation shows fair value with moderate competition

Contract Overview

Contract Amount: $66,892,216 ($66.9M)

Contractor: Netcentrics Corporation

Awarding Agency: Department of Defense

Start Date: 2012-06-01

End Date: 2015-07-12

Contract Duration: 1,136 days

Daily Burn Rate: $58.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: SOLUTIONS DEV/PROJ/CHANGE/CONFIG SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $66.9 million to NETCENTRICS CORPORATION for work described as: SOLUTIONS DEV/PROJ/CHANGE/CONFIG SUPPORT Key points: 1. Contract provides essential IT support services for the Department of Defense. 2. Competition was robust, indicating potential for good price discovery. 3. Performance period was substantial, suggesting a need for consistent service delivery. 4. The fixed-price contract type offers some cost certainty for the government. 5. Contractor has a significant presence in the federal IT services market. 6. Spending aligns with broader federal IT modernization and support trends.

Value Assessment

Rating: good

The contract's total value of approximately $66.9 million over three years suggests a moderate annual spend for IT support services. Benchmarking against similar IT support contracts within the Department of Defense indicates that the pricing was likely competitive, especially given the full and open competition. The fixed-price contract type, while potentially limiting flexibility, provides a degree of cost control for the government. The value appears reasonable for the scope of services typically associated with computer facilities management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple bidders were likely considered. The presence of three bidders suggests a healthy level of competition for this IT support requirement. This competitive environment generally leads to better price discovery and encourages contractors to offer competitive terms and pricing to secure the award.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down costs and ensured the government received a fair price for the IT support services rendered.

Public Impact

The Department of Defense benefits from consistent and reliable IT infrastructure support, crucial for its operations. Services delivered include computer facilities management, supporting the operational readiness of defense systems. The contract's impact is primarily within the federal sector, supporting national defense initiatives. Workforce implications include employment for IT professionals skilled in facilities management and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single contractor for critical IT infrastructure could pose risks.
Scope creep could lead to cost overruns if not managed tightly under the fixed-price structure.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
Fixed-price contract type provides cost predictability for the government.
Contractor's established presence indicates experience in delivering similar services.

Sector Analysis

The federal IT services market is a significant sector, with agencies like the Department of Defense being major consumers. This contract falls under computer facilities management, a critical component of IT operations. Spending in this area is often driven by the need to maintain aging infrastructure, modernize systems, and ensure cybersecurity. Comparable spending benchmarks for IT support services vary widely based on scope, duration, and complexity, but this contract's value appears aligned with mid-to-large scale federal IT support engagements.

Small Business Impact

This contract was not specifically set aside for small businesses, and the prime contractor, NetCentrics Corporation, is a mid-sized company. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside suggests that the primary focus was on obtaining the best value through open competition, rather than specifically promoting small business participation at the prime contract level.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of Defense, ensuring adherence to contract terms and performance standards. Accountability measures are embedded in the fixed-price contract structure, which incentivizes the contractor to meet deliverables within the agreed budget. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed spending breakdowns may not always be publicly accessible.

Related Government Programs

Defense Information Systems Agency (DISA) IT Support Contracts
General Services Administration (GSA) IT Schedule Contracts
Department of Defense IT Modernization Programs
Federal Civilian Agency IT Services

Risk Flags

Potential for vendor lock-in
Reliance on single contractor for critical services
Scope creep risk in fixed-price contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.9 million to NETCENTRICS CORPORATION. SOLUTIONS DEV/PROJ/CHANGE/CONFIG SUPPORT

Who is the contractor on this award?

The obligated recipient is NETCENTRICS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $66.9 million.

What is the period of performance?

Start: 2012-06-01. End: 2015-07-12.

What is the track record of NetCentrics Corporation in delivering IT support services to the federal government?

NetCentrics Corporation has a notable track record in providing IT services to various federal agencies, including the Department of Defense. Their experience often encompasses areas such as network engineering, cybersecurity, cloud solutions, and IT infrastructure management. Prior contract performance data, available through sources like the Federal Procurement Data System (FPDS), would offer specific insights into their past performance ratings, on-time delivery, and adherence to budget on similar federal contracts. Generally, companies with sustained federal contracts demonstrate a capacity to navigate complex government procurement processes and meet stringent performance requirements.

How does the value of this contract compare to similar IT support contracts awarded by the Department of Defense?

The total contract value of approximately $66.9 million over three years places this contract in the mid-to-large range for IT support services within the Department of Defense. Annual spending averages around $22.3 million. When compared to other DoD IT support contracts, this value appears reasonable, particularly considering the scope of computer facilities management services. Larger, more complex IT modernization or cybersecurity initiatives can run into hundreds of millions or even billions of dollars. Smaller, more specialized support tasks might be in the single-digit millions. This contract's value suggests a significant but not exceptionally large IT support requirement.

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

Key risks include potential over-reliance on a single contractor for critical IT functions, the possibility of scope creep leading to cost increases despite the fixed-price structure, and performance issues impacting DoD operations. Mitigation strategies likely involved robust performance monitoring by a COR, clearly defined service level agreements (SLAs), and contingency planning for service disruptions. The competitive award process itself helps mitigate the risk of selecting an underqualified vendor. Furthermore, the fixed-price nature incentivizes the contractor to manage costs effectively, though it requires careful scope definition upfront.

How effective has NetCentrics Corporation been in fulfilling the IT support requirements under this contract?

Assessing the effectiveness requires access to specific performance reports and user feedback, which are not publicly detailed in the provided data. However, the contract's duration (over three years) and completion suggest that the services were delivered to a satisfactory level, meeting the DoD's requirements. Federal contracts typically include performance metrics and award-fee or incentive structures that drive contractor performance. Without specific performance reviews or data on contract modifications or disputes, a definitive judgment on effectiveness is limited, but the successful completion is a positive indicator.

What are the historical spending patterns for similar IT support services within the Department of Defense?

The Department of Defense consistently represents one of the largest federal spenders on IT services, including infrastructure management, software development, and cybersecurity. Historical data shows a trend of increasing IT expenditures driven by modernization efforts, evolving threats, and the need for advanced technological capabilities. Spending on computer facilities management, like that covered by this contract, is a stable component of the overall IT budget, essential for maintaining operational readiness. Fluctuations in spending can occur due to major system upgrades, shifts in strategic priorities, or budget reallocations.

What is the significance of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

This award type, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates that the initial solicitation may have had restrictions or specific requirements that led to the exclusion of certain potential offerors. However, the subsequent competition was conducted openly, allowing all responsible sources to submit proposals. This suggests that while there might have been initial filtering criteria, the final award decision was based on a broad competitive process among qualified bidders. It aims to balance specific agency needs with the principle of maximizing competition to achieve the best value for the government.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ003410R0046

Offers Received: 3

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: Haystax Technology , Inc. (UEI: 026295970)

Address: 1953 GALLOWS RD STE 860, VIENNA, VA, 22182

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

Financial Breakdown

Contract Ceiling: $74,130,078

Exercised Options: $66,892,216

Current Obligation: $66,892,216

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003411D0002

IDV Type: IDC

Timeline