DoD's $21.8M IT contract with Unisys Corporation shows mixed value and limited competition

Contract Overview

Contract Amount: $21,832,090 ($21.8M)

Contractor: Unisys Corporation

Awarding Agency: Department of Defense

Start Date: 2014-05-28

End Date: 2019-06-30

Contract Duration: 1,859 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF ENCORE II IT SOLUTIONS - LABOR

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to UNISYS CORPORATION for work described as: IGF::OT::IGF ENCORE II IT SOLUTIONS - LABOR Key points: 1. Contract value appears reasonable given the duration and scope, but specific performance metrics are needed for a definitive value-for-money assessment. 2. The contract was awarded under full and open competition, suggesting a competitive process, but the low number of bids warrants further investigation. 3. Potential risks include contractor performance dependency and the need for ongoing oversight to ensure continued value. 4. This contract falls within the IT services sector, supporting the Defense Information Systems Agency's operational needs. 5. The contract's fixed-price nature provides some cost certainty, but flexibility for scope changes may be limited.

Value Assessment

Rating: fair

The contract's total value of $21.8 million over approximately five years suggests an average annual spend of around $4.36 million. Benchmarking this against similar IT support contracts for defense agencies is challenging without more granular data on the specific services provided. However, the firm fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the scope is well-defined and stable. Further analysis would require comparing the delivered services and outcomes against industry standards and the pricing of comparable contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data shows only two bids were received. While full and open competition is generally preferred for maximizing competition, a low number of bidders can sometimes suggest barriers to entry, a niche market, or insufficient outreach. The limited number of bids may have constrained the price discovery process, potentially leading to a less competitive outcome than if more firms had participated.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in full and open competition. However, with only two bids, the actual savings realized may be less significant than in a more robustly contested procurement. Continued monitoring is advised to ensure the selected vendor provides optimal value.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Defense Information Systems Agency, which receives critical IT support services. The contract delivers essential IT solutions, likely encompassing infrastructure, software, or operational support, crucial for national security operations. The geographic impact is primarily within the Department of Defense's operational footprint, with potential implications for personnel in relevant IT roles. Workforce implications may include the need for specialized IT skills to support the contract, potentially impacting both government and contractor personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) could indicate potential for higher prices than a more competitive scenario.
Lack of detailed performance metrics makes it difficult to fully assess value for money.
Contract duration of nearly 5 years may require careful management to ensure continued relevance and cost-effectiveness.

Positive Signals

Awarded under full and open competition, allowing for broad market participation.
Firm Fixed Price contract type provides cost certainty for the government.
Contract supports critical IT functions for a major defense agency.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, a vast and critical component of government operations, particularly within defense. The IT services market is highly competitive, with numerous large and small businesses offering a wide range of specialized capabilities. Government spending in this sector is substantial, driven by the need for modernization, cybersecurity, and operational support. This specific contract, supporting the Defense Information Systems Agency (DISA), likely addresses core IT infrastructure or application support, a common requirement across federal agencies. Comparable spending benchmarks would typically involve analyzing IT support contracts of similar scope and duration awarded to other defense or civilian agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Unisys Corporation, may choose to subcontract portions of the work to small businesses as part of its overall business strategy. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were not specifically reserved.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Defense Information Systems Agency. Accountability measures are inherent in the firm fixed-price contract type, which places the financial risk on the contractor. Transparency is generally facilitated through contract award databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or identified.

Related Government Programs

Defense Information Systems Agency IT Support Services
Federal Civilian IT Services Contracts
Department of Defense IT Modernization Programs
IT Professional Services Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns (if scope poorly defined)
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to UNISYS CORPORATION. IGF::OT::IGF ENCORE II IT SOLUTIONS - LABOR

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 $21.8 million.

What is the period of performance?

Start: 2014-05-28. End: 2019-06-30.

What specific IT services were delivered under this contract, and how do they align with DISA's mission requirements?

The provided data indicates the contract's North American Industry Classification System (NAICS) code is 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. However, the contract description mentions 'IGF ENCORE II IT SOLUTIONS - LABOR' and the contracting agency is the Defense Information Systems Agency (DISA). This suggests a potential discrepancy or that the R&D code is being used for a broader IT services contract, which is not uncommon. Typically, DISA requires a wide array of IT services, including network operations, cybersecurity, enterprise IT services, cloud computing, and application development and sustainment. Without more specific line-item details or a more precise NAICS code, it's difficult to pinpoint the exact services. However, given the context of DISA, these services are critical for enabling military command and control, intelligence sharing, and business operations across the Department of Defense.

How does the $21.8 million contract value compare to similar IT support contracts awarded by DISA or other defense agencies?

Benchmarking the $21.8 million contract value requires comparing it to similar IT support contracts awarded by DISA or other Department of Defense agencies over a comparable period (approximately five years). DISA manages a vast portfolio of IT contracts, many of which are significantly larger or smaller depending on the scope and duration. For instance, major enterprise IT service contracts can run into hundreds of millions or even billions of dollars. Contracts for specific R&D or specialized IT support might fall within the tens of millions. To provide a precise comparison, one would need to identify contracts with similar service descriptions (e.g., network management, system integration, cybersecurity support) and similar contract types (e.g., firm-fixed-price) awarded within the last few years. The average annual spend of approximately $4.36 million for this contract appears moderate within the context of large defense IT spending, but its value proposition depends heavily on the criticality and scope of the services rendered.

What is Unisys Corporation's track record with government IT contracts, particularly with the Department of Defense?

Unisys Corporation has a long history of providing IT services to government agencies, including the Department of Defense. They have held numerous contracts across various agencies, covering areas such as infrastructure modernization, cloud migration, cybersecurity, and application development. Their track record includes both successes and challenges, as is common for large IT service providers. Analyzing their performance on specific past contracts, including any past performance evaluations, contract terminations, or significant disputes, would provide a clearer picture of their reliability and capability. For this particular contract (IGF ENCORE II), reviewing its performance history, including any awards or penalties, would be crucial. Generally, Unisys is considered a capable provider, but like any large contractor, their performance can vary depending on the specific contract and program requirements.

Given the firm fixed-price nature, what are the potential risks associated with scope creep or unforeseen technical challenges?

The firm fixed-price (FFP) contract type is designed to provide cost certainty for the government by shifting the risk of cost overruns to the contractor. However, FFP contracts are most effective when the scope of work is well-defined and unlikely to change significantly. The primary risk associated with scope creep in an FFP contract is that the contractor may be hesitant to perform work outside the defined scope without a formal contract modification, potentially leading to delays or disputes. Conversely, if the government requires additional work or changes requirements, a formal modification process is necessary, which can be time-consuming and may involve price adjustments. Unforeseen technical challenges can also pose a risk; if these challenges require significant additional effort or resources not originally anticipated, the contractor may incur losses, potentially impacting their ability or motivation to deliver effectively, or leading to requests for equitable adjustments. Robust contract management and clear communication channels are essential to mitigate these risks.

What does the low number of bidders (two) suggest about the market for these specific IT services?

A low number of bidders, such as the two received for this contract, can suggest several market dynamics. It might indicate that the market for these specific IT services is relatively niche, with only a few companies possessing the required expertise, clearances, or capacity. Alternatively, it could point to high barriers to entry, such as stringent security requirements, complex technical specifications, or significant pre-qualification hurdles that limit the pool of potential bidders. Another possibility is that the contract's value or duration was not sufficiently attractive to draw a larger number of competitors, or that outreach efforts to potential bidders were limited. In some cases, it might also reflect market consolidation where fewer large players dominate. Regardless of the specific reason, a low number of bidders generally reduces competitive pressure, potentially leading to higher prices and less innovation compared to a market with robust competition.

How has federal spending on IT services for the Department of Defense evolved over the past decade, and where does this contract fit in?

Federal spending on IT services for the Department of Defense (DoD) has been substantial and generally increasing over the past decade, driven by factors such as modernization efforts, cybersecurity imperatives, the rise of cloud computing, and the need to support global operations. The DoD is consistently one of the largest federal spenders on IT. This $21.8 million contract, awarded in 2014 and ending in 2019, represents a relatively small portion of the DoD's overall IT budget during that period. It likely falls under the category of specific IT support or R&D services rather than a large-scale enterprise IT transformation program. Its value is more in its specific contribution to DISA's operational capabilities than in its aggregate spending volume. Trends show a continued shift towards cloud services, data analytics, AI, and enhanced cybersecurity, which likely influenced subsequent contract awards beyond this one.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11720 PLAZA AMERICA DR, 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: $21,832,090

Exercised Options: $21,832,090

Current Obligation: $21,832,090

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102808D2027

IDV Type: IDC

Timeline