DoD's $1.41B Unisys Contract for System Sustainment Faces Scrutiny Over Time & Materials Pricing
Contract Overview
Contract Amount: $140,967,275 ($141.0M)
Contractor: Unisys Corporation
Awarding Agency: Department of Defense
Start Date: 2007-05-01
End Date: 2015-09-21
Contract Duration: 3,065 days
Daily Burn Rate: $46.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: SYSTEM SUSTAINMENT
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA (CITY) County, VIRGINIA, 22301, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $141.0 million to UNISYS CORPORATION for work described as: SYSTEM SUSTAINMENT Key points: 1. The contract's significant value of $1.41 billion over its lifespan highlights a substantial investment in system sustainment. 2. Competition was full and open, suggesting a potentially competitive bidding process, though pricing mechanisms warrant review. 3. The use of Time and Materials (T&M) pricing presents a risk for cost control and potential overruns. 4. This contract falls within the IT sector, crucial for defense operations and information management.
Value Assessment
Rating: questionable
The Time and Materials pricing structure, especially for a contract of this magnitude and duration, raises concerns about cost efficiency. Without fixed price elements or robust oversight, it's difficult to benchmark against similar sustainment contracts without detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, the T&M pricing model can undermine the benefits of competition if not carefully managed and monitored.
Taxpayer Impact: The T&M pricing model introduces uncertainty for taxpayers, as costs can escalate beyond initial projections if not effectively controlled through oversight and defined task orders.
Public Impact
Taxpayers may be exposed to higher costs due to the Time and Materials pricing structure. The long duration of the contract (over 8 years) means sustained potential for cost inefficiencies. Dependence on a single contractor for critical system sustainment over an extended period could pose operational risks if performance falters.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing
- Long contract duration
- Potential for cost overruns
- Limited visibility into actual costs
Positive Signals
- Full and open competition awarded
- Contract supports critical defense systems
Sector Analysis
This contract is within the Information Technology sector, specifically focusing on system sustainment for the Department of Defense. IT sustainment contracts can be complex, involving ongoing maintenance, upgrades, and support for critical infrastructure, often requiring significant long-term investment.
Small Business Impact
The provided data does not indicate any specific set-asides or participation goals for small businesses in this contract. Further investigation would be needed to determine the extent of small business involvement.
Oversight & Accountability
The Time and Materials pricing model necessitates strong oversight to ensure costs are reasonable and allocable to the contract. The Defense Information Systems Agency (DISA) would be responsible for monitoring contractor performance and expenditures to mitigate risks.
Related Government Programs
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Time and Materials pricing model
- Long contract duration
- Potential for cost overruns
- Lack of specific small business participation data
- High contract value
Tags
department-of-defense, va, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $141.0 million to UNISYS CORPORATION. SYSTEM SUSTAINMENT
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 $141.0 million.
What is the period of performance?
Start: 2007-05-01. End: 2015-09-21.
What was the average hourly rate for labor under this Time and Materials contract, and how does it compare to industry benchmarks for similar IT sustainment services?
Without specific labor rate data, it's impossible to provide an exact comparison. However, T&M contracts are inherently riskier for the government as they lack a ceiling on labor costs. Benchmarking would require access to detailed billing records and comparison with prevailing rates for comparable IT sustainment roles within the defense sector and the broader market.
What mechanisms were in place to control costs and prevent scope creep within this $1.41 billion Time and Materials contract awarded under full and open competition?
Effective cost control in T&M contracts typically relies on robust contract clauses, including labor hour limitations, fixed price components for specific deliverables, and strict oversight of all expenditures. Regular audits and performance reviews by the contracting officer are crucial. Scope creep is managed through a formal change order process and clear definition of work requirements.
How did the Defense Information Systems Agency ensure the effectiveness and efficiency of system sustainment services provided by Unisys Corporation over the contract's eight-year duration?
Effectiveness and efficiency are typically measured through performance metrics and service level agreements (SLAs) defined in the contract. DISA would likely have monitored key performance indicators (KPIs) related to system uptime, response times, resolution rates, and user satisfaction. Regular performance reviews and feedback mechanisms would inform ongoing contract management and potential adjustments.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: TIME AND MATERIALS (Y)
Contractor Details
Address: 8008 WESTPARK DRIVE, MCLEAN, VA, 22102
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $144,062,614
Exercised Options: $143,561,711
Current Obligation: $140,967,275
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DCA20002D5014
IDV Type: IDC
Timeline
Start Date: 2007-05-01
Current End Date: 2015-09-21
Potential End Date: 2015-09-21 00:00:00
Last Modified: 2015-09-22
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