Agriculture's $70M IT contract for crop insurance software awarded to Guidehouse Digital LLC

Contract Overview

Contract Amount: $70,366,781 ($70.4M)

Contractor: Guidehouse Digital LLC

Awarding Agency: Department of Agriculture

Start Date: 2020-09-29

End Date: 2025-03-31

Contract Duration: 1,644 days

Daily Burn Rate: $42.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DEPARTMENT OF AGRICULTURE INFORMATION TECHNOLOGY SUPPORT SERVICES (DAITSS) FPAC RMA CROP INSURANCE SOFTWARE DELIVERY AND SUPPORT SERVICES

Place of Performance

Location: LIBERTY, CLAY County, MISSOURI, 64068

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $70.4 million to GUIDEHOUSE DIGITAL LLC for work described as: DEPARTMENT OF AGRICULTURE INFORMATION TECHNOLOGY SUPPORT SERVICES (DAITSS) FPAC RMA CROP INSURANCE SOFTWARE DELIVERY AND SUPPORT SERVICES Key points: 1. Contract value represents a significant investment in modernizing critical agricultural data systems. 2. The award was made under a full and open competition, suggesting a robust market for these services. 3. Fixed-price contract type aims to control costs and provide predictability for the agency. 4. The duration of the contract indicates a long-term need for sustained software development and support. 5. The specific NAICS code points to a focus on custom programming rather than off-the-shelf solutions. 6. The BPA Call award mechanism suggests this is part of a larger, pre-negotiated framework agreement.

Value Assessment

Rating: good

The contract's firm fixed-price nature provides a degree of cost certainty. Benchmarking against similar custom computer programming services for large federal agencies suggests the pricing is within a reasonable range, though specific performance metrics and deliverables would be needed for a more precise valuation. The total award amount of over $70 million over its term indicates a substantial commitment, implying a critical need for the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of four bidders suggests a competitive marketplace for these specialized IT services. A competitive process generally leads to better price discovery and potentially more innovative solutions as vendors vie for the contract.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process which typically drives down costs and ensures the government receives the best value for its investment in critical IT infrastructure.

Public Impact

Farmers and agricultural stakeholders benefit from improved crop insurance software, leading to more efficient claims processing and program administration. The Department of Agriculture's Office of the Chief Financial Officer receives enhanced IT support for its financial and operational systems. The contract supports the delivery of essential services related to crop insurance, a vital program for agricultural stability. The geographic impact is national, as crop insurance programs serve agricultural producers across the United States. The contract likely supports a workforce of IT professionals, including software developers, engineers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed throughout the contract lifecycle.
Dependency on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring continued innovation and adaptation to evolving technological landscapes over the contract's multi-year term.

Positive Signals

Firm fixed-price contract structure provides cost predictability.
Full and open competition suggests a healthy market and potential for competitive pricing.
Long contract duration allows for sustained development and deep understanding of agency needs.
Award to an established IT services provider indicates a level of confidence in their capabilities.

Sector Analysis

This contract falls within the custom computer programming services sector, a key component of the broader IT services industry. The federal government is a significant consumer of these services, particularly for developing and maintaining complex, mission-critical systems. Spending in this area is driven by the need for specialized software solutions that support agency operations, data management, and citizen services. Comparable spending benchmarks would involve analyzing other large-scale IT development and support contracts within federal agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct beneficiaries of this prime contract. However, the prime contractor, Guidehouse Digital LLC, may engage small businesses as subcontractors, depending on their subcontracting plans and the nature of the work. The impact on the small business ecosystem would be indirect, primarily through potential subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Agriculture's contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of oversight through adherence to the defined scope and deliverables. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Federal IT Modernization Programs
Department of Agriculture Financial Systems
Crop Insurance Program IT Support
Custom Software Development Contracts
IT Services BPA Calls

Risk Flags

Contract Duration
Large Contract Value
Dependency on Single Vendor
Custom Software Development Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $70.4 million to GUIDEHOUSE DIGITAL LLC. DEPARTMENT OF AGRICULTURE INFORMATION TECHNOLOGY SUPPORT SERVICES (DAITSS) FPAC RMA CROP INSURANCE SOFTWARE DELIVERY AND SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE DIGITAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $70.4 million.

What is the period of performance?

Start: 2020-09-29. End: 2025-03-31.

What is Guidehouse Digital LLC's track record with the Department of Agriculture and similar federal IT contracts?

Guidehouse Digital LLC has a history of performing IT services for various federal agencies. While specific details on their past performance with the Department of Agriculture for this exact type of service would require deeper analysis of contract databases, their presence as a prime contractor on a $70M+ award suggests a demonstrated capability. Their portfolio likely includes custom software development, system integration, and IT support. Benchmarking their past performance on similar-sized, fixed-price contracts, particularly those involving complex software delivery and support, would provide further insight into their reliability and expertise in meeting federal requirements.

How does the pricing of this contract compare to similar custom computer programming services for federal agencies?

The firm fixed-price nature of this contract provides a baseline for cost control. To benchmark the value, one would compare the estimated annual cost or the cost per deliverable against similar custom computer programming services awarded by other federal agencies. Factors such as the complexity of the software, the level of support required, and the specific technologies involved influence pricing. Given the $70M+ value over approximately five years, the annual spend is substantial, suggesting a significant scope of work. A detailed comparison would involve analyzing the labor categories, rates, and overhead applied by other contractors on comparable projects.

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

Key risks include potential cost overruns if the scope is not well-defined (though mitigated by fixed-price), contractor performance issues impacting critical crop insurance functions, and technological obsolescence over the contract's lifespan. Mitigation strategies likely involve robust contract management, clear performance metrics and Service Level Agreements (SLAs), regular progress reviews, and potentially incorporating flexibility for technology refreshes. The Department of Agriculture's oversight mechanisms and the contractor's own quality assurance processes are crucial for managing these risks.

How effective is the crop insurance software delivery and support likely to be under this contract?

The effectiveness hinges on the contractor's ability to deliver high-quality, reliable software that meets the evolving needs of the USDA's crop insurance program. The full and open competition and the award to Guidehouse Digital LLC suggest a belief in their capability. Success will be measured by the software's performance, user satisfaction, timely delivery of updates and support, and its contribution to the efficient administration of crop insurance. The contract's duration allows for iterative development and refinement, which can enhance effectiveness over time.

What are the historical spending patterns for IT support services within the Department of Agriculture's FPAC RMA, and how does this contract fit?

Historical spending data for IT support services within FPAC RMA would reveal trends in investment in technology to support agricultural programs. This $70M+ contract represents a significant, focused investment in a critical area: crop insurance software. It suggests a strategic decision to consolidate or enhance these specific IT functions under a single, comprehensive contract. Analyzing past spending on similar services, whether through multiple smaller contracts or previous large agreements, would provide context for the scale and importance of this current award within the agency's overall IT budget and priorities.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12314420Q0063

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11490 COMMERCE PARK DR STE 340, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $70,366,781

Exercised Options: $70,366,781

Current Obligation: $70,366,781

Actual Outlays: $70,366,781

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 12760420A0004

IDV Type: BPA

Timeline