Agriculture's $27M EAS Support Services contract awarded to Guidehouse Digital LLC without competition

Contract Overview

Contract Amount: $26,975,215 ($27.0M)

Contractor: Guidehouse Digital LLC

Awarding Agency: Department of Agriculture

Start Date: 2021-05-14

End Date: 2022-03-15

Contract Duration: 305 days

Daily Burn Rate: $88.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EAS SUPPORT SERVICES BRIDGE CONTRACT

Place of Performance

Location: FORT COLLINS, LARIMER County, COLORADO, 80526

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $27.0 million to GUIDEHOUSE DIGITAL LLC for work described as: EAS SUPPORT SERVICES BRIDGE CONTRACT Key points: 1. The contract's value of approximately $27 million for a 10-month period suggests a high daily burn rate, warranting scrutiny of efficiency. 2. Awarded on a sole-source basis, the lack of competition limits price discovery and potentially increases costs for taxpayers. 3. The 'Computer Systems Design Services' NAICS code indicates a focus on IT infrastructure and support, a critical area for agency operations. 4. The firm-fixed-price contract type aims to control costs, but the absence of competition may undermine this objective. 5. The contract duration of 305 days suggests a need for ongoing support, but the bridge nature of the award raises questions about long-term planning. 6. The contractor, Guidehouse Digital LLC, has a significant presence in government contracting, implying experience but also potential for established relationships influencing procurement.

Value Assessment

Rating: questionable

The contract's value of $26.98 million over 305 days equates to roughly $88,443 per day. Without specific deliverables or performance metrics, it is difficult to benchmark this cost effectively. However, given the lack of competition, it is probable that the pricing is not optimized. Comparing this to similar IT support contracts, especially those that have undergone competitive bidding, would likely reveal a higher cost per unit or per service provided.

Cost Per Unit: Approximately $88,443 per day. This figure is a high-level daily cost and lacks specific per-unit metrics for a precise benchmark. It is likely above market rates due to the sole-source award.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that the agency did not solicit bids from multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to proprietary technology or urgent needs. The lack of competition means that the agency did not benefit from a range of proposals and pricing structures, potentially leading to a less favorable outcome for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. Without competing offers, there is less assurance that the government secured the best possible price and value.

Public Impact

The primary beneficiaries are likely the internal operations of the Department of Agriculture's Office of the Chief Financial Officer, which relies on these EAS support services. The services delivered are related to computer systems design and support, crucial for maintaining the agency's IT infrastructure and financial management systems. The geographic impact is primarily within the agency's operational footprint, likely supporting federal employees and systems nationwide. The contract supports the IT workforce by engaging a contractor to provide specialized systems design and support expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs.
High daily cost warrants scrutiny for efficiency and value.
Bridge contract nature suggests potential gaps in long-term IT planning.
Lack of transparency in the justification for sole-source award.

Positive Signals

Firm-fixed-price contract type provides cost certainty.
Contractor has experience in government IT support services.
Awarded to support critical financial systems of the agency.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. Agencies rely heavily on these services for maintaining and upgrading complex IT infrastructures. The market is characterized by a mix of large system integrators and specialized service providers. This contract, valued at nearly $27 million, falls within the mid-to-large range for IT support services, especially for a specific office function. Comparable spending benchmarks for similar system design and support contracts can vary widely based on scope, duration, and competition.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Guidehouse Digital LLC, a large business, suggests that the primary focus was on acquiring the specific expertise needed, rather than promoting small business participation. This means that opportunities for small businesses to participate in this specific contract are likely limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's contracting officers and program managers. The firm-fixed-price nature provides some cost control, but the sole-source award necessitates careful monitoring of performance and deliverables to ensure value. Transparency regarding the justification for the sole-source award and the contractor's performance would be key accountability measures. There is no specific mention of Inspector General involvement, but they could investigate if performance issues or improprieties arise.

Related Government Programs

EAS Support Services
Computer Systems Design Services
IT Infrastructure Support
Financial Management Systems Support
Federal IT Contracting

Risk Flags

Sole-source award
Lack of competition
High daily cost
Bridge contract

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $27.0 million to GUIDEHOUSE DIGITAL LLC. EAS SUPPORT SERVICES BRIDGE CONTRACT

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 $27.0 million.

What is the period of performance?

Start: 2021-05-14. End: 2022-03-15.

What specific services were provided under this EAS Support Services bridge contract?

The contract falls under the NAICS code 541512 for Computer Systems Design Services. This typically includes services such as designing and integrating computer hardware and software systems, as well as providing consulting services related to IT infrastructure. For the Office of the Chief Financial Officer at the Department of Agriculture, these services likely involved supporting, maintaining, and potentially upgrading the Electronic Access System (EAS) or other critical financial IT systems. This could encompass system analysis, software development, network design, and IT project management to ensure the smooth operation of financial data processing and reporting.

How does the daily cost of approximately $88,443 compare to industry benchmarks for similar IT support services?

The daily cost of approximately $88,443 for computer systems design and support services is substantial. Without detailed scope of work and specific deliverables, a precise benchmark is challenging. However, for IT support and system design, daily rates for experienced consultants or teams can range from $1,000 to $5,000 per person, depending on specialization and seniority. If this daily cost represents a team of 20-30 highly specialized individuals, it might be within a plausible range for complex projects. However, given the sole-source nature of this contract, it is highly probable that this daily rate is at the higher end of the market or exceeds typical competitive pricing, suggesting potential overpayment.

What are the risks associated with awarding a bridge contract on a sole-source basis?

Awarding a bridge contract on a sole-source basis carries several risks. Firstly, it bypasses the competitive bidding process, which is designed to ensure the government receives the best value and price. This lack of competition can lead to inflated costs for taxpayers. Secondly, it may indicate a failure in the agency's long-term planning or procurement strategy, leading to a reliance on short-term, potentially more expensive, solutions. Thirdly, it can create a perception of favoritism or a lack of transparency, even if the award is justified. Finally, without competitive pressure, the contractor may have less incentive to optimize performance or control costs effectively.

What is the track record of Guidehouse Digital LLC in securing sole-source IT contracts with federal agencies?

Guidehouse Digital LLC is a prominent government contractor that frequently secures IT and consulting contracts across various federal agencies. While they possess extensive experience and capabilities, their track record includes both competitively awarded and sole-source contracts. Analyzing their past sole-source awards would reveal patterns in the types of services and justifications used. Agencies often turn to established contractors like Guidehouse for specialized expertise or when existing systems require continuity of support. However, a pattern of sole-source awards, even for capable contractors, warrants scrutiny to ensure that competition is not being unduly avoided.

What are the potential implications of this contract being a 'bridge' contract?

A 'bridge' contract is typically awarded to maintain essential services when a new contract is being procured through a competitive process, or when there are delays in the acquisition timeline. The implication here is that the Department of Agriculture needed continuous EAS support services and could not afford a gap while a new, potentially competitive, contract was being finalized. This suggests that the original contract may have expired or was ending, and the agency required an interim solution. Bridge contracts can be more expensive than competitively awarded long-term contracts due to their short-term nature and the urgency often associated with them.

How does the firm-fixed-price (FFP) contract type mitigate risks in this sole-source scenario?

The firm-fixed-price (FFP) contract type aims to provide cost certainty for the government by establishing a set price for the work. In this sole-source scenario, the FFP structure means that Guidehouse Digital LLC is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This shifts the risk of cost overruns from the government to the contractor. However, the effectiveness of FFP in a sole-source award is limited because the initial price itself may not have been competitively determined. While it controls cost escalation during performance, it does not guarantee that the starting price was the best possible value.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 12314421Q0060

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rnsolutions LLC

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

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

Financial Breakdown

Contract Ceiling: $26,975,215

Exercised Options: $26,975,215

Current Obligation: $26,975,215

Actual Outlays: $26,975,215

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline