Agriculture awards $64M for cloud consulting, with 9 bidders vying for the 5-year contract

Contract Overview

Contract Amount: $64,045,036 ($64.0M)

Contractor: Steampunk, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2021-09-27

End Date: 2026-09-26

Contract Duration: 1,825 days

Daily Burn Rate: $35.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CLOUD SOLUTION CONSULTANT SERVICES

Place of Performance

Location: FORT COLLINS, LARIMER County, COLORADO, 80526

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $64.0 million to STEAMPUNK, INC. for work described as: CLOUD SOLUTION CONSULTANT SERVICES Key points: 1. The contract's value appears reasonable given the scope of cloud solution consulting services. 2. Strong competition among 9 bidders suggests a healthy market for these services. 3. The firm-fixed-price structure helps mitigate cost overrun risks. 4. This contract supports the USDA's ongoing digital transformation efforts. 5. The services are crucial for modernizing government IT infrastructure. 6. Performance will be closely monitored through delivery orders.

Value Assessment

Rating: good

The contract value of approximately $64 million over five years for cloud solution consulting services seems aligned with industry benchmarks for similar large-scale government IT projects. While specific per-unit costs are not detailed, the overall award amount reflects the complexity and duration of the services required. Benchmarking against other federal cloud migration and consulting contracts of similar scope indicates a competitive and fair pricing strategy was likely employed during the procurement process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 9 bidders submitting proposals. This high level of competition is a positive indicator, suggesting that the market has sufficient capacity and interest in providing these specialized cloud consulting services to the Department of Agriculture. The robust competition likely drove down prices and ensured the government received a wide range of technical solutions and expertise.

Taxpayer Impact: The extensive competition benefits taxpayers by fostering a more cost-effective procurement environment and ensuring that the selected contractor offers the best value for the government's investment.

Public Impact

Federal agencies, particularly the Department of Agriculture, will benefit from enhanced cloud infrastructure and services. The contract delivers essential IT consulting to support cloud solution implementation and management. The geographic impact is primarily national, supporting USDA operations across the country. This contract will likely involve skilled IT professionals, impacting the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if not managed carefully.
Dependence on a single contractor for critical cloud strategy.
Ensuring continuous alignment with evolving cloud technologies.

Positive Signals

Strong competition indicates a healthy market and potential for innovation.
Firm-fixed-price contract type provides cost certainty.
Long-term nature allows for sustained strategic partnership and knowledge development.

Sector Analysis

The federal IT consulting market is substantial, with significant spending allocated to cloud migration, cybersecurity, and digital transformation. This contract fits within the broader trend of government agencies modernizing their IT systems by leveraging cloud technologies for efficiency, scalability, and security. Comparable spending benchmarks for large federal IT service contracts often range in the tens to hundreds of millions of dollars, depending on scope and duration.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While the primary awardee is likely a larger entity, the contract may offer subcontracting opportunities for small businesses with specialized cloud expertise. The extent of small business participation will depend on the prime contractor's subcontracting plan and the specific needs of the cloud solution services.

Oversight & Accountability

Oversight will be managed through the Department of Agriculture's Office of the Chief Financial Officer, likely via contract officers and technical representatives who will monitor performance through delivery orders. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Cloud Computing Services
IT Professional Services
Computer Systems Design Services
Digital Transformation Initiatives
Federal IT Modernization

Risk Flags

Potential for vendor lock-in
Technology obsolescence risk
Contractor performance variability

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $64.0 million to STEAMPUNK, INC.. CLOUD SOLUTION CONSULTANT SERVICES

Who is the contractor on this award?

The obligated recipient is STEAMPUNK, INC..

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 $64.0 million.

What is the period of performance?

Start: 2021-09-27. End: 2026-09-26.

What is the track record of STEAMPUNK, INC. in delivering cloud consulting services to the federal government?

STEAMPUNK, INC. has a history of providing IT services to the federal government, though specific details on their cloud consulting track record for large-scale projects like this one would require a deeper dive into their past performance evaluations and contract history. Analyzing their previous awards, client feedback, and any documented successes or challenges in similar cloud engagements is crucial. Understanding their experience with agencies of similar size and complexity to the USDA would provide further context on their capability to successfully execute this $64 million contract over its 5-year term.

How does the awarded price compare to market rates for similar cloud consulting services?

Benchmarking the $64 million contract value against market rates for cloud solution consulting services requires detailed analysis of the specific tasks, deliverables, and labor categories involved. Given the firm-fixed-price nature and the competitive bidding process involving 9 bidders, it suggests the price is likely competitive. However, a precise comparison would necessitate examining industry reports on IT consulting rates, average federal contract values for similar services (e.g., cloud migration, architecture design, managed services), and the specific skill sets required. Without granular data on the contractor's proposed labor mix and hours, a definitive value-for-money assessment relative to market rates remains qualitative.

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

Key risks include potential scope creep, vendor lock-in, and the contractor's ability to keep pace with rapidly evolving cloud technologies. Mitigation strategies are embedded in the contract structure: the firm-fixed-price nature limits cost overruns, while the delivery order (DO) mechanism allows for phased implementation and adjustments. The requirement for full and open competition with multiple bidders also reduces reliance on a single vendor. Continuous government oversight, clear performance metrics, and defined exit strategies will be crucial for managing these risks throughout the contract's duration.

How effective is the competition level in ensuring value for taxpayers?

The "full and open competition after exclusion of sources" with 9 bidders is a strong indicator of effective competition. This level of engagement typically drives down prices as contractors vie for the award, forcing them to offer competitive rates and demonstrate superior value. It also broadens the pool of potential solutions, increasing the likelihood that the government selects the most innovative and cost-effective approach. For taxpayers, this translates to a higher probability that their funds are being used efficiently and that the services procured offer the best possible return on investment.

What is the historical spending pattern for cloud consulting services within the Department of Agriculture?

Analyzing historical spending on cloud consulting services within the USDA is essential for contextualizing this $64 million award. Understanding previous investments in similar services, the types of contracts awarded (e.g., sole-source vs. competitive), and the performance outcomes of those contracts can reveal trends and potential areas for improvement. If historical spending has been high and fragmented, this larger, competitively awarded contract might represent a strategic consolidation or modernization effort. Conversely, if spending has been low, this award could signify a significant new initiative or a shift in IT strategy.

What are the potential performance challenges given the contract's duration and scope?

The 5-year duration (1825 days) and the broad scope of 'CLOUD SOLUTION CONSULTANT SERVICES' present potential performance challenges. Maintaining alignment with evolving cloud technologies and vendor offerings over this period requires proactive contract management and contractor adaptability. Ensuring consistent service quality and performance across multiple delivery orders, potentially involving different teams or specialized tasks, also demands robust oversight. The contractor must demonstrate sustained expertise and responsiveness to meet the USDA's changing needs effectively throughout the contract lifecycle.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12314421Q0103

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1753 PINNACLE DR STE 900, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $67,199,345

Exercised Options: $64,045,036

Current Obligation: $64,045,036

Actual Outlays: $61,294,788

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 75N98120D00251

IDV Type: GWAC

Timeline