USDA awards $8.99M contract for regional network services to KONIAG IT SYSTEMS, LLC

Contract Overview

Contract Amount: $8,989,894 ($9.0M)

Contractor: Koniag IT Systems, LLC

Awarding Agency: Department of Agriculture

Start Date: 2024-07-23

End Date: 2026-07-22

Contract Duration: 729 days

Daily Burn Rate: $12.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USDA REGIONAL NETWORK SERVICES

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Agriculture obligated $9.0 million to KONIAG IT SYSTEMS, LLC for work described as: USDA REGIONAL NETWORK SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract duration of 729 days suggests a need for sustained network support. 3. Fixed-price contract type aims to control costs, but the absence of competition raises concerns. 4. The award to a single vendor may indicate specialized capabilities or a lack of market alternatives. 5. Geographic focus on Alaska (AK) suggests specific regional infrastructure requirements. 6. The contract's value is moderate, requiring careful monitoring for performance and cost-effectiveness.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards or detailed cost breakdowns. The fixed-price nature provides some cost certainty, but the lack of competition prevents a direct comparison of pricing against market alternatives. Further analysis would be needed to determine if the $8.99 million represents a fair price for the specified regional network services in Alaska.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one vendor possesses the necessary qualifications or when circumstances prevent a competitive solicitation. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from multiple bids.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. This could lead to higher overall costs for the services provided.

Public Impact

The primary beneficiaries are likely the USDA offices and personnel operating within the specified regional network in Alaska, who will receive essential telecommunications support. The services delivered are crucial for maintaining operational connectivity and data exchange for USDA operations in the region. The geographic impact is concentrated in Alaska, addressing the unique telecommunications challenges and infrastructure needs of that state. Workforce implications are indirect, supporting the operational capacity of USDA employees rather than directly creating new jobs through this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-sourcing.
Potential for vendor lock-in due to specialized regional needs.

Positive Signals

Fixed-price contract type provides cost predictability.
Award to a single vendor may indicate specialized expertise required for Alaska's unique environment.
Contract duration suggests a commitment to stable network services.

Sector Analysis

The telecommunications sector is vital for government operations, providing the backbone for communication and data transfer. This contract falls under the 'All Other Telecommunications' category, suggesting services beyond standard voice or data, possibly involving specialized network infrastructure or management. The market for such services can be highly specialized, particularly in remote or challenging geographic areas like Alaska, which may justify sole-source awards if unique capabilities are required.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Furthermore, the sole-source nature of the award means that subcontracting opportunities for small businesses are not guaranteed through a competitive process. The impact on the small business ecosystem is likely minimal unless KONIAG IT SYSTEMS, LLC proactively engages small businesses for subcontracting.

Oversight & Accountability

Oversight of this contract will likely be managed by the USDA's Office of the Chief Financial Officer. Accountability measures will be tied to the terms of the firm fixed-price contract, focusing on delivery of specified network services. Transparency may be limited due to the sole-source nature, but contract performance data should be available through federal procurement databases.

Related Government Programs

USDA IT Services
Regional Telecommunications Support
Alaska Federal Infrastructure Contracts
Sole-Source IT Awards

Risk Flags

Sole-source award may lead to higher costs.
Limited competition could reduce innovation.
Potential for vendor lock-in.
Geographic challenges in Alaska may impact service delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $9.0 million to KONIAG IT SYSTEMS, LLC. USDA REGIONAL NETWORK SERVICES

Who is the contractor on this award?

The obligated recipient is KONIAG IT SYSTEMS, 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 $9.0 million.

What is the period of performance?

Start: 2024-07-23. End: 2026-07-22.

What is the track record of KONIAG IT SYSTEMS, LLC with federal contracts, particularly with the USDA?

KONIAG IT SYSTEMS, LLC has a history of receiving federal contracts. Analyzing their past performance, especially with the Department of Agriculture, is crucial. This includes examining the types of services they have provided, their performance ratings on previous contracts, and any history of contract modifications or disputes. A review of their contract history can indicate their reliability and capability in delivering IT and telecommunications services. For instance, if they have successfully managed similar network services in challenging environments, it would bolster confidence in this award. Conversely, any past performance issues would raise concerns about the current contract's potential risks.

How does the awarded amount of $8.99 million compare to similar regional network service contracts awarded by the USDA or other agencies?

Comparing the $8.99 million award to similar contracts is essential for assessing value for money. However, this is complicated by the sole-source nature and the specific geographic focus on Alaska. Ideally, one would benchmark against other sole-source awards for comparable telecommunications services in remote regions, or against competitively bid contracts if any exist. Without direct comparable data, it's difficult to definitively state if this price is optimal. Factors such as the complexity of Alaska's infrastructure, the specific technical requirements, and the duration of the contract (729 days) must be considered in any value assessment. A detailed cost analysis by the agency would be beneficial.

What specific risks are associated with awarding this contract on a sole-source basis?

The primary risk associated with a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced innovation. Taxpayers may be overpaying for the services rendered. Another risk is vendor lock-in, where the agency becomes dependent on a single provider, making it difficult and costly to switch vendors in the future. Furthermore, the absence of multiple bidders can sometimes indicate a lack of market availability or a failure by the agency to adequately explore competitive options. This can also limit the agency's ability to leverage new technologies or more cost-effective solutions that might be offered by other vendors.

What is the expected effectiveness of the regional network services provided under this contract for USDA operations in Alaska?

The effectiveness of the regional network services is critical for the USDA's operational capacity in Alaska. Reliable telecommunications are essential for data transmission, communication between offices, and access to critical systems. Given the contract's duration and the specific nature of 'All Other Telecommunications,' it suggests a comprehensive solution is intended. The effectiveness will depend on the contractor's ability to maintain high uptime, provide adequate bandwidth, ensure security, and offer responsive support, especially considering Alaska's unique logistical and environmental challenges. Performance metrics within the contract will be key indicators of its success.

What are the historical spending patterns for regional network services by the USDA, and how does this contract fit within them?

Analyzing historical spending patterns for regional network services by the USDA can provide context for this $8.99 million award. Understanding the typical scale, frequency, and types of contracts awarded in this category helps determine if this contract is an outlier or part of a consistent trend. If the USDA has a history of awarding similar sole-source contracts in Alaska or for specialized telecommunications, it suggests a recurring need and a potentially established approach. Conversely, if this award represents a significant increase or a departure from past practices, further investigation into the underlying reasons and justification would be warranted.

Industry Classification

NAICS: Information › All Other Telecommunications › All Other Telecommunications

Product/Service Code: IT AND TELECOM - DELIVERY

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 12314423R0023

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 700, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,989,894

Exercised Options: $8,989,894

Current Obligation: $8,989,894

Actual Outlays: $2,717,458

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline