Agriculture's $6.5M IT services contract awarded to Koniag IT Systems, LLC without competition

Contract Overview

Contract Amount: $6,467,584 ($6.5M)

Contractor: Koniag IT Systems, LLC

Awarding Agency: Department of Agriculture

Start Date: 2025-06-05

End Date: 2026-06-04

Contract Duration: 364 days

Daily Burn Rate: $17.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FY25 GSD TECHNICAL SERVICES 6-MONTH BRIDGE CONTRACT PREVIOUS CONTRACT #12314423C0034

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Agriculture obligated $6.5 million to KONIAG IT SYSTEMS, LLC for work described as: FY25 GSD TECHNICAL SERVICES 6-MONTH BRIDGE CONTRACT PREVIOUS CONTRACT #12314423C0034 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies and market-driven pricing. 2. The contract value of approximately $6.5 million for a 12-month period warrants scrutiny for value for money. 3. Limited competition suggests a potential lack of urgency for the contractor to offer competitive pricing. 4. The 'Other Computer Related Services' NAICS code indicates a broad scope, requiring clear performance metrics. 5. This is a bridge contract, implying a need for continuity of services while a more permanent solution is sought. 6. The firm-fixed-price contract type provides cost certainty but shifts performance risk to the contractor.

Value Assessment

Rating: questionable

The contract value of $6.5 million for 12 months of 'Other Computer Related Services' appears high given the lack of competition. Without a competitive bidding process, it is difficult to benchmark this price against market rates or similar contracts. The firm-fixed-price structure offers predictability, but the absence of competitive pressure may lead to suboptimal pricing for the government. Further analysis of the specific services rendered and their necessity would be required to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when urgency precludes full and open competition. The lack of bidders means there was no opportunity to solicit offers from multiple vendors, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding. The government may be paying a premium for services due to the absence of market forces driving down prices.

Public Impact

The Office of the Chief Financial Officer within the Department of Agriculture benefits from continued IT services. Essential computer-related services will be maintained, ensuring the smooth operation of financial management systems. The contract's geographic impact is primarily within Alaska, where the contractor is based. The contract supports IT professionals, potentially maintaining existing jobs within the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Bridge contract nature suggests potential instability or lack of long-term planning.
Broad NAICS code requires careful monitoring to ensure services align with stated needs.
Lack of competition may reduce contractor incentive for innovation or service improvement.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract ensures continuity of critical IT services for the Office of the Chief Financial Officer.
Contractor is based in Alaska, potentially supporting regional economic activity.

Sector Analysis

The IT services sector is highly competitive, with numerous firms offering a wide range of capabilities. Contracts for 'Other Computer Related Services' (NAICS 541519) can encompass a broad spectrum of IT support, from network management to software development. The value of this $6.5 million contract for a 12-month period is moderate within the federal IT spending landscape. Comparable spending benchmarks for similar sole-source IT support contracts would typically show a wide variance depending on the specific services and complexity.

Small Business Impact

This contract was not set aside for small businesses, and the contractor, Koniag IT Systems, LLC, is not explicitly identified as a small business in the provided data. The absence of a small business set-aside means opportunities for small businesses to compete or subcontract are not guaranteed. Further investigation into Koniag IT Systems' size status and any subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of Agriculture's contracting officers and the Office of the Chief Financial Officer. As a sole-source award, it may receive heightened scrutiny from oversight bodies like the Government Accountability Office (GAO) or the agency's Inspector General, particularly concerning the justification for the non-competitive award. Transparency regarding the specific services and performance metrics will be crucial for accountability.

Related Government Programs

Department of Agriculture IT Support Contracts
Sole-Source IT Service Agreements
Federal Bridge Contracts
Office of the Chief Financial Officer IT Modernization

Risk Flags

Sole-source award
Lack of competition
Bridge contract

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $6.5 million to KONIAG IT SYSTEMS, LLC. FY25 GSD TECHNICAL SERVICES 6-MONTH BRIDGE CONTRACT PREVIOUS CONTRACT #12314423C0034

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 $6.5 million.

What is the period of performance?

Start: 2025-06-05. End: 2026-06-04.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and is a 'BRIDGE CONTRACT'. Typically, sole-source awards are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source is available, or in cases of urgent and compelling need where full and open competition is not feasible. For a bridge contract, the justification often relates to maintaining continuity of services while a new, competitively awarded contract is being finalized. Without further documentation from the agency, the precise reason for this sole-source award remains unclear but likely stems from the need to avoid a service gap.

How does the $6.5 million value compare to previous IT services contracts for the Office of the Chief Financial Officer?

The provided data references 'PREVIOUS CONTRACT #12314423C0034', but does not include its value or duration. To assess the value proposition, a comparison with the previous contract's cost and scope is essential. If this $6.5 million represents a significant increase or decrease, it warrants further investigation. Benchmarking against similar IT services contracts awarded by other federal agencies for comparable services and durations would also provide context. However, the sole-source nature of this award makes direct value-for-money comparisons challenging without detailed service descriptions and market data.

What are the key performance indicators (KPIs) and service level agreements (SLAs) for this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. For a 'DEFINITIVE CONTRACT' with a 'FIRM FIXED PRICE' structure, clear performance standards are crucial to ensure the contractor delivers the required 'Other Computer Related Services' effectively. The absence of this information in the summary data makes it difficult to assess the contractor's accountability and the government's ability to measure performance. These details would typically be found in the contract's statement of work (SOW) and would be critical for oversight.

What is the track record of Koniag IT Systems, LLC with federal contracts, particularly sole-source awards?

Koniag IT Systems, LLC has been awarded this sole-source contract valued at approximately $6.5 million. To assess their track record, a review of their past federal contract performance is necessary. This would include examining previous awards, contract types (competitive vs. sole-source), performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. Understanding their experience with similar IT services and their history with sole-source procurements would provide insight into their reliability and capability.

What are the risks associated with a sole-source bridge contract for critical IT services?

Sole-source bridge contracts carry several risks. Firstly, the lack of competition can lead to higher costs than a competitively procured contract, as the government may not benefit from market-driven price reductions. Secondly, a bridge contract implies a temporary solution, which could indicate potential planning deficiencies or delays in establishing a long-term strategy, potentially leading to service disruptions if not managed carefully. Thirdly, without the vetting process of a competitive bid, there's a risk that the chosen contractor may not be the most capable or cost-effective option available in the market. Finally, sole-source awards can sometimes face greater scrutiny from oversight bodies.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,467,584

Exercised Options: $6,467,584

Current Obligation: $6,467,584

Actual Outlays: $3,232,975

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline