Commerce Department awards $3.4M for machine translation, with limited competition
Contract Overview
Contract Amount: $3,414,846 ($3.4M)
Contractor: Lilt Inc
Awarding Agency: Department of Commerce
Start Date: 2023-04-01
End Date: 2028-04-21
Contract Duration: 1,847 days
Daily Burn Rate: $1.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MACHINE TRANSLATION SOLUTION FOR TEXT PRODUCTS
Place of Performance
Location: EMERYVILLE, ALAMEDA County, CALIFORNIA, 94608
Plain-Language Summary
Department of Commerce obligated $3.4 million to LILT INC for work described as: MACHINE TRANSLATION SOLUTION FOR TEXT PRODUCTS Key points: 1. Value for money appears fair given the specialized nature of machine translation services. 2. Competition dynamics are limited, raising potential concerns about price discovery. 3. Risk indicators are moderate, with contract duration and fixed-price terms. 4. Performance context is tied to NOAA's need for advanced text processing. 5. Sector positioning is within IT services, specifically custom programming.
Value Assessment
Rating: fair
The contract value of $3.4 million over approximately five years for a machine translation solution seems within a reasonable range for specialized IT services. Benchmarking against similar custom computer programming contracts is challenging due to the niche application of machine translation for text products. However, the firm fixed-price structure provides cost certainty for the government, though it may limit flexibility if requirements evolve significantly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed openly, indicated by 'NOT AVAILABLE FOR COMPETITION'. This suggests a sole-source or limited competition award, potentially due to unique capabilities of the contractor or specific requirements. The lack of broad competition limits the government's ability to explore a wider range of solutions and potentially secure more competitive pricing through an open bidding process.
Taxpayer Impact: Limited competition can lead to higher prices for taxpayers as the government may not benefit from the full spectrum of market innovation and cost efficiencies that open competition typically fosters.
Public Impact
The National Oceanic and Atmospheric Administration (NOAA) is the primary beneficiary, gaining enhanced capabilities for processing text-based data. Services delivered include the development and implementation of a machine translation solution for text products. The geographic impact is primarily within NOAA's operational centers, likely supporting data analysis and dissemination. Workforce implications may involve training NOAA personnel to utilize the new translation system effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may result in suboptimal pricing.
- Potential for vendor lock-in due to specialized solution.
- Scope creep could increase costs if not managed tightly.
Positive Signals
- Firm fixed-price contract provides cost predictability.
- Long-term contract allows for sustained development and support.
- Specialized solution addresses a specific NOAA need.
Sector Analysis
This contract falls within the Information Technology sector, specifically under Custom Computer Programming Services (NAICS 541511). The market for machine translation and natural language processing is rapidly evolving, driven by advancements in AI and deep learning. While specific spending benchmarks for machine translation solutions are scarce, overall IT services spending by the federal government is substantial, with a significant portion allocated to custom software development and data processing.
Small Business Impact
The contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, LILT INC, is likely a larger entity, and the focus of this award is on specialized capabilities rather than promoting small business participation.
Oversight & Accountability
Oversight will likely be managed by the contracting officers and program managers within NOAA. Transparency is moderate, as contract details are publicly available through federal procurement databases. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver the specified solution within the agreed budget. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Federal Plain Language Initiative
- NOAA Data Modernization Program
- Custom Computer Programming Services
- Machine Translation Technologies
Risk Flags
- Limited competition may lead to higher costs.
- Potential for vendor lock-in.
- Scope definition critical for fixed-price contract success.
Tags
it, department-of-commerce, noaa, custom-computer-programming-services, definitive-contract, firm-fixed-price, limited-competition, machine-translation, california, lilt-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Commerce awarded $3.4 million to LILT INC. MACHINE TRANSLATION SOLUTION FOR TEXT PRODUCTS
Who is the contractor on this award?
The obligated recipient is LILT INC.
Which agency awarded this contract?
Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).
What is the total obligated amount?
The obligated amount is $3.4 million.
What is the period of performance?
Start: 2023-04-01. End: 2028-04-21.
What is the track record of LILT INC in delivering similar machine translation solutions to federal agencies?
Information regarding LILT INC's specific track record with federal agencies for machine translation solutions is not detailed in the provided data. A deeper dive into past performance evaluations, contract history, and client testimonials would be necessary to fully assess their capabilities and reliability. Federal procurement databases and agency-specific contract award histories could provide further insights into their experience with similar projects, including any challenges encountered and their resolution. Understanding their past success in delivering complex language processing systems is crucial for evaluating the risk associated with this award.
How does the pricing of this contract compare to market rates for similar machine translation services?
Direct comparison of this contract's pricing to market rates for similar machine translation services is difficult without more granular data on the specific functionalities and service levels required by NOAA. The $3.4 million award over approximately five years for custom programming suggests a specialized, potentially high-value solution. Market rates can vary significantly based on factors like language pairs supported, accuracy requirements, integration complexity, and ongoing support. Benchmarking would ideally involve analyzing pricing from other vendors offering comparable AI-driven translation platforms or custom development projects in the federal space, considering the unique demands of NOAA's text products.
What are the primary risks associated with a sole-source or limited competition award for this type of service?
The primary risks associated with a sole-source or limited competition award for machine translation services include potential overpayment due to lack of competitive pressure, reduced innovation from a smaller pool of bidders, and vendor lock-in. Taxpayers may bear a higher cost than if the contract were fully competed. Furthermore, the government might miss out on potentially superior or more cost-effective solutions offered by other companies. Ensuring the necessity of the sole-source justification and conducting thorough price reasonableness analysis are critical mitigation strategies.
How effective is the firm fixed-price contract structure in managing the risks of custom software development for machine translation?
A firm fixed-price (FFP) contract structure can be effective in managing risks for custom software development by establishing a ceiling on the government's financial liability. This provides cost certainty and incentivizes the contractor to control costs and deliver within the agreed budget. However, for complex, evolving technologies like machine translation, an FFP contract might also pose risks if the scope is not precisely defined or if unforeseen technical challenges arise. In such cases, the contractor may be disincentivized from incorporating necessary changes or improvements, potentially leading to a less optimal final product, or disputes over scope definition.
What is the historical spending trend for machine translation or similar language processing services within NOAA or the Department of Commerce?
Historical spending data specifically for 'machine translation solutions for text products' within NOAA or the Department of Commerce is not readily available in the provided contract details. To assess spending trends, one would need to analyze procurement records over several fiscal years, searching for keywords related to translation services, natural language processing, AI-driven text analysis, and custom software development within these agencies. Understanding past investments in similar technologies can provide context for the current $3.4 million award, indicating whether this represents an increase, decrease, or consistent level of spending in this area.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2200 POWELL ST, EMERYVILLE, CA, 94608
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $5,362,125
Exercised Options: $3,414,846
Current Obligation: $3,414,846
Actual Outlays: $1,801,768
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-04-01
Current End Date: 2028-04-21
Potential End Date: 2028-04-21 00:00:00
Last Modified: 2026-03-12
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