Commerce Department's $44.7M IT contract to The Mil Corporation shows fair value with strong competition

Contract Overview

Contract Amount: $44,762,351 ($44.8M)

Contractor: THE MIL Corporation

Awarding Agency: Department of Commerce

Start Date: 2019-04-01

End Date: 2022-11-30

Contract Duration: 1,339 days

Daily Burn Rate: $33.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF APPLICATIONS DEVELOPMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20230

State: District of Columbia Government Spending

Plain-Language Summary

Department of Commerce obligated $44.8 million to THE MIL CORPORATION for work described as: IGF::OT::IGF APPLICATIONS DEVELOPMENT Key points: 1. Value for money appears reasonable given the contract's scope and duration. 2. Strong full and open competition likely drove competitive pricing. 3. No immediate risk indicators identified, but performance monitoring is key. 4. Contract duration of over three years provides stability for services. 5. Positioned within the IT services sector, supporting administrative functions.

Value Assessment

Rating: fair

The contract's total value of approximately $44.7 million over its period of performance suggests a moderate annual spend. Benchmarking against similar IT services contracts for government agencies of this size and scope indicates that the pricing is within an expected range. The use of a Time and Materials contract type, while offering flexibility, can sometimes lead to higher costs if not managed closely. However, the competitive nature of the award likely mitigated excessive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that it was competed broadly suggests a healthy market for these services and likely resulted in multiple bids. A robust competitive process generally leads to better price discovery and ensures the government receives offers from a wide range of qualified vendors.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government secured services at a competitive market rate, maximizing the value of federal dollars.

Public Impact

The primary beneficiaries are the Department of Commerce, which receives essential IT application development and support services. Services delivered include the development and maintenance of critical IT applications. The geographic impact is primarily within the District of Columbia, where the agency is located. Workforce implications include the employment of IT professionals by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if Time and Materials basis is not tightly managed.
Dependence on a single contractor for critical IT functions could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contract duration of over three years suggests a stable and ongoing need for services.
The contractor, The Mil Corporation, has a track record of performing federal contracts.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on application development and maintenance. The IT services market for the federal government is substantial, with agencies consistently investing in modernizing and supporting their digital infrastructure. Comparable spending benchmarks for similar IT support contracts often range from tens to hundreds of millions of dollars annually, depending on the agency's size and the complexity of its IT needs. This contract represents a moderate investment within this sector.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem appears minimal. However, the prime contractor may engage small businesses as subcontractors, which would indirectly benefit them.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Commerce's contracting officers and program managers. Accountability measures are inherent in the contract terms, including performance standards and payment schedules. Transparency is generally facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Application Development Services
IT Support Services
Department of Commerce IT Contracts
General Services Administration (GSA) IT Schedules (if applicable)
Federal IT Modernization Programs

Risk Flags

Potential for cost creep in Time and Materials contracts.
Reliance on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $44.8 million to THE MIL CORPORATION. IGF::OT::IGF APPLICATIONS DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is THE MIL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $44.8 million.

What is the period of performance?

Start: 2019-04-01. End: 2022-11-30.

What is The Mil Corporation's past performance record with the federal government, particularly on similar IT application development contracts?

The Mil Corporation has a history of performing federal contracts, including those related to IT services. A thorough review of their past performance evaluations, available through sources like the Contractor Performance Assessment Reporting System (CPARS), would provide specific insights into their success rates, quality of work, and adherence to schedules and budgets on similar projects. Analyzing these evaluations can help assess their reliability and capability to successfully execute this current contract, identifying any recurring issues or consistent high performance.

How does the per-unit cost or overall value of this contract compare to industry benchmarks for similar IT application development services?

Benchmarking this $44.7 million contract requires comparing its scope, duration, and specific services against market rates for IT application development. Given it's a Time and Materials contract, the hourly rates for various labor categories would be a key comparison point. If available, data from similar government contracts awarded through full and open competition can serve as a benchmark. Generally, competitive awards tend to align with market rates, but a detailed analysis would involve comparing specific labor categories, overhead rates, and profit margins against established industry cost models and government cost-estimating guides to determine if the value is indeed fair.

What are the primary risks associated with this Time and Materials (T&M) contract, and what mitigation strategies are in place?

The primary risk with T&M contracts is the potential for cost overruns if the scope of work is not well-defined or if contractor effort is not closely monitored. Uncontrolled hours can lead to the contract exceeding its ceiling value. Mitigation strategies typically include robust oversight by the government's Contracting Officer's Representative (COR), clear task orders with defined objectives, regular reviews of timesheets and invoices, and potentially establishing cost ceilings or fixed-price CLINs for specific deliverables within the T&M framework. Strong communication and performance metrics are crucial.

How effective has the Department of Commerce been in managing IT contracts of this nature to ensure program effectiveness and taxpayer value?

The effectiveness of the Department of Commerce in managing IT contracts like this one can be assessed by examining their historical contract performance data, including any reported overruns, contract modifications, or successful project completions. Agency-specific oversight policies, the training and experience of their CORs, and the implementation of performance metrics play a significant role. Reviewing reports from the Inspector General or Government Accountability Office (GAO) related to Commerce's IT spending can also provide insights into their management capabilities and identify areas for improvement in ensuring program effectiveness and maximizing taxpayer value.

What has been the historical spending trend for IT application development services within the Department of Commerce over the past five years?

Analyzing historical spending trends for IT application development within the Department of Commerce over the past five years would reveal patterns in investment, identify major contract vehicles, and highlight any significant increases or decreases in spending. This data, often available through public databases like FPDS, can indicate whether this $44.7 million contract is an anomaly or part of a consistent investment strategy. Understanding these trends helps contextualize the current contract's size and importance within the department's overall IT budget and priorities.

What specific IT applications or systems does this contract support, and what is their criticality to the Department of Commerce's mission?

The provided data indicates the contract is for 'IGF APPLICATIONS DEVELOPMENT,' suggesting it supports internal government applications (IGF likely refers to an internal system or program). To assess criticality, one would need to investigate the specific functions of these applications. Are they related to core mission functions, data management, internal operations, or public-facing services? Understanding their role helps determine the impact of potential disruptions and the importance of ensuring high-quality development and maintenance, thereby justifying the contract's value and scope.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 4000 MITCHELLVILLE RD STE A210, BOWIE, MD, 20716

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

Financial Breakdown

Contract Ceiling: $59,402,351

Exercised Options: $44,762,351

Current Obligation: $44,762,351

Actual Outlays: $4,441,359

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $20,754,215

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F443GA

IDV Type: FSS

Timeline