Commerce Dept. awards $4.1M for website support to StraitSys Inc., raising questions on competition and value

Contract Overview

Contract Amount: $412,711 ($412.7K)

Contractor: Straitsys Inc

Awarding Agency: Department of Commerce

Start Date: 2024-09-20

End Date: 2026-09-19

Contract Duration: 729 days

Daily Burn Rate: $566/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: WEBSITE AND FINANCIAL WEB APPLICATION SUPPORT

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 $412,710.86 to STRAITSYS INC for work described as: WEBSITE AND FINANCIAL WEB APPLICATION SUPPORT Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The fixed-price contract structure offers some cost certainty but may not incentivize efficiency. 3. Lack of competition is a significant risk indicator for potential overpayment. 4. The contract duration of two years is standard for IT support services. 5. This award represents a small portion of the Department of Commerce's overall IT spending. 6. The specific services are crucial for maintaining the agency's public-facing digital presence.

Value Assessment

Rating: questionable

Without competitive bids, it is difficult to benchmark the value for money. The $4.1 million price tag for two years of website and financial web application support needs further scrutiny against market rates for similar services. The lack of competition suggests potential for inflated pricing, as there was no market pressure to offer the most cost-effective solution. A comparison to similar contracts awarded competitively would be necessary to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it was likely awarded through other limited or sole-source justifications. The absence of a competitive process means there were no multiple bidders vying for the contract. This lack of competition hinders price discovery and may lead to a higher price than if multiple vendors had submitted proposals.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

The primary beneficiaries are the Department of Commerce's Office of the Secretary, ensuring the functionality of its websites and financial applications. Services delivered include ongoing support, maintenance, and potential updates for critical digital platforms. The geographic impact is primarily within the District of Columbia, where the agency is headquartered. Workforce implications are likely minimal for the public sector, with the contractor providing specialized IT support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and value assessment.
Potential for overpayment due to lack of market pressure.
Limited transparency into the justification for sole-source or limited competition.

Positive Signals

Firm fixed-price contract provides cost certainty for the agency.
Contract duration is defined, allowing for predictable budgeting.
Services are essential for maintaining critical agency web infrastructure.

Sector Analysis

The IT services sector, particularly custom computer programming and web support, is a significant area of federal spending. This contract falls under the broader category of IT services, which includes software development, maintenance, and support. The market for such services is competitive, but federal procurement processes, especially non-competitive ones, can obscure true market value. Comparable spending benchmarks for similar website support contracts within federal agencies would typically range widely based on complexity and scope.

Small Business Impact

The contract data indicates that small business participation was not a factor, as the 'sb' field is false. There is no indication of small business set-asides or subcontracting requirements. This means the contract did not actively aim to support the small business ecosystem, and opportunities for small businesses to participate in this specific award are unlikely.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) within the Department of Commerce, responsible for monitoring performance and ensuring compliance. Accountability measures are tied to the firm fixed-price terms, requiring the contractor to deliver specified services. Transparency is limited due to the non-competitive nature of the award; however, contract details should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Commerce IT Support Contracts
Federal Website Maintenance Services
Custom Computer Programming Services
Office of the Secretary IT Procurement

Risk Flags

Non-competitive award
Potential for overpricing
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $412,710.86 to STRAITSYS INC. WEBSITE AND FINANCIAL WEB APPLICATION SUPPORT

Who is the contractor on this award?

The obligated recipient is STRAITSYS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $412,710.86.

What is the period of performance?

Start: 2024-09-20. End: 2026-09-19.

What is the track record of StraitSys Inc. with federal contracts, particularly in providing website and financial web application support?

A review of federal procurement data would be necessary to fully assess StraitSys Inc.'s track record. Without access to a comprehensive database of their past performance, it's difficult to provide specific details. However, agencies typically evaluate a contractor's past performance as part of the procurement process, especially for non-competitive awards, to ensure they have the capability and reliability to perform the required services. If this contract was awarded without a formal competition, the agency likely relied on existing knowledge or limited pre-qualification of StraitSys Inc.'s capabilities. Further investigation into their contract history, including any past issues or successes, would be beneficial for a complete understanding of their suitability for this role.

How does the $4.1 million price compare to similar website support contracts awarded competitively by other federal agencies?

Direct comparison is challenging without knowing the exact scope, complexity, and service level agreements (SLAs) of this contract. However, $4.1 million for two years of support for websites and financial web applications is a substantial amount. Competitively bid contracts for similar services often reveal a wide range of pricing based on factors like the number of applications supported, user base, uptime requirements, and security protocols. If this contract was not competed, it is plausible that the price is higher than what could have been achieved through a competitive process. Benchmarking against publicly available data for comparable, competitively awarded contracts would be essential to determine if this price represents good value for money.

What are the specific risks associated with awarding a contract of this value on a non-competitive basis?

The primary risk of a non-competitive award is the lack of price competition, which can lead to overpayment. Without multiple bids, the government does not benefit from the market forces that drive down prices and encourage efficiency. This can result in the contractor charging more than necessary for the services provided. Additionally, a non-competitive award may limit the agency's access to innovative solutions or specialized expertise that could have been brought by other vendors. There's also a potential perception of favoritism or a lack of due diligence in seeking the best value for taxpayer dollars, even if the award was made in good faith.

What is the expected effectiveness of StraitSys Inc. in delivering the specified website and financial web application support services?

The effectiveness of StraitSys Inc. will depend on their technical capabilities, project management, and adherence to the contract's terms and conditions. As the contract is firm fixed-price, the agency expects a defined set of services to be delivered within the agreed-upon budget. The agency's Office of the Secretary, through its contracting officer's representative (COR), will be responsible for monitoring performance against deliverables and SLAs. While the non-competitive nature raises value concerns, the agency presumably selected StraitSys Inc. based on some assessment of their ability to perform. However, ongoing performance monitoring is crucial to ensure the services are delivered effectively and meet the agency's needs.

What are the historical spending patterns for website and financial web application support within the Department of Commerce?

Analyzing historical spending patterns for website and financial web application support within the Department of Commerce would provide valuable context. This would involve examining previous contracts for similar services, including their duration, value, and whether they were competitively awarded. Understanding the agency's typical investment in this area can help identify trends, potential cost savings, or areas where spending may have increased significantly. For instance, if the agency has consistently awarded similar contracts non-competitively, it might indicate a systemic issue or a specific strategic choice. Conversely, if this is an anomaly, it warrants closer examination of the justification for the current award.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8600 ADVANCED GATEWAY SW, HUNTSVILLE, AL, 35808

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

Financial Breakdown

Contract Ceiling: $1,448,714

Exercised Options: $412,711

Current Obligation: $412,711

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline