Commerce's $31.5M Cybersecurity Contract Awarded to XOR Security LLC for USPTO Operations

Contract Overview

Contract Amount: $31,535,397 ($31.5M)

Contractor: XOR Security LLC

Awarding Agency: Department of Commerce

Start Date: 2022-05-09

End Date: 2026-05-08

Contract Duration: 1,460 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FY22 CYBERSECURITY OPERATIONS CONTRACT SUPPORT SERVICES

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $31.5 million to XOR SECURITY LLC for work described as: FY22 CYBERSECURITY OPERATIONS CONTRACT SUPPORT SERVICES Key points: 1. Contract aims to bolster cybersecurity operations for the U.S. Patent and Trademark Office. 2. XOR Security LLC, the awardee, will provide essential IT management services. 3. The contract duration spans four years, indicating a long-term need for these services. 4. Pricing structure is Firm Fixed Price, offering cost predictability. 5. Competition was full and open, suggesting a potentially competitive bidding process. 6. The contract value is substantial, reflecting the critical nature of cybersecurity for intellectual property protection.

Value Assessment

Rating: good

The contract value of approximately $31.5 million over four years for cybersecurity operations support appears reasonable given the critical nature of protecting intellectual property for the USPTO. Benchmarking against similar IT management and cybersecurity support contracts within federal agencies suggests this pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor.

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 bids. The presence of 3 bids suggests a moderate level of competition for this requirement. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price discovery and selection of a qualified vendor.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, potentially leading to a more cost-effective outcome and ensuring the government receives high-quality services.

Public Impact

The primary beneficiaries are the U.S. Patent and Trademark Office, which will receive enhanced cybersecurity protection for its sensitive data and systems. The services delivered will include computer facilities management, crucial for maintaining the operational integrity of USPTO's IT infrastructure. The geographic impact is centered around the USPTO's operations, primarily supporting its mission nationwide. Workforce implications may include the direct employment of cybersecurity professionals by XOR Security LLC and potential indirect benefits to USPTO IT staff through improved system stability and security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical cybersecurity functions could pose a risk if performance degrades.
Ensuring continuous alignment with evolving cybersecurity threats and best practices will be crucial.

Positive Signals

Award to a single vendor under full and open competition suggests a competitive process that likely yielded a strong technical and price proposal.
The firm fixed-price contract type provides budget certainty for the agency.
The four-year duration allows for stability and continuity in cybersecurity operations.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on cybersecurity operations and computer facilities management. The federal IT services market is substantial, with significant spending allocated annually to protect government networks and data. This contract represents a portion of the Department of Commerce's investment in safeguarding critical infrastructure and intellectual property, aligning with government-wide priorities to enhance cybersecurity resilience.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary awardee, XOR Security LLC, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data snippet. The absence of a small business set-aside means that opportunities for small businesses would primarily arise if XOR Security LLC voluntarily engages them as subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Patent and Trademark Office's contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Federal Cybersecurity Modernization Programs
IT Infrastructure Modernization Contracts
Department of Commerce IT Services
USPTO Technology Modernization Initiatives

Risk Flags

Potential for performance issues
Cybersecurity breach risk
Contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $31.5 million to XOR SECURITY LLC. FY22 CYBERSECURITY OPERATIONS CONTRACT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is XOR SECURITY LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $31.5 million.

What is the period of performance?

Start: 2022-05-09. End: 2026-05-08.

What is XOR Security LLC's track record with federal cybersecurity contracts?

Detailed information on XOR Security LLC's specific track record with federal cybersecurity contracts is not provided in the given data snippet. To assess their track record, one would typically review past performance evaluations (e.g., CPARS reports), previous contract awards, and any history of contract modifications, disputes, or terminations. A thorough review would involve searching federal procurement databases like SAM.gov and FPDS for their award history and performance data. Without this external data, it's difficult to definitively gauge their experience and reliability in delivering similar cybersecurity services to federal agencies.

How does the per-unit cost of this contract compare to similar cybersecurity operations support services?

The provided data does not include specific per-unit cost breakdowns (e.g., cost per hour, cost per managed device, cost per security incident response). Therefore, a direct per-unit cost comparison to similar cybersecurity operations support services is not possible with the given information. To perform such a benchmark, one would need access to detailed pricing structures from this contract and comparable contracts, including labor categories, rates, and quantities of services delivered. Benchmarking would involve analyzing factors like the complexity of the environment, the scope of services, and the specific technologies employed.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential performance deficiencies by the contractor, cybersecurity breaches despite the contract's purpose, and the risk of vendor lock-in due to specialized services. Mitigation strategies typically involve robust performance monitoring by the USPTO, clearly defined service level agreements (SLAs) within the contract, and contingency planning for potential security incidents. The firm fixed-price nature shifts some financial risk to the contractor. Ensuring clear contract terms and exercising strong government oversight are crucial for managing these risks effectively.

How effective is the current cybersecurity posture of the USPTO, and how will this contract contribute to its improvement?

The effectiveness of the USPTO's current cybersecurity posture is not detailed in the provided data. This contract is intended to provide 'Cybersecurity Operations Contract Support Services,' implying it aims to enhance or maintain the existing posture by providing necessary expertise and resources. The contract's success in improving the posture will depend on the quality of services delivered by XOR Security LLC, the alignment of those services with the USPTO's specific security needs and threat landscape, and the effectiveness of the USPTO's own internal security management and oversight.

What is the historical spending trend for cybersecurity operations support services at the USPTO or the Department of Commerce?

The provided data snippet focuses on a single contract award and does not offer historical spending trends for cybersecurity operations support services at the USPTO or the Department of Commerce. To analyze historical spending, one would need to examine procurement data over multiple fiscal years, identifying all contracts related to cybersecurity operations support. This would involve looking at contract values, durations, and the types of services procured to identify patterns, increases, or decreases in spending within this category.

What is the significance of the contract type (FIRM FIXED PRICE) for managing costs and risks?

A Firm Fixed Price (FFP) contract type is significant because it establishes a ceiling price that the contractor must not exceed. The contractor assumes the primary risk for cost overruns, which incentivizes them to manage their resources efficiently and control expenses. For the government, FFP provides the highest degree of cost certainty, making budgeting more predictable. However, it can sometimes lead to higher initial prices compared to cost-reimbursement contracts, as contractors may build in a contingency for unforeseen costs. It is best suited for requirements with well-defined scopes of work where cost and performance risks are manageable.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1430 SPRING HILL RD STE 200, MCLEAN, VA, 22102

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,376,957

Exercised Options: $31,535,397

Current Obligation: $31,535,397

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $760,665

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F525GA

IDV Type: FSS

Timeline