Interior Department's $31.2M IT contract with Guidehouse Digital LLC shows strong competition and long-term performance

Contract Overview

Contract Amount: $31,244,226 ($31.2M)

Contractor: Guidehouse Digital LLC

Awarding Agency: Department of the Interior

Start Date: 2020-09-13

End Date: 2026-03-12

Contract Duration: 2,006 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: ENTERPRISE VOCABULARY SERVICES

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of the Interior obligated $31.2 million to GUIDEHOUSE DIGITAL LLC for work described as: ENTERPRISE VOCABULARY SERVICES Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Long contract duration (over 6 years) suggests a need for sustained IT services. 3. Time and Materials pricing model can pose cost control challenges if not managed diligently. 4. The contract falls under Computer Systems Design Services, a critical area for federal IT infrastructure. 5. Performance is based in Maryland, a hub for federal contracting activity. 6. No small business set-aside was utilized, suggesting the primary contractor was selected based on capability.

Value Assessment

Rating: good

The total award amount of $31.2 million over approximately six years for Computer Systems Design Services appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal agencies suggests this falls within expected ranges for comprehensive support. The Time and Materials (T&M) pricing structure, while common, requires careful monitoring to ensure value for money and prevent cost overruns. Without specific details on labor categories and hours, a precise per-unit cost comparison is difficult, but the overall value proposition seems sound if performance objectives are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, and multiple responsible sources were permitted to submit offers. The fact that it was competed openly suggests that the agency sought the best possible solution and price from the market. The number of bidders is not specified, but the open competition mechanism generally fosters price discovery and encourages competitive pricing among potential offerors.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it increases the likelihood of receiving services at a fair market price. Open competition helps prevent inflated costs that might arise from sole-source or limited-source procurements.

Public Impact

Federal agencies, specifically the Department of the Interior, benefit from enhanced IT capabilities and system design services. The contract supports the delivery of essential computer systems design and integration services. The geographic impact is primarily centered in Maryland, where the contractor is located and services are likely performed. The contract supports a workforce skilled in IT systems design and implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure carries inherent risk of cost escalation if not closely managed and monitored against defined scope and labor rates.
The long contract duration (over 6 years) could lead to vendor lock-in or reduced flexibility if requirements change significantly over time.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process that likely yielded a fair price.
The contract is for a critical IT service category (Computer Systems Design), indicating a strategic investment in agency infrastructure.
The contractor, Guidehouse Digital LLC, is likely selected based on demonstrated capabilities and past performance in similar IT service delivery.

Sector Analysis

The federal IT services sector is a vast and critical component of government operations, encompassing a wide range of needs from software development to cybersecurity and systems integration. Computer Systems Design Services, the category for this contract, represents a significant portion of this spending. The market is characterized by a mix of large prime contractors and specialized small businesses. Spending in this area is driven by the need to modernize legacy systems, implement new technologies, and ensure the efficient functioning of agency operations. Comparable spending benchmarks for large IT service contracts can range from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The primary award went to Guidehouse Digital LLC, a presumably larger entity. This suggests that the competition was likely focused on overall capability and best value rather than specifically targeting small business participation. While there is no direct set-aside, the prime contractor may still engage small businesses as subcontractors to fulfill portions of the contract, contributing to the broader small business ecosystem. However, the absence of a set-aside means direct opportunities for small businesses as prime contractors on this specific award are limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Interior's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The contract's long duration and T&M nature necessitate robust oversight to control costs and ensure deliverables meet requirements. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Department of Defense IT Modernization Programs
Agency-specific Enterprise Resource Planning (ERP) Systems
Cloud Computing Services Contracts
Cybersecurity Services Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of reduced flexibility with long contract duration.
Need for robust oversight to ensure value for money.
Dependence on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $31.2 million to GUIDEHOUSE DIGITAL LLC. ENTERPRISE VOCABULARY SERVICES

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE DIGITAL LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $31.2 million.

What is the period of performance?

Start: 2020-09-13. End: 2026-03-12.

What is Guidehouse Digital LLC's track record with the federal government, particularly in Computer Systems Design Services?

Guidehouse Digital LLC, and its predecessor entities, have a significant history of federal contracting. While specific performance details for this particular contract are not publicly detailed beyond award status, the company has been awarded numerous contracts across various agencies for IT services, consulting, and digital transformation. Their experience often spans complex system integrations, modernization efforts, and data analytics. A review of federal procurement data would reveal the breadth of their contract portfolio, including past performance ratings on similar large-scale IT service delivery contracts. Positive past performance is a key factor in winning competitive, large-value awards like this one.

How does the $31.2 million total award value compare to similar IT system design contracts within the Department of the Interior or other federal agencies?

The $31.2 million total award value for this six-year contract for Computer Systems Design Services is substantial but falls within the typical range for large, long-term IT support contracts awarded by federal agencies. The Department of the Interior, like other large departments, often procures complex IT solutions that require significant investment over extended periods. Benchmarking against similar contracts for system design, integration, and modernization across agencies like HHS, DOD, or DHS reveals that contracts of this magnitude are common for enterprise-level IT support. Factors influencing the value include the scope of services, the number of users supported, the complexity of the systems involved, and the duration of the contract. This award appears consistent with the agency's need for sustained IT expertise.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with a Time and Materials (T&M) pricing structure is the potential for cost overruns if not managed diligently. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual labor hours and materials used. This can lead to higher costs than anticipated if project scope creeps, inefficiencies arise, or labor rates are not carefully controlled and negotiated. For the government, effective oversight is crucial to ensure that the hours billed are reasonable and directly related to the work performed. Without strong project management and monitoring, T&M contracts can become more expensive than initially projected, impacting the overall value for money.

How does the duration of this contract (over 6 years) impact its effectiveness and the agency's flexibility?

The extended duration of this contract, spanning over six years, suggests a strategic commitment by the Department of the Interior to ensure continuity and long-term support for critical IT systems. This longevity can foster deeper expertise and a stronger working relationship between the agency and Guidehouse Digital LLC, potentially leading to more efficient service delivery over time. However, a long contract duration also presents risks. Technology evolves rapidly, and agency requirements can change. A lengthy commitment might reduce the agency's flexibility to adapt to new technological advancements or pivot its IT strategy if needed. It also increases the potential for vendor lock-in, making it harder to switch providers if performance issues arise or better solutions become available.

What does the 'Computer Systems Design Services' classification imply about the nature of the work performed under this contract?

The 'Computer Systems Design Services' (NAICS code 541512) classification indicates that the contract primarily involves providing expertise in designing, developing, integrating, and implementing computer systems. This can encompass a wide range of activities, including analyzing user needs, designing system architecture, developing software components, integrating hardware and software, testing systems, and providing technical support for system implementation. It suggests the work goes beyond simple IT support or maintenance, focusing on the strategic planning and creation of new or significantly improved IT infrastructure and solutions tailored to the Department of the Interior's specific operational requirements.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 140D0420R0032

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1676 INTERNATIONAL DRIVE, MCLEAN, VA, 22102

Business Categories: 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: $31,337,094

Exercised Options: $31,337,094

Current Obligation: $31,244,226

Actual Outlays: $30,402,582

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201300006W

IDV Type: GWAC

Timeline