DOJ awards $11.5M for Azure cloud services to Minburn Technology Group, a sole-source contract

Contract Overview

Contract Amount: $11,494,325 ($11.5M)

Contractor: Minburn Technology Group, LLC

Awarding Agency: Department of Justice

Start Date: 2023-01-01

End Date: 2026-04-30

Contract Duration: 1,215 days

Daily Burn Rate: $9.5K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: JMD HOSTING WINDOWS AZURE SUBSCRIPTION

Place of Performance

Location: GREAT FALLS, FAIRFAX County, VIRGINIA, 22066

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $11.5 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: JMD HOSTING WINDOWS AZURE SUBSCRIPTION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-price contract type suggests predictable costs, but lacks flexibility for scope changes. 3. The contract duration of over three years indicates a long-term need for these services. 4. The North American Industry Classification System (NAICS) code 541519 suggests a broad range of IT services. 5. The contract is a delivery order under a larger contract vehicle, implying prior vetting. 6. The small business status of the contractor is not specified, impacting set-aside analysis. 7. The contract is for cloud subscription services, a growing area of federal IT spending.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive data. The fixed-price nature provides cost certainty, but the absence of competition may lead to a higher price than if it were competed. The total value of $11.5 million over approximately three years suggests a significant investment in cloud infrastructure. Further analysis would require comparing the per-unit cost of Azure services to government-wide agreements or other agency procurements for similar cloud subscriptions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed openly. This approach is typically used when only one vendor can provide the required service or product. The lack of competition means that the Department of Justice did not benefit from multiple bids, which could have driven down the price through market forces. The justification for sole-source procurement would need to be reviewed to understand the specific circumstances.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to leverage market competition for cost savings.

Public Impact

The Department of Justice benefits from access to Microsoft Azure cloud services, enabling digital operations and data management. Users within the Department of Justice will have access to the necessary cloud infrastructure for their applications and data. The contract supports the ongoing modernization of federal IT infrastructure by utilizing cloud-based solutions. The geographic impact is primarily within the Department of Justice's operational footprint, likely nationwide. The contract supports the IT workforce by providing the tools and platforms necessary for their work.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit innovation by not exploring alternative solutions.
Dependence on a single vendor for critical cloud services poses a potential risk.
The specific performance metrics and service level agreements are not detailed here, making performance assessment difficult.

Positive Signals

The contract is a delivery order under a larger, potentially competed, contract vehicle, suggesting some level of pre-qualification.
Fixed-price contract type provides cost predictability for budgeting purposes.
The contract duration indicates a stable and ongoing need for these services, suggesting a well-defined requirement.
The use of cloud services aligns with modern IT strategies for scalability and efficiency.

Sector Analysis

The federal IT services sector is vast, with significant spending on cloud computing, software, and IT support. This contract falls under the 'Other Computer Related Services' NAICS code, which encompasses a wide array of IT services beyond standard software development or hardware maintenance. The federal government's adoption of cloud services, particularly through platforms like Microsoft Azure and Amazon Web Services, has been a major trend, driven by the desire for scalability, cost-efficiency, and modernization. Comparable spending benchmarks would involve looking at other agencies' procurements for similar Azure subscriptions or IT services under the same NAICS code.

Small Business Impact

The provided data indicates that the small business (SB) flag is false, and the small business set-aside (SS) flag is also false. This suggests that the contract was not specifically set aside for small businesses. Minburn Technology Group, LLC's size status is not explicitly stated, but the lack of set-aside implies it may not be a small business, or if it is, the contract was not awarded under a small business set-aside program. This means that subcontracting opportunities for small businesses are not mandated by this specific award, though they may arise at the contractor's discretion.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's contracting officers and program managers. As a delivery order under a larger contract vehicle, there may be existing oversight mechanisms from the parent contract. Transparency is limited due to the sole-source nature and the lack of detailed performance metrics in the provided data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedules
Cloud Computing Services
IT Professional Services
Department of Justice IT Contracts
Microsoft Azure Government

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for higher costs
Limited transparency on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $11.5 million to MINBURN TECHNOLOGY GROUP, LLC. JMD HOSTING WINDOWS AZURE SUBSCRIPTION

Who is the contractor on this award?

The obligated recipient is MINBURN TECHNOLOGY GROUP, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2023-01-01. End: 2026-04-30.

What is the track record of Minburn Technology Group, LLC with federal contracts, particularly for cloud services?

A review of federal procurement data would be necessary to fully assess Minburn Technology Group, LLC's track record. Specifically, one would look for past performance on similar cloud service contracts, contract values, and any reported performance issues or awards. Without this detailed history, it's difficult to gauge their experience and reliability for this specific $11.5 million Azure subscription. The fact that this is a sole-source award might suggest a specific capability or existing relationship, but a comprehensive review of their contract history is crucial for a complete understanding of their performance context.

How does the pricing of this Azure subscription compare to government-wide agreements or other agency procurements?

Direct comparison of pricing for this sole-source Azure subscription is challenging without access to the specific service tiers, usage volumes, and negotiated rates. However, the government often leverages enterprise-wide agreements (EWAs) or specific cloud purchasing vehicles that offer discounted rates. If this contract is not under such a vehicle, or if Minburn Technology Group, LLC is not leveraging these discounts, the price could be higher than market rates for comparable government cloud services. Benchmarking against similar sole-source awards for Azure services within other agencies, or against publicly available Azure pricing adjusted for government discounts, would provide a more concrete comparison.

What are the specific risks associated with a sole-source award for critical cloud infrastructure?

The primary risk of a sole-source award for critical cloud infrastructure is the lack of competitive pressure, which can lead to inflated costs for taxpayers. It also limits the government's ability to explore alternative solutions or vendors that might offer better value, innovation, or specialized capabilities. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future. Dependence on a single vendor also introduces supply chain risks and potential vulnerabilities if that vendor experiences service disruptions or security breaches. Robust contract management and oversight are crucial to mitigate these risks.

How does this contract contribute to the Department of Justice's overall IT modernization goals?

This contract directly supports the Department of Justice's IT modernization goals by providing access to Microsoft Azure cloud services. Cloud adoption is a key component of modernizing federal IT infrastructure, enabling greater scalability, flexibility, and agility compared to traditional on-premises data centers. By leveraging Azure, the DOJ can potentially improve the performance of its applications, enhance data storage and processing capabilities, and reduce the burden of managing physical hardware. This allows the department to focus resources on its core mission rather than IT infrastructure maintenance, aligning with broader government-wide initiatives for digital transformation.

What is the historical spending pattern for cloud services within the Department of Justice?

Analyzing historical spending patterns for cloud services within the Department of Justice would reveal trends in adoption, vendor preferences, and overall investment in cloud technologies. This specific $11.5 million award for Azure subscriptions represents a significant, multi-year commitment. Understanding past spending on similar services, whether on-premises or cloud-based, and comparing it to current investments provides context for the scale and direction of the DOJ's IT strategy. It would also help identify if there's a shift towards cloud-first procurement or a continued reliance on specific vendors or platforms over time.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not include specific performance metrics or service level agreements (SLAs) for this contract. These are critical components that define the expected level of service, uptime, response times, and other performance standards for the Azure subscription. Without this information, it is difficult to objectively assess whether Minburn Technology Group, LLC is meeting the government's requirements and to hold them accountable for service delivery. A thorough review of the contract documentation would be needed to identify these SLAs and the mechanisms for monitoring and enforcing them.

Industry Classification

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

Product/Service Code: IT AND TELECOM - SECURITY AND COMPLIANCE

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: 10113 MINBURN ST, GREAT FALLS, VA, 22066

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

Financial Breakdown

Contract Ceiling: $13,704,345

Exercised Options: $13,704,345

Current Obligation: $11,494,325

Actual Outlays: $12,521,436

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 15JPSS20G00000304

IDV Type: BOA

Timeline