DOJ awards $13.7M for data center software, with 4 bidders competing for a firm-fixed-price contract

Contract Overview

Contract Amount: $13,720,236 ($13.7M)

Contractor: 3chief LLC

Awarding Agency: Department of Justice

Start Date: 2023-10-01

End Date: 2026-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PSS - DATA CENTER SOFTWARE LICENSES/MAINTENANCE

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20175

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $13.7 million to 3CHIEF LLC for work described as: PSS - DATA CENTER SOFTWARE LICENSES/MAINTENANCE Key points: 1. The contract value of $13.7 million for data center software licenses and maintenance appears reasonable given the duration and scope. 2. Full and open competition after exclusion of sources suggests a deliberate effort to ensure fair pricing and access. 3. The presence of 4 bidders indicates a healthy level of market interest and potential for competitive pricing. 4. The firm-fixed-price contract type shifts performance risk to the contractor, potentially stabilizing costs for the government. 5. This award falls within the 'Other Computer Related Services' NAICS code, a common category for IT support contracts. 6. The contract duration of 1095 days (3 years) aligns with typical software maintenance and licensing cycles.

Value Assessment

Rating: good

The contract value of $13.7 million for data center software licenses and maintenance over three years is benchmarked against similar IT service contracts. While specific per-unit cost data is not provided, the total award amount suggests a moderate investment for the services rendered. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value. Further analysis would require comparing the specific software and maintenance levels to market rates.

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 while initial solicitations may have had limitations, the final award was made after a broad competitive process. Four bidders participated, suggesting a reasonable level of competition for this specific requirement. This level of competition generally supports price discovery and encourages contractors to offer competitive terms.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition scenario. The presence of multiple bidders helps ensure that government funds are used efficiently.

Public Impact

The Department of Justice (DOJ) benefits from this contract by securing essential data center software licenses and maintenance. This ensures the continued operation and support of critical IT infrastructure necessary for DOJ's mission. The services delivered are primarily IT-focused, supporting the internal operations of the agency. The geographic impact is concentrated within the agency's operational locations, primarily in Virginia where the awardee is located. Workforce implications are indirect, supporting the IT professionals who manage and utilize the data center infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific proprietary software is heavily reliant on this vendor's maintenance.
Risk of cost escalation in future contract renewals if market competition diminishes.
Dependence on the contractor's ability to provide timely and effective support for critical data center functions.

Positive Signals

Firm-fixed-price contract provides cost certainty and shifts performance risk to the contractor.
Multiple bidders (4) indicate a competitive market and potential for good pricing.
Awardee's location in Virginia may facilitate easier communication and support for East Coast-based DOJ operations.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on data center software and maintenance. The market for such services is substantial, driven by the increasing reliance of government agencies on robust and secure IT infrastructure. Comparable spending benchmarks for data center software and maintenance vary widely based on the scale and complexity of the infrastructure, but this $13.7 million award over three years represents a significant, yet not extraordinary, investment for a federal agency like the DOJ.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on the small business ecosystem would be through potential subcontracting opportunities, which are not detailed in this award notice. Without specific subcontracting plans or goals, it's difficult to assess the direct benefit to small businesses from this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's internal contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified software licenses and maintenance. Transparency is facilitated by the public nature of federal contract awards, allowing for review. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Data Center Operations Support
Software Licensing and Maintenance
IT Infrastructure Services
Cloud Computing Services (if applicable)
Cybersecurity Software

Risk Flags

Potential for limited competition due to 'exclusion of sources' clause.
Lack of specific performance metrics (SLAs/KPIs) in summary data.
Unknown track record of the contractor (3CHIEF LLC) for this specific service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $13.7 million to 3CHIEF LLC. PSS - DATA CENTER SOFTWARE LICENSES/MAINTENANCE

Who is the contractor on this award?

The obligated recipient is 3CHIEF 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 $13.7 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-09-30.

What is the specific type of data center software being licensed and maintained under this contract?

The provided data does not specify the exact type of data center software. However, given the context of 'Data Center Software Licenses/Maintenance' and the NAICS code '541519 - Other Computer Related Services,' it likely pertains to operating systems, virtualization software, storage management software, network management software, or other essential components that enable the functioning and maintenance of the Department of Justice's data centers. Further details would typically be found in the contract's statement of work or performance work statement, which are not included in the abbreviated data.

How does the $13.7 million contract value compare to historical DOJ spending on similar data center software and maintenance?

Without historical spending data specific to DOJ's data center software and maintenance for comparable periods or systems, a direct comparison is not possible. However, $13.7 million over three years averages to approximately $4.57 million annually. This figure should be benchmarked against industry averages for data center software and maintenance costs relative to the size and complexity of the DOJ's IT infrastructure. Factors such as the number of servers, users, data volume, and criticality of the systems would influence this comparison. The firm-fixed-price nature suggests a defined scope, making it less prone to cost overruns than cost-plus contracts.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for data center software maintenance, SLAs would focus on aspects like software uptime, response times for technical support, patch deployment timelines, and resolution times for reported issues. The effectiveness of the contractor's performance would be measured against these agreed-upon metrics, which are usually outlined in the contract's Performance Work Statement (PWS) or Statement of Work (SOW). Failure to meet these SLAs could result in penalties or remedies for the government.

What is the track record of 3CHIEF LLC in providing data center software and maintenance services to federal agencies?

The provided data identifies 3CHIEF LLC as the contractor but does not offer details on their specific track record or past performance in providing data center software and maintenance services to federal agencies. A comprehensive assessment of their capabilities would require reviewing past performance evaluations, contract history, and any available CPARS (Contractor Performance Assessment Reporting System) data. This information would help determine their reliability, technical expertise, and ability to meet contractual obligations effectively.

What is the potential risk associated with the 'full and open competition after exclusion of sources' award type?

The 'full and open competition after exclusion of sources' award type suggests that while the initial solicitation might have had specific criteria that excluded some potential offerors, the final award was made through a broad competitive process among those who remained eligible. The primary risk is that the initial exclusion criteria might have inadvertently limited the pool of potential bidders, potentially reducing overall competition and possibly leading to a less optimal price or solution than if truly all sources were considered from the outset. However, if the exclusion was justified and the subsequent competition was robust (as indicated by 4 bidders), the risk is mitigated.

Industry Classification

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

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 215 DEPOT CT SE STE 247, LEESBURG, VA, 20175

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,200,505

Exercised Options: $13,720,236

Current Obligation: $13,720,236

Actual Outlays: $13,741,669

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD25B

IDV Type: GWAC

Timeline