Maximus Federal Services awarded $25.3M for DOL IT support, facing scrutiny over value and competition

Contract Overview

Contract Amount: $25,261,524 ($25.3M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Labor

Start Date: 2019-06-01

End Date: 2020-03-31

Contract Duration: 304 days

Daily Burn Rate: $83.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CONSOLIDATED IT OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR DOL'S GSS IAW THE PERFORMANCE WORK STATEMENT (PWS)(SECTION C).

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20210

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $25.3 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: CONSOLIDATED IT OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR DOL'S GSS IAW THE PERFORMANCE WORK STATEMENT (PWS)(SECTION C). Key points: 1. The contract's value of $25.3 million for IT operations and maintenance over 10 months raises questions about cost-effectiveness. 2. A single award for this significant IT support contract suggests potential limitations in competitive bidding. 3. The 'Time and Materials' contract type can present risks for cost overruns if not closely managed. 4. Performance context is limited, with the contract duration being relatively short (10 months). 5. This contract falls within the Computer Systems Design Services sector, a critical area for government operations. 6. The contract was awarded to Maximus Federal Services, Inc., a known entity in government contracting.

Value Assessment

Rating: fair

The contract value of $25.3 million for approximately 10 months of IT operations and maintenance appears high, especially considering the 'Time and Materials' pricing structure which can lead to increased costs if not meticulously managed. Benchmarking against similar IT support contracts for federal agencies of comparable size and scope is necessary to definitively assess value for money. Without more detailed performance metrics or cost breakdowns, it is difficult to ascertain if this represents a competitive price point or optimal resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. However, the data shows only one bid was received, which is a concern. A single bid can limit price discovery and potentially indicate a lack of market interest or barriers to entry for other potential contractors. This situation warrants further investigation into the solicitation process and market conditions to understand why more competition was not generated.

Taxpayer Impact: A single bid in a full and open competition means taxpayers may not have benefited from the cost savings typically achieved through robust bidding processes. This could translate to a higher price paid for the services than might have been secured with multiple competitive offers.

Public Impact

The Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM) is the primary beneficiary, receiving essential IT operations and maintenance support. This contract ensures the continuity of critical IT infrastructure and services necessary for the DOL's administrative functions. The services are geographically focused within the District of Columbia, impacting the local IT support ecosystem. The contract supports the workforce employed by Maximus Federal Services, Inc., contributing to employment in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to 'Time and Materials' contract type.
Limited competition with only one bid received despite 'Full and Open' solicitation.
Lack of detailed performance metrics makes value assessment challenging.
Short contract duration (10 months) may limit long-term strategic IT planning.

Positive Signals

Awarded under 'Full and Open Competition' framework.
Contractor, Maximus Federal Services, Inc., is an established government contractor.
Services are critical for the operational continuity of the Department of Labor.

Sector Analysis

This contract falls under the Computer Systems Design Services (NAICS 541512) sector, which is a significant segment of federal IT spending. The market for IT operations and maintenance support is highly competitive, with numerous large and small businesses vying for these contracts. Government spending in this area is substantial, driven by the need to maintain aging infrastructure and adopt new technologies. Comparable contracts often involve multi-year durations and significant dollar values, reflecting the complexity and criticality of IT systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Maximus Federal Services, Inc., is a large business, and any subcontracting opportunities would be at their discretion, not mandated by a set-aside provision. This means the direct economic benefit to the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Labor's contracting officers and the Office of the Assistant Secretary for Administration and Management (OASAM). Accountability measures are typically embedded within the contract's Performance Work Statement (PWS), outlining deliverables and performance standards. Transparency is facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Operations and Maintenance Support Services
Computer Systems Design Services
Department of Labor IT Contracts
Federal IT Services

Risk Flags

Limited competition despite full and open solicitation.
Potential for cost overruns with Time and Materials contract type.
High contract value for a relatively short duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $25.3 million to MAXIMUS FEDERAL SERVICES, INC.. CONSOLIDATED IT OPERATIONS AND MAINTENANCE SUPPORT SERVICES FOR DOL'S GSS IAW THE PERFORMANCE WORK STATEMENT (PWS)(SECTION C).

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $25.3 million.

What is the period of performance?

Start: 2019-06-01. End: 2020-03-31.

What is the track record of Maximus Federal Services, Inc. in delivering IT operations and maintenance support to federal agencies?

Maximus Federal Services, Inc. has a significant history of contracting with the federal government, including providing IT services. They are a large, established contractor known for work across various civilian agencies. Their experience often includes large-scale IT modernization, system integration, and ongoing operations and maintenance. While specific performance details for this particular DOL contract are not detailed here, their general track record suggests they possess the capacity and experience to handle complex IT support requirements. However, as with any large contractor, past performance reviews and specific contract outcomes should be examined on a case-by-case basis to ensure alignment with current needs and expectations.

How does the awarded amount of $25.3 million compare to similar IT support contracts for federal agencies?

The awarded amount of $25.3 million for approximately 10 months of IT operations and maintenance is substantial. Federal IT support contracts can vary widely in cost depending on scope, duration, and complexity. For a 10-month period, this figure suggests a significant level of service or a high-cost environment. To provide a precise comparison, one would need to benchmark against contracts for agencies of similar size and mission, focusing on IT support functions like network management, help desk, system administration, and cybersecurity. Without such direct comparisons, it's difficult to definitively state if this represents a high or low cost, but it is certainly within the range of significant federal IT investments.

What are the primary risks associated with the 'Time and Materials' contract type used for this award?

The 'Time and Materials' (T&M) contract type carries inherent risks, primarily related to cost control. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. The primary risk for the government is the potential for cost overruns if the scope of work is not well-defined or if the contractor's labor hours or material costs are higher than anticipated. This necessitates robust oversight from the government to monitor labor hours, ensure efficiency, and validate material costs. Without stringent management and clear performance metrics, T&M contracts can become more expensive than initially projected, impacting the overall value for money.

What does the fact that only one bid was received under 'Full and Open Competition' imply for the Department of Labor?

Receiving only one bid under a 'Full and Open Competition' solicitation is a significant indicator that warrants attention. It suggests potential issues with the solicitation itself, the market's response, or the perceived attractiveness of the contract. Possible reasons include overly restrictive requirements, insufficient outreach to potential bidders, a lack of qualified contractors in the market, or that the contract's terms and conditions were not appealing. For the Department of Labor, this means they may not have achieved the best possible price or solution due to the limited competition. It also raises questions about whether the competition truly reflected the market's capabilities and pricing, potentially leading to a less optimal outcome for taxpayers.

How does this contract fit into the broader landscape of federal IT spending for operations and maintenance?

This contract represents a component of the vast federal spending on IT operations and maintenance (O&M). Federal agencies collectively spend billions annually on O&M to keep existing systems running, manage networks, provide user support, and ensure cybersecurity. Contracts like this are essential for maintaining the day-to-day functionality of government IT infrastructure. The trend in federal IT spending is often towards modernizing legacy systems while also managing current operations, making O&M contracts a consistent and critical part of agency budgets. This specific award to DOL for IT support is indicative of the ongoing need for such services across all federal departments.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Inc

Address: 3120 FAIRVIEW PARK DR STE 400, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $26,143,523

Exercised Options: $26,143,523

Current Obligation: $25,261,524

Actual Outlays: $24,915,949

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201600006W

IDV Type: GWAC

Timeline