Labor awards $40.5M task order for Cisco security system to American Systems Corp

Contract Overview

Contract Amount: $40,455,781 ($40.5M)

Contractor: American Systems Corporation

Awarding Agency: Department of Labor

Start Date: 2019-06-28

End Date: 2021-09-27

Contract Duration: 822 days

Daily Burn Rate: $49.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TASK ORDER CONTRACT FOR JOBCORP CISCO SECURITY SYSTEM

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78741

State: Texas Government Spending

Plain-Language Summary

Department of Labor obligated $40.5 million to AMERICAN SYSTEMS CORPORATION for work described as: TASK ORDER CONTRACT FOR JOBCORP CISCO SECURITY SYSTEM Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 822 days indicates a medium-term need for the security system. 3. Fixed-price contract type may offer cost certainty for the government. 4. The North American Industry Classification System (NAICS) code 517110 points to telecommunications infrastructure services. 5. The award was a delivery order under a larger contract vehicle. 6. The contract was awarded to a single vendor, American Systems Corporation.

Value Assessment

Rating: fair

The total award amount of $40.5 million for a Cisco security system over approximately two years appears to be within a reasonable range for such specialized IT infrastructure. Benchmarking against similar large-scale security system deployments for federal agencies would provide a clearer picture of value for money. Without specific details on the scope of services and equipment, a precise comparison is difficult, but the price point suggests a significant undertaking.

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 data does not specify the number of bids received, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The use of full and open competition is a positive indicator for price discovery.

Taxpayer Impact: Full and open competition is the most taxpayer-friendly approach, as it maximizes the pool of potential bidders and encourages competitive pricing, potentially leading to cost savings.

Public Impact

The Department of Labor benefits from enhanced cybersecurity through the Cisco security system. Employees and sensitive data within the Department of Labor are better protected. The contract supports the operational continuity and security posture of the agency. The delivery order likely involves the installation, maintenance, and support of network security hardware and software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders received under full and open competition limits the assessment of competitive intensity.
The fixed-price nature of the contract could lead to cost overruns if unforeseen issues arise during implementation or maintenance.
The reliance on a single vendor for this critical security system raises potential concerns about vendor lock-in and future flexibility.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
The fixed-price contract type provides budget predictability for the government.
The contract is for a critical cybersecurity system, addressing a key government need.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on cybersecurity and telecommunications infrastructure. The market for enterprise security solutions is highly competitive, with numerous vendors offering a range of hardware, software, and managed services. Federal spending in this area is substantial, driven by the increasing need to protect sensitive data and critical infrastructure from evolving cyber threats. Comparable spending benchmarks would involve looking at other large federal contracts for network security systems and managed IT services.

Small Business Impact

The provided data indicates that small business participation (sb) was not a specific set-aside for this contract (sb: false). There is no information on subcontracting plans. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless American Systems Corporation engages small businesses as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. The Office of Inspector General (OIG) may also conduct audits or investigations related to contract performance and spending. Transparency is generally facilitated through contract award databases like FPDS, where basic award information is publicly available.

Related Government Programs

Department of Labor IT Modernization Efforts
Federal Cybersecurity Initiatives
Cisco Systems Contracts
Network Security Services
Telecommunications Infrastructure

Risk Flags

Potential for vendor lock-in due to reliance on specific technology.
Risk of cost overruns or scope reduction in fixed-price contracts for complex IT projects.
Need for detailed performance data to fully assess value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $40.5 million to AMERICAN SYSTEMS CORPORATION. TASK ORDER CONTRACT FOR JOBCORP CISCO SECURITY SYSTEM

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

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 $40.5 million.

What is the period of performance?

Start: 2019-06-28. End: 2021-09-27.

What specific Cisco security products and services are included in this $40.5 million task order?

The provided data does not specify the exact Cisco security products or services covered under this $40.5 million task order. It broadly falls under NAICS code 517110 (Wired Telecommunications Carriers), suggesting a focus on network infrastructure and security. Typically, such contracts could encompass firewalls, intrusion detection/prevention systems, VPNs, network access control, security software licenses, and associated installation, configuration, maintenance, and support services. A detailed statement of work (SOW) or contract line item numbers (CLINs) would be required to identify the precise components and their allocated costs.

How does the $40.5 million award compare to historical spending on similar security systems by the Department of Labor or other federal agencies?

Comparing the $40.5 million award requires context on the scope and duration. For a two-year period (June 2019 - September 2021), this represents an average annual spend of approximately $20.25 million. This figure is substantial and aligns with large-scale IT infrastructure and cybersecurity procurements for federal agencies. For instance, other agencies might award similar or larger sums for enterprise-wide security solutions, network upgrades, or managed security services. Without specific details on the system's capabilities (e.g., number of users supported, specific threat mitigation technologies), a direct benchmark is challenging, but it is indicative of a significant investment in critical infrastructure protection.

What is the track record of American Systems Corporation in delivering large-scale IT and security contracts for the federal government?

American Systems Corporation has a history of performing federal contracts, including those related to IT services and potentially security systems. Their ability to win a $40.5 million task order under full and open competition suggests they met the technical and financial qualifications required by the Department of Labor. A deeper analysis would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past issues or disputes on similar contracts, and their overall portfolio of government work. Their success in securing this award indicates a level of demonstrated capability, but a comprehensive assessment requires examining specific performance metrics from prior engagements.

What are the potential risks associated with a fixed-price contract for a complex security system implementation?

Fixed-price contracts, while offering cost certainty, carry risks for both the government and the contractor when dealing with complex IT projects like security systems. For the government, the primary risk is that the contractor may cut corners on quality or scope to maintain profitability if costs escalate unexpectedly, potentially leading to a less effective or secure system. Conversely, if the contractor underestimated the complexity or costs, they might seek change orders, driving up the price, or face financial distress. For American Systems Corporation, unforeseen technical challenges, integration issues with existing infrastructure, or scope creep could lead to cost overruns, impacting their profit margin or even resulting in a loss. Robust contract management and clear SOW are crucial to mitigate these risks.

How does the selection of Cisco technology impact the Department of Labor's broader IT strategy and potential vendor diversification?

The selection of Cisco technology for this security system task order implies a strategic alignment with Cisco's product ecosystem. This can offer benefits such as interoperability, unified management, and potentially leverage existing enterprise agreements or expertise within the Department of Labor. However, it also raises questions about vendor diversification. Over-reliance on a single technology vendor, even a major one like Cisco, can lead to vendor lock-in, potentially limiting future flexibility, increasing long-term costs through proprietary solutions, and reducing bargaining power. Agencies often aim for a balance between leveraging established ecosystems and maintaining options through multi-vendor strategies or open standards to mitigate these risks.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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

Solicitation ID: 1605DC-19-Q-00166

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,455,781

Exercised Options: $40,455,781

Current Obligation: $40,455,781

Actual Outlays: $8,285,998

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $93,380,880

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q12NSD0002

IDV Type: IDC

Timeline