Department of Labor awards $37.7M for AWS Cloud Hosting, with competition after source exclusion

Contract Overview

Contract Amount: $37,673,265 ($37.7M)

Contractor: Four Points Technology, L.L.C.

Awarding Agency: Department of Labor

Start Date: 2022-08-19

End Date: 2026-08-19

Contract Duration: 1,461 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AMAZON WEB SERVICES (AWS) CLOUD HOSTING SERVICE

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 $37.7 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: AMAZON WEB SERVICES (AWS) CLOUD HOSTING SERVICE Key points: 1. The contract is for AWS cloud hosting services, a critical infrastructure component. 2. Competition was conducted after exclusion of sources, raising questions about market reach. 3. The contract value is substantial, requiring careful monitoring of performance and cost. 4. The IT sector is highly dynamic, with rapid technological advancements impacting service needs.

Value Assessment

Rating: fair

The contract value of $37.7M over 4 years for cloud hosting is significant. Benchmarking against similar large-scale cloud service contracts is necessary to assess if the pricing is competitive, especially given the specific nature of AWS services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This method suggests that while competition was sought, certain potential bidders were excluded, which could impact price discovery and overall market fairness.

Taxpayer Impact: The use of a limited competition strategy may result in higher costs for taxpayers compared to a fully open and unrestricted bidding process.

Public Impact

Ensures continued access to essential cloud infrastructure for the Department of Labor. Potential for increased costs due to limited competition could impact taxpayer funds. The reliance on a single cloud provider (AWS) raises concerns about vendor lock-in and future flexibility. Data security and privacy within the cloud environment are paramount for government operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises cost concerns.
Potential vendor lock-in.
Reliance on a specific cloud provider.

Positive Signals

Secures critical cloud hosting services.
Long-term contract provides stability.

Sector Analysis

This contract falls within the Information Technology sector, specifically cloud computing services. Spending benchmarks for cloud hosting vary widely based on service level agreements, data storage, and processing needs, but large government contracts often represent significant investments.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as 'sb' is false. Analysis should focus on whether opportunities were made available to small businesses through subcontracting or if the nature of the requirement precluded their participation.

Oversight & Accountability

Oversight will be crucial to ensure the Department of Labor receives the contracted AWS services at a fair price and that performance meets all security and operational requirements. Monitoring adherence to the terms of the limited competition is also key.

Related Government Programs

Other Computer Related Services
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Limited competition may lead to higher costs.
Potential for vendor lock-in.
Reliance on a single cloud provider.
Need for robust security and compliance oversight.
Complexity of managing cloud service contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $37.7 million to FOUR POINTS TECHNOLOGY, L.L.C.. AMAZON WEB SERVICES (AWS) CLOUD HOSTING SERVICE

Who is the contractor on this award?

The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..

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 $37.7 million.

What is the period of performance?

Start: 2022-08-19. End: 2026-08-19.

What was the justification for excluding sources in this 'full and open competition after exclusion of sources' award, and how did it impact the final price?

The justification for excluding sources is critical. If based on specific technical requirements or prior performance, it might be valid. However, if the exclusion was arbitrary, it could lead to a less competitive environment and potentially higher costs for the government. Understanding the rationale is key to assessing value for money and taxpayer impact.

What are the specific risks associated with relying on AWS for cloud hosting, particularly concerning data security, vendor lock-in, and potential future cost escalations?

Key risks include data breaches or compliance issues if security protocols are not rigorously maintained. Vendor lock-in is a significant concern, making it difficult and costly to migrate to other providers. Future cost escalations are also possible as AWS adjusts its pricing models or as the Department's needs evolve, requiring careful contract management.

How effectively does this AWS cloud hosting contract support the Department of Labor's mission, and are there alternative solutions that could offer better value or resilience?

The effectiveness hinges on whether AWS services reliably support the Department's operations and data management needs. Evaluating alternatives would involve assessing other cloud providers or even on-premise solutions against factors like cost, security, scalability, and disaster recovery capabilities. A continuous assessment ensures the chosen solution remains optimal.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 1605TA-22-Q-00049

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13221 WOODLAND PARK RD, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $39,479,413

Exercised Options: $39,246,033

Current Obligation: $37,673,265

Actual Outlays: $28,366,790

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD22B

IDV Type: GWAC

Timeline