State Department's $69.5M IT program management contract awarded to Guidehouse Inc. shows mixed value and competition

Contract Overview

Contract Amount: $69,527,659 ($69.5M)

Contractor: Guidehouse Inc.

Awarding Agency: Department of State

Start Date: 2018-06-08

End Date: 2023-12-31

Contract Duration: 2,032 days

Daily Burn Rate: $34.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: PROGRAM MANAGEMENT SUPPORT FOR THE SERVICE STRATEGY OFFICE (SSO), WHICH WILL PROVIDE ENTERPRISE LEVEL INFORMATION TECHNOLOGY (IT) SERVICES, TO INCLUDE: BUSINESS CONSULTING SERVICES, CONTINUAL SERVICE IMPROVEMENT, REQUIREMENTS ANALYSIS, RISK ASSESSMENT AND MANAGEMENT, FINANCIAL ANALYSIS, TRACKING AND REPORTING; ACQUISITION MANAGEMENT AND SUPPORT, NETWORK MANAGEMENT, IT SECURITY COMPLIANCE, FISMA IMPLEMENTATION SUPPORT, REQUIREMENTS ANALYSIS, DESIGN, CODING, AND TESTING; LIFECYCLE ASSET MANAGEMENT, SPECIAL PROJECTS SUPPORT

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22153

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $69.5 million to GUIDEHOUSE INC. for work described as: PROGRAM MANAGEMENT SUPPORT FOR THE SERVICE STRATEGY OFFICE (SSO), WHICH WILL PROVIDE ENTERPRISE LEVEL INFORMATION TECHNOLOGY (IT) SERVICES, TO INCLUDE: BUSINESS CONSULTING SERVICES, CONTINUAL SERVICE IMPROVEMENT, REQUIREMENTS ANALYSIS, RISK ASSESSMENT AND MANAGEMENT, FINANCIAL AN… Key points: 1. The contract's value proposition appears fair, with a significant portion allocated to essential IT services and program management. 2. Competition was robust, indicating potential for competitive pricing, though the Time and Materials pricing model warrants scrutiny. 3. Risk indicators are moderate, primarily related to the Time and Materials pricing structure which can lead to cost overruns if not managed tightly. 4. Performance context suggests a long-term engagement, implying a level of satisfaction with the contractor's services. 5. The contract positions Guidehouse Inc. as a key IT service provider within the Department of State. 6. The total value of $69.5M over its duration represents substantial investment in enterprise IT services.

Value Assessment

Rating: fair

The contract's total value of $69.5 million over approximately five years suggests a significant investment in IT program management. Benchmarking against similar large-scale IT support contracts within federal agencies is challenging without more granular data on specific services rendered. However, the Time and Materials (T&M) pricing structure, while common for evolving IT needs, can present a risk for cost control compared to fixed-price contracts. The reported value of $34.2 million in task orders issued suggests a substantial portion of the contract has been utilized, but a detailed cost-benefit analysis would require deeper insight into the efficiency and effectiveness of the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of two delivery orders suggests a structured approach to tasking within the contract. Full and open competition generally fosters a competitive environment, which can lead to better pricing and service quality. However, the specific number of bidders and the details of the bidding process are not provided, limiting a deeper assessment of the competitive intensity and its impact on price discovery.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive market rates, preventing potential overpayment that could occur with less competitive solicitations.

Public Impact

Federal employees within the Department of State benefit from enhanced IT services and program management support. The contract delivers enterprise-level IT services, including business consulting, service improvement, requirements analysis, risk management, and IT security compliance. Geographic impact is primarily within the Department of State's operational areas, supporting its global mission. Workforce implications include the potential for specialized IT and program management roles being filled by Guidehouse Inc. personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials pricing model carries inherent risks of cost escalation if not rigorously managed and monitored for efficiency.
Lack of detailed performance metrics makes it difficult to independently assess the true value for money and contractor efficiency.
The long duration of the contract (2018-2023) could indicate a reliance on the contractor, potentially limiting flexibility for future service providers.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair market value.
The contract has been actively utilized with significant task orders issued, indicating a need for these services and contractor engagement.
The contractor, Guidehouse Inc., is a known entity in government contracting, suggesting a degree of established capability and experience.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services and program management. The market for such services is large and highly competitive, with numerous firms offering specialized expertise. The Department of State's spending on IT services is substantial, reflecting the critical role technology plays in modern diplomacy and operations. Comparable spending benchmarks would typically involve other large federal agencies procuring similar comprehensive IT program management and support services, often in the tens to hundreds of millions of dollars over several years.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside component (ss: false, sb: false). This suggests that the primary award was not specifically targeted towards small businesses. While there is no explicit mention of subcontracting requirements for small businesses, large prime contractors are often encouraged or required to engage small businesses for a portion of the work. The impact on the small business ecosystem would depend on whether Guidehouse Inc. actively seeks out and utilizes small business subcontractors for specialized IT services or support functions.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and delivery schedules. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Specific Inspector General (IG) jurisdiction would depend on the nature of any potential issues or investigations related to contract performance or compliance.

Related Government Programs

Department of State IT Modernization Initiatives
Federal Civilian Agency IT Services Contracts
Program Management Support Services
Enterprise IT Consulting Services

Risk Flags

Time and Materials Pricing Model Risk
Potential for Cost Overruns
Lack of Detailed Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $69.5 million to GUIDEHOUSE INC.. PROGRAM MANAGEMENT SUPPORT FOR THE SERVICE STRATEGY OFFICE (SSO), WHICH WILL PROVIDE ENTERPRISE LEVEL INFORMATION TECHNOLOGY (IT) SERVICES, TO INCLUDE: BUSINESS CONSULTING SERVICES, CONTINUAL SERVICE IMPROVEMENT, REQUIREMENTS ANALYSIS, RISK ASSESSMENT AND MANAGEMENT, FINANCIAL ANALYSIS, TRACKING AND REPORTING; ACQUISITION MANAGEMENT AND SUPPORT, NETWORK MANAGEMENT, IT SECURITY COMPLIANCE, FISMA IMPLEMENTATION SUPPORT, REQUIREMENTS ANALYSIS, DESIGN, CODING, AND TESTING; LIFECYCLE ASSET MANAGEMENT

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $69.5 million.

What is the period of performance?

Start: 2018-06-08. End: 2023-12-31.

What is the track record of Guidehouse Inc. in delivering similar IT program management services to federal agencies?

Guidehouse Inc. has a significant presence in federal IT contracting, often providing a range of services including program management, IT strategy, cybersecurity, and digital transformation. They have secured numerous contracts across various civilian and defense agencies. Their track record generally indicates experience with large, complex IT programs. However, a detailed assessment would require reviewing specific past performance evaluations, any past disputes or contract terminations, and client satisfaction feedback for contracts of comparable scope and value to this Department of State award. Without access to detailed past performance reports, it's difficult to definitively gauge their success rate on similar engagements.

How does the pricing structure (Time and Materials) compare to other IT program management contracts of similar scope?

Time and Materials (T&M) contracts are common for IT services where the scope of work is not clearly defined at the outset or is expected to evolve. Compared to fixed-price contracts, T&M offers flexibility but carries a higher risk of cost overruns if not managed diligently. For large-scale IT program management, agencies often use a hybrid approach, potentially using T&M for initial discovery and planning phases, and then transitioning to firm-fixed-price for more defined deliverables. The benchmark for T&M pricing involves comparing the hourly rates for labor categories against market data and government estimates. The Department of State's use of T&M here suggests a need for adaptability, but it necessitates robust oversight to ensure cost efficiency and prevent scope creep from inflating the total contract value beyond initial expectations.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, typical KPIs for IT program management support contracts include metrics related to project schedule adherence, budget performance, quality of deliverables (e.g., accuracy of requirements analysis, effectiveness of risk assessments), stakeholder satisfaction, and successful implementation of IT services. For a contract like this, which covers a broad range of IT services, KPIs might also include system uptime, security compliance rates (e.g., FISMA), and the efficiency of acquisition support processes. The effectiveness of oversight and the contractor's ability to meet these unstated KPIs would be crucial for ensuring value for money.

What is the historical spending pattern for IT program management support at the Department of State?

Historical spending on IT program management support at the Department of State is substantial, reflecting the agency's complex global operations and reliance on technology. While the specific data for this contract shows $69.5 million over its period of performance (2018-2023), the Department of State consistently invests heavily in IT infrastructure, cybersecurity, and program management across various offices. Annual IT budgets for large federal agencies like the State Department often run into the hundreds of millions or even billions of dollars. This particular contract represents a significant, but likely not isolated, investment in ensuring the effective management and delivery of enterprise IT services critical to the agency's mission.

Are there any identified risks associated with the contractor's performance or the nature of the services provided?

The primary identified risk associated with this contract is the Time and Materials (T&M) pricing structure. T&M contracts can lead to cost overruns if not managed with strict oversight, as the contractor is reimbursed for labor hours and material costs incurred. Without clear deliverables and performance metrics tied to specific outcomes, there's a risk that the contractor may not be incentivized to maximize efficiency. Other potential risks, common to large IT contracts, could include cybersecurity vulnerabilities, integration challenges with existing systems, or delays in service delivery. The long duration and broad scope also present a risk of vendor lock-in or a decline in service innovation over time if not actively managed.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Technology Services Inc.

Address: 1676 INTERNATIONAL DR STE 800, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $344,346,903

Exercised Options: $289,396,944

Current Obligation: $69,527,659

Actual Outlays: $29,382,026

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200040W

IDV Type: GWAC

Timeline