State Department's $77.9M IT security contract awarded to OBXTEK Inc. shows fair value with 8 bidders

Contract Overview

Contract Amount: $77,874,636 ($77.9M)

Contractor: Obxtek Inc

Awarding Agency: Department of State

Start Date: 2018-09-27

End Date: 2025-12-26

Contract Duration: 2,647 days

Daily Burn Rate: $29.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: INFORMATION SYSTEMS SECURITY SUPPORT (ISSS) FOR BUREAU OF CONSULAR AFFAIRS (CA) CONSULAR SYSTEMS AND TECHNOLOGY (CST) SYSTEMS

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $77.9 million to OBXTEK INC for work described as: INFORMATION SYSTEMS SECURITY SUPPORT (ISSS) FOR BUREAU OF CONSULAR AFFAIRS (CA) CONSULAR SYSTEMS AND TECHNOLOGY (CST) SYSTEMS Key points: 1. Contract offers good value for essential IT security services, crucial for consular operations. 2. Strong competition with 8 bidders suggests a healthy market for these specialized services. 3. Risk indicators are moderate, with performance dependent on contractor's ability to maintain system integrity. 4. This contract supports critical infrastructure for the Bureau of Consular Affairs' technology systems. 5. Positioned within the IT services sector, focusing on cybersecurity and system design. 6. The Time and Materials pricing structure requires careful monitoring to ensure cost control.

Value Assessment

Rating: good

The contract's value appears reasonable given the critical nature of information systems security support for the Bureau of Consular Affairs. Benchmarking against similar IT security contracts reveals that the average cost per year for this type of service can range significantly, but OBXTEK's pricing seems competitive within this specialized field. The Time and Materials (T&M) pricing model, while offering flexibility, necessitates diligent oversight to prevent cost overruns and ensure that the final expenditure aligns with the delivered value and scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 8 bidders vying for the opportunity. The presence of multiple bidders indicates a robust market for these specialized IT security services, suggesting that the government received a competitive price. The exclusion of sources clause indicates a specific reason for limiting the initial pool, but the subsequent full and open competition ensures broad market participation.

Taxpayer Impact: The strong competition level is beneficial for taxpayers as it drives down prices and encourages efficiency from the winning contractor, ensuring federal funds are used effectively for essential security services.

Public Impact

Benefits the Bureau of Consular Affairs by ensuring the security and integrity of its critical technology systems. Delivers essential information systems security support, safeguarding sensitive data and operational continuity. Geographic impact is primarily national, supporting the State Department's global consular operations. Workforce implications include the need for skilled cybersecurity professionals to fulfill the contract's requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the Time and Materials pricing structure.
Reliance on a single contractor for critical IT security functions could pose a risk if performance falters.
Ensuring continuous adaptation to evolving cybersecurity threats requires proactive contractor engagement.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Contract duration extends to late 2025, providing stability for essential services.
The contractor, OBXTEK Inc., has a track record in government contracting, suggesting familiarity with federal requirements.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on cybersecurity and computer systems design. The market for these services is substantial and growing, driven by increasing digital threats and the need for robust defense of sensitive government data. Comparable spending benchmarks for similar cybersecurity support contracts within federal agencies often range from tens to hundreds of millions of dollars, depending on the scope and duration. This contract's value is consistent with the specialized nature of protecting critical consular systems.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses within the provided data. The focus appears to be on securing specialized IT security expertise, which may be more readily available from larger, established firms. Further analysis would be needed to determine if small businesses are participating in the broader IT security market relevant to this contract or if there are opportunities for them in subcontracting roles.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of State's contracting officers and program managers within the Bureau of Consular Affairs. Accountability measures would include performance reviews, adherence to contract terms, and delivery of required security services. Transparency is facilitated through contract award data, but detailed operational oversight specifics are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of State IT Modernization Programs
Bureau of Consular Affairs Technology Modernization
Federal Cybersecurity Initiatives
Information Systems Security Support Contracts
Computer Systems Design Services

Risk Flags

Time and Materials pricing requires diligent oversight to control costs.
Dependence on contractor performance for critical security functions.
Need for continuous adaptation to evolving cybersecurity threats.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $77.9 million to OBXTEK INC. INFORMATION SYSTEMS SECURITY SUPPORT (ISSS) FOR BUREAU OF CONSULAR AFFAIRS (CA) CONSULAR SYSTEMS AND TECHNOLOGY (CST) SYSTEMS

Who is the contractor on this award?

The obligated recipient is OBXTEK INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $77.9 million.

What is the period of performance?

Start: 2018-09-27. End: 2025-12-26.

What is OBXTEK Inc.'s track record with the Department of State and similar federal agencies?

OBXTEK Inc. has a history of performing contracts with the Department of State and other federal agencies, primarily in the IT and professional services domains. Their portfolio often includes support for systems integration, cybersecurity, and program management. While specific performance metrics for this particular contract are not detailed here, their continued awards suggest a satisfactory performance history and an understanding of federal procurement requirements. A deeper dive into past performance reviews and contract close-outs would provide a more granular assessment of their reliability and quality of service delivery across their federal engagements.

How does the value of this contract compare to similar IT security support contracts awarded by the Department of State or other agencies?

The total contract value of approximately $77.9 million over its period of performance (September 2018 to December 2025) places it within a moderate range for comprehensive IT security support. Contracts for similar services, especially those involving critical infrastructure protection and extensive system design, can easily exceed this amount, particularly for longer durations or broader scopes. The fact that this contract was awarded under full and open competition with 8 bidders suggests that the pricing achieved was competitive. Benchmarking against contracts with similar North American Industry Classification System (NAICS) codes (like 541512) for agencies like the Department of Defense or Homeland Security would provide a more precise comparison, but the current value appears reasonable for the stated services.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract revolve around the Time and Materials (T&M) pricing structure, which can lead to cost overruns if not managed diligently. Another risk is the potential for performance degradation or security breaches if the contractor fails to keep pace with evolving cyber threats or maintain system integrity. Mitigation strategies likely include robust oversight by the contracting officer's representative (COR), regular performance reviews, strict adherence to service level agreements (SLAs), and potentially incorporating cost ceilings or incentivized performance metrics. The Department of State's established procurement and oversight processes are designed to manage these risks, but continuous vigilance is essential.

How effective is the competition level in ensuring cost-effectiveness for taxpayers?

The fact that this contract was awarded under full and open competition after an initial exclusion of sources, with 8 bidders participating, is a strong indicator of effective price discovery. A higher number of bidders generally leads to more competitive pricing as companies vie for the award. This level of competition suggests that the Department of State received proposals that were likely well-aligned with market rates and that OBXTEK Inc.'s winning bid was cost-effective relative to the other offers. This process helps ensure that taxpayer dollars are not being unnecessarily inflated due to a lack of market interest or a restricted bidding pool.

What is the historical spending pattern for IT security support within the Bureau of Consular Affairs or the Department of State?

Historical spending on IT security support within the Bureau of Consular Affairs (CA) and the broader Department of State has generally trended upwards, reflecting the increasing reliance on digital systems and the escalating threat landscape. While specific historical dollar amounts for CA's IT security are not provided here, the State Department as a whole invests significantly in cybersecurity to protect its global operations and sensitive diplomatic information. This contract, awarded in 2018 and extending through 2025, represents a substantial, multi-year commitment consistent with the ongoing need for robust IT security infrastructure and services. Trends indicate a sustained and often increasing allocation of resources towards safeguarding federal IT systems.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 19AQMM18R0040

Offers Received: 8

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8300 BOONE BLVD STE 800, TYSONS CORNER, VA, 22182

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $84,425,003

Exercised Options: $83,553,285

Current Obligation: $77,874,636

Actual Outlays: $22,577,473

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $567,171

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS06F0650Z

IDV Type: GWAC

Timeline