State Department awards $25.7M for website support, raising questions about competition and value

Contract Overview

Contract Amount: $25,718,707 ($25.7M)

Contractor: VMD Systems Integrators, LLC

Awarding Agency: Department of State

Start Date: 2024-09-01

End Date: 2026-06-30

Contract Duration: 667 days

Daily Burn Rate: $38.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: WEBSITE SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20522

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $25.7 million to VMD SYSTEMS INTEGRATORS, LLC for work described as: WEBSITE SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Significant duration of 667 days suggests a need for stable, long-term support. 3. Focus on Computer Systems Design Services indicates a critical IT infrastructure component. 4. High potential for cost overruns given the lack of competitive bidding. 5. Performance context is crucial to understand if the contractor is meeting defined objectives. 6. Sector positioning within IT services highlights the importance of reliable digital infrastructure for government operations.

Value Assessment

Rating: questionable

The contract's value of $25.7 million for website support services is difficult to benchmark without competitive data. As a sole-source award, there's an inherent risk that the pricing may not reflect market rates or the most cost-effective solutions. A comparison to similar government-wide contracts for IT support or website maintenance would be necessary to assess if the proposed labor hours and duration align with industry standards and offer good value for the taxpayer. The absence of competition makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of State did not solicit bids from multiple vendors. This approach is typically used when only one vendor possesses the necessary qualifications, or in urgent situations. The lack of competition means that the pricing and terms were negotiated directly with VMD Systems Integrators, LLC, potentially leading to higher costs than if multiple vendors had competed. The limited competition restricts the government's ability to leverage market forces for better price discovery.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the absence of competition removes the incentive for vendors to offer their lowest possible prices. This contract's value could be higher than if it had been competed openly.

Public Impact

The primary beneficiaries are the Department of State personnel and potentially the public who interact with its websites. Services delivered include computer systems design and support, crucial for maintaining the functionality and accessibility of State Department online platforms. Geographic impact is likely global, as the Department of State's online presence serves international stakeholders and U.S. citizens abroad. Workforce implications may include reliance on VMD Systems Integrators' staff for specialized IT support, potentially reducing the need for in-house expertise in certain areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Performance metrics and quality assurance details are not publicly available, making it hard to assess contractor effectiveness.
Contract duration of nearly two years could lock the government into a potentially suboptimal solution if needs change.

Positive Signals

VMD Systems Integrators, LLC is an established contractor, suggesting some level of proven capability.
The contract addresses a clear need for website support, essential for government operations.
The award is for a defined period, allowing for re-evaluation at its conclusion.

Sector Analysis

The IT services sector, particularly computer systems design and related services, is a significant area of federal spending. This contract falls within the broader category of IT support, which is essential for government agencies to maintain their digital infrastructure, manage data, and provide online services. The market for these services is competitive, but specific niche requirements or existing system knowledge can sometimes lead to sole-source awards. Benchmarking this contract against similar IT support contracts awarded by agencies like the General Services Administration (GSA) or other large departments would provide context on pricing and scope.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, VMD Systems Integrators, LLC, is a mid-sized business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, and opportunities for small businesses to participate in this contract may be limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Department of State IT Modernization Initiatives
Federal Civilian Agency Website Development and Maintenance Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited transparency in procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $25.7 million to VMD SYSTEMS INTEGRATORS, LLC. WEBSITE SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is VMD SYSTEMS INTEGRATORS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.7 million.

What is the period of performance?

Start: 2024-09-01. End: 2026-06-30.

What is the track record of VMD Systems Integrators, LLC with the Department of State and other federal agencies?

VMD Systems Integrators, LLC has a history of contracting with federal agencies, including the Department of State. Their past performance data, available through sources like the Federal Procurement Data System (FPDS) or contractor performance databases, would indicate their success in delivering similar IT services. Analyzing their performance on previous contracts, including any awards, past performance evaluations, and any disputes or terminations, is crucial for assessing their reliability and capability for this current website support services contract. A review of their financial stability and any significant contract awards or losses would also provide context on their operational capacity and market position.

How does the $25.7 million contract value compare to similar website support services contracts awarded by the Department of State or other agencies?

Benchmarking this $25.7 million contract against similar website support services requires access to a broader dataset of federal contract awards. Without competitive bidding, it's challenging to establish a precise market rate. However, by examining contracts for IT support, website design, and maintenance services awarded to other vendors by agencies of similar size and mission (e.g., other cabinet-level departments), one can identify a range of typical costs. Factors such as contract duration, labor categories, service level agreements, and the complexity of the websites supported would need to be considered for a meaningful comparison. A sole-source award inherently carries a higher risk of being priced above market value compared to a competitively bid contract.

What specific risks are associated with a sole-source award for critical IT infrastructure support?

Sole-source awards for critical IT infrastructure support present several risks. Foremost is the risk of inflated pricing due to the absence of competitive pressure, potentially leading to a higher cost for taxpayers. There's also a risk of reduced innovation and service quality, as the contractor may have less incentive to exceed expectations. Vendor lock-in is another concern, where the agency becomes dependent on a single provider, making it difficult and costly to switch vendors later. Furthermore, without a competitive process, it's harder to ensure that the chosen vendor possesses the absolute best capabilities or offers the most secure and efficient solutions available in the market. Finally, the lack of transparency in the procurement process can raise concerns about fairness and potential conflicts of interest.

What are the performance expectations and metrics for this website support contract?

The specific performance expectations and metrics for this website support contract are not detailed in the provided data. Typically, such contracts would include a Performance Work Statement (PWS) or Statement of Work (SOW) outlining required services, deliverables, and performance standards. Key performance indicators (KPIs) might include website uptime, response times for technical support, security patch implementation timelines, and user satisfaction ratings. The Department of State's contracting officer and program managers are responsible for monitoring VMD Systems Integrators, LLC's performance against these metrics throughout the contract period. Without access to the PWS/SOW, a thorough assessment of performance risk and quality assurance is not possible.

How has the Department of State's spending on website support services evolved over the past five years?

Analyzing the Department of State's historical spending on website support services over the past five years would require access to comprehensive federal procurement data. This would involve querying databases like FPDS to identify all contracts awarded for website support, IT maintenance, and related services by the Department of State. Trends in spending could reveal whether the department is increasing or decreasing its reliance on external support, the average contract values, and the prevalence of competitive versus sole-source awards. Such an analysis could highlight shifts in strategy, budget allocations, or vendor relationships within the department's IT infrastructure management.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: VMD Systems Integrators LLC

Address: 4114 LEGATO RD STE 700, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $35,558,692

Exercised Options: $30,086,315

Current Obligation: $25,718,707

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline