State Department awards $19.6M for enterprise operations, raising value-for-money questions due to sole-source nature

Contract Overview

Contract Amount: $19,565,453 ($19.6M)

Contractor: Koniag Data Solutions LLC

Awarding Agency: Department of State

Start Date: 2024-08-31

End Date: 2026-02-28

Contract Duration: 546 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE OPERATIONS AWARD

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $19.6 million to KONIAG DATA SOLUTIONS LLC for work described as: ENTERPRISE OPERATIONS AWARD Key points: 1. The contract's value-for-money is difficult to assess without competitive bidding. 2. Limited competition dynamics suggest potential for higher pricing. 3. The sole-source award presents a risk indicator for optimal resource utilization. 4. Performance context is limited to custom computer programming services. 5. This contract positions Koniag Data Solutions within the IT services sector for the State Department.

Value Assessment

Rating: questionable

Benchmarking the value of this $19.6 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if alternative, more cost-effective solutions were overlooked. The fixed-price nature provides some cost certainty, but the lack of competition prevents a robust comparison against similar contracts or market rates for custom computer programming services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures and was awarded on a sole-source basis. This means only one vendor, Koniag Data Solutions LLC, was solicited and awarded the contract. The lack of competition limits the opportunity for price discovery and may not yield the most advantageous pricing for the government.

Taxpayer Impact: Taxpayers may not be receiving the best possible price for these services due to the absence of a competitive bidding process.

Public Impact

The primary beneficiary is the Department of State, which will receive enterprise operations support. The services delivered include custom computer programming, crucial for departmental operations. The geographic impact is primarily within Virginia, where the contractor is located. Workforce implications include the potential for skilled IT professionals to be engaged on this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value.
Lack of transparency in the procurement process.
Potential for cost overruns if not closely managed due to lack of benchmarks.

Positive Signals

Contract awarded to a known entity, potentially ensuring continuity of services.
Firm fixed-price contract provides cost certainty for the government.
Contract duration is defined, allowing for planning.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on custom computer programming services. The IT services market is vast and highly competitive, with numerous firms offering specialized solutions. The State Department's spending on such services is typical for large government agencies requiring robust operational support. Benchmarking against similar custom programming contracts within the federal government would require access to detailed scope of work and pricing structures, which are not readily available for sole-source awards.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, Koniag Data Solutions LLC, will likely perform the majority of the work, with limited direct impact on the small business ecosystem through subcontracting opportunities on this specific award.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and program officials within the Department of State. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competitively procured contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State IT Services Contracts
Custom Computer Programming Services
Enterprise Operations Support Contracts
Sole-Source IT Procurements

Risk Flags

Sole-source award may limit competition and value.
Lack of detailed performance metrics in summary data.
Potential for higher costs due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $19.6 million to KONIAG DATA SOLUTIONS LLC. ENTERPRISE OPERATIONS AWARD

Who is the contractor on this award?

The obligated recipient is KONIAG DATA SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2024-08-31. End: 2026-02-28.

What is the track record of Koniag Data Solutions LLC with the federal government, particularly with the Department of State?

Koniag Data Solutions LLC has a history of federal contracting. While specific details on past performance for this exact type of 'enterprise operations award' are not provided in the abbreviated data, their presence suggests prior engagement. A deeper dive into federal procurement databases like FPDS or SAM.gov would reveal the full scope of their past contracts, including performance ratings, past issues, and overall value of previous awards. Understanding their historical performance, especially with the Department of State, is crucial for assessing the risk associated with this sole-source award and ensuring successful delivery of services.

How does the $19.6 million value compare to similar custom computer programming services contracts awarded by the Department of State or other agencies?

Without competitive bidding, a direct value comparison is difficult. However, $19.6 million for a two-year contract (546 days) for custom computer programming services is a significant investment. To benchmark, one would need to identify similar sole-source or competitively awarded contracts for comparable services (e.g., software development, system integration, IT support) from agencies of similar size and complexity. Factors like the specific technical requirements, labor categories, and duration would need to be aligned. The absence of competition here means this price point hasn't been tested against market alternatives, making it harder to definitively say if it represents optimal value.

What are the specific risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award is the lack of price competition, which can lead to paying a premium for services. There's also a risk that the chosen vendor may not be the most innovative or best-suited solution available, as alternatives were not explored. Furthermore, without the pressure of competition, there might be less incentive for the contractor to achieve peak efficiency or cost savings. Oversight becomes even more critical to ensure the government receives adequate value and that the contractor meets all performance expectations. The government must have a strong justification for the sole-source determination to mitigate these inherent risks.

What are the key performance indicators (KPIs) or deliverables expected under this 'enterprise operations award'?

The provided data indicates the contract is for 'Custom Computer Programming Services' and falls under 'ENTERPRISE OPERATIONS AWARD'. However, specific Key Performance Indicators (KPIs) or detailed deliverables are not included in the abbreviated information. Typically, such contracts would outline specific software functionalities to be developed, system performance metrics (e.g., uptime, response times), project milestones, documentation requirements, and user support levels. The success of the contract hinges on clearly defined and measurable KPIs within the full contract document, allowing the Department of State to effectively monitor performance and ensure the services meet their operational needs.

How has the Department of State's spending on custom computer programming services trended over the past five years, and does this award align with that trend?

Analyzing the historical spending trend of the Department of State on custom computer programming services requires access to comprehensive historical contract data. Without that data, it's impossible to definitively state if this $19.6 million award aligns with past patterns. Generally, large federal agencies like the State Department have consistent needs for IT modernization and custom software development, so spending in this area can be substantial and relatively stable, though it may fluctuate based on specific modernization initiatives or security requirements. This award represents a significant single investment, and understanding its place within the broader departmental IT budget and historical procurement patterns would provide better context.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 19AQMM24R0138

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 700, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,852,680

Exercised Options: $19,852,680

Current Obligation: $19,565,453

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline