DoD's $23M IT Support Contract to STG LLC Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $22,971,406 ($23.0M)

Contractor: STG LLC

Awarding Agency: Department of Defense

Start Date: 2012-08-21

End Date: 2014-04-30

Contract Duration: 617 days

Daily Burn Rate: $37.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: ARL IT SUPPORT SERVICES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to STG LLC for work described as: ARL IT SUPPORT SERVICES Key points: 1. Contract awarded to STG LLC for IT support services demonstrates reasonable value for money. 2. Competition dynamics indicate a full and open process, potentially leading to competitive pricing. 3. Risk indicators appear low, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context suggests a focus on essential IT infrastructure support for the Department of the Army. 5. Sector positioning places this contract within the broader IT services market for government agencies.

Value Assessment

Rating: good

The contract's total value of approximately $23 million over its period of performance appears reasonable when benchmarked against similar IT support contracts awarded by the Department of Defense. The fixed-price contract type suggests that the government secured services at a predetermined cost, which is generally favorable. While specific performance metrics are not detailed here, the duration and scope imply a steady state of service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This broad competition is generally expected to drive down prices and encourage innovation. The number of bidders is not specified, but the full and open nature suggests a healthy competitive environment.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and ensures that the government is receiving services at market-competitive rates.

Public Impact

The Department of the Army benefits from reliable IT support services, ensuring the continuity of its operations. Essential IT infrastructure maintenance and support are delivered, crucial for military readiness and administrative functions. The primary geographic impact is within the Department of the Army's operational areas, likely concentrated in Virginia. Workforce implications include the employment of IT professionals by STG LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance degrades.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to an established entity (STG LLC) may indicate a track record of successful service delivery.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on wired telecommunications carriers and related support. The government's IT spending is a significant portion of its overall budget, with contracts like this supporting essential digital infrastructure. Comparable spending benchmarks in this area often involve multi-year agreements for network maintenance, cybersecurity, and end-user support.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses is likely limited to potential subcontracting opportunities, if any, offered by the prime contractor, STG LLC. The absence of a small business set-aside means the primary focus was on securing the best value through open competition.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are inherent in the fixed-price contract terms, requiring STG LLC to deliver specified services. Transparency is generally maintained through contract award databases, though detailed performance reports may not be publicly accessible.

Related Government Programs

Department of Defense IT Services
Army Network Infrastructure Support
Wired Telecommunications Services Contracts
Federal IT Support Contracts

Risk Flags

Potential for vendor lock-in
Dependence on contractor performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to STG LLC. ARL IT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is STG LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $23.0 million.

What is the period of performance?

Start: 2012-08-21. End: 2014-04-30.

What is STG LLC's track record with federal IT support contracts?

STG LLC has a history of performing IT support services for various federal agencies. While specific details on past performance for this particular contract are not provided in the summary data, their ability to secure a multi-year, multi-million dollar contract with the Department of the Army suggests a demonstrated capability. Further analysis would involve reviewing past performance evaluations, any contract disputes, and the scope of previous IT service contracts awarded to STG LLC to assess their reliability and expertise in delivering similar services.

How does the $23 million value compare to similar IT support contracts?

The $23 million total contract value for ARL IT SUPPORT SERVICES is within a common range for multi-year IT support agreements for large federal agencies. Benchmarking against similar contracts requires comparing scope, duration, and specific services. For instance, contracts for network maintenance, cybersecurity, and help desk support for entities of similar size and complexity within the Department of Defense or other large federal departments often fall within the tens of millions of dollars. The fixed-price nature of this contract also contributes to its value assessment, providing cost certainty.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential performance issues by the contractor, STG LLC, which could lead to disruptions in critical IT services for the Army. Another risk is the potential for cost increases if the fixed-price contract has poorly defined scope or if unforeseen technical challenges arise that require additional resources not initially accounted for. Over-reliance on a single vendor for essential services also presents a risk. However, the fixed-price structure aims to mitigate financial risks for the government, and the full and open competition suggests a selection process focused on capability and price.

How effective has this contract been in delivering IT support?

The provided data does not include specific metrics on the effectiveness of the IT support delivered under this contract. Effectiveness would typically be measured by factors such as system uptime, response times for support requests, successful implementation of IT upgrades, and user satisfaction. Without access to performance reports, contract modifications, or end-user feedback, a definitive assessment of effectiveness cannot be made. However, the contract's completion without apparent major issues suggests a level of satisfactory performance.

What are the historical spending patterns for IT support services by the Department of the Army?

The Department of the Army consistently spends significant amounts on IT support services, reflecting the critical role of technology in modern military operations. Historical spending patterns show a trend towards outsourcing various IT functions, including network management, cybersecurity, software development, and help desk support. Contracts are often awarded through competitive processes, with durations ranging from one to several years. Spending can fluctuate based on technological advancements, modernization initiatives, and evolving security requirements. This $23 million contract is indicative of the ongoing investment in maintaining and upgrading the Army's IT infrastructure.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: STG Group, Inc. (UEI: 079257316)

Address: 11710 PLAZA AMERICA DR, RESTON, VA, 20190

Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,262,375

Exercised Options: $23,262,375

Current Obligation: $22,971,406

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06D0015

IDV Type: IDC

Timeline