VA awards $25.2M for IT support to GOVCIO, LLC, focusing on benefits systems

Contract Overview

Contract Amount: $25,244,172 ($25.2M)

Contractor: Govcio, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-08-27

End Date: 2022-08-26

Contract Duration: 1,460 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR VA BENEFITS SUSTAINMENT MANAGED SERVICES. THE PERIOD OF PERFORMANCE (POP) CONSISTING OF A 12-MONTH BASE PERIOD, WITH THREE (3) 12-MONTH OPTION PERIODS, AND SIX OPTIONAL TASKS. THE EFFORT IS FOR PROJECT MANAGEMENT AND REPORTING ASSISTANCE, INTAKE PROCESS AND TOOLS SUPPORT, MAINTENANCE PLANNING, SYSTEMS ARCHITECTURE SUPPORT, ENGINEERING SUPPORT, MAINTENANCE MODIFICATIONS, TESTING, RELEASE MANAGEMENT, OPERATIONS AND MAINTENANCE (O&M) SUPPORT, TECHNICAL SUPPORT, INCIDENT MANAGEMENT SUPPORT, SECURITY SUPPORT, TIER TWO AND TIER THREE HELP DESK SUPPORT, VERSION RELEASE TRAINING, AND DISASTER RECOVERY SUPPORT SERVICES FOR APPLICATIONS/SYSTEMS WITHIN THE BENEFITS DOMAIN.

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $25.2 million to GOVCIO, LLC for work described as: IGF::OT::IGF TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR VA BENEFITS SUSTAINMENT MANAGED SERVICES. THE PERIOD OF PERFORMANCE (POP) CONSISTING OF A 12-MONTH BASE PERIOD, WITH THREE (3) 12-MONTH OPTION PERIODS, AND SIX OPTIONAL TASKS. THE EFF… Key points: 1. Contract focuses on critical IT infrastructure for Veterans' benefits, ensuring continuity of services. 2. GOVCIO, LLC, a relatively new entity, secured this significant award, warranting performance monitoring. 3. The contract's fixed-price structure aims to control costs, but scope creep could impact final expenditure. 4. Managed services for complex IT systems present inherent risks in performance and security. 5. This award falls within the broader trend of federal agencies outsourcing IT operations for specialized support. 6. The Department of Veterans Affairs relies heavily on such contracts to maintain its digital services.

Value Assessment

Rating: good

The contract value of $25.2 million over approximately four years appears reasonable for comprehensive IT managed services supporting critical benefits systems. Benchmarking against similar large-scale IT support contracts for federal agencies suggests this pricing is within expected ranges, especially considering the specialized nature of benefits administration. However, detailed cost breakdowns and comparisons to industry benchmarks for specific services like help desk support and systems architecture would provide a more precise value assessment. The firm-fixed-price contract type offers cost certainty, but vigilance is needed to ensure the scope remains aligned with the initial award to prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of four bids suggests a competitive environment, which typically drives better pricing and service offerings. The specific number of bidders (4) is moderate, and further analysis would be needed to determine if this level of competition was sufficient to achieve optimal price discovery for the government. The agency's approach to competition appears standard for this type of IT service requirement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where vendors compete on price and quality, leading to more cost-effective solutions and potentially lower overall government spending on IT services.

Public Impact

Veterans will benefit from the continued and improved availability of critical benefits processing and management systems. The contract ensures the delivery of essential IT services including project management, help desk support, security, and system maintenance. Services are primarily delivered within the United States, supporting the operational needs of the Department of Veterans Affairs. The contract supports IT professionals and potentially other roles within GOVCIO, LLC, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition planning is inadequate.
Risk of performance degradation if key personnel are not retained by the contractor.
Security vulnerabilities could arise if robust cybersecurity measures are not consistently applied.
Dependency on a single contractor for critical IT functions increases systemic risk.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Full and open competition suggests a competitive bidding process.
Contract duration allows for stable service delivery and knowledge retention.
Focus on critical benefits systems aligns with VA's mission.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. The Department of Veterans Affairs is a major consumer of IT services, with substantial spending allocated to maintaining and modernizing its systems, particularly those related to healthcare and benefits. The market for IT managed services is competitive, with numerous large and small businesses vying for federal contracts. This award to GOVCIO, LLC represents a portion of the VA's overall IT expenditure, which is often benchmarked against similar agency spending on comparable services.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate specific subcontracting requirements for small businesses in the provided data. The prime contractor, GOVCIO, LLC, is not explicitly identified as a small business. Therefore, the direct impact on the small business ecosystem appears limited unless GOVCIO, LLC voluntarily engages small businesses for subcontracting. Further investigation into the contractor's subcontracting plan would be necessary to fully assess its impact on small businesses.

Oversight & Accountability

Oversight for this contract is primarily the responsibility of the Department of Veterans Affairs contracting officers and program managers. The contract type (firm-fixed-price) implies performance standards that must be met. While specific Inspector General (IG) jurisdiction is not detailed, the VA Office of Inspector General would likely have oversight authority over potential fraud, waste, or abuse related to this contract. Transparency is facilitated through contract award databases, but detailed performance metrics and reporting are typically managed internally by the agency.

Related Government Programs

VA IT Modernization
Federal Cloud Computing Strategy
IT Services for Healthcare Agencies
Benefits Administration Systems Support
Managed Services Contracts

Risk Flags

Performance Risk
Security Risk
Vendor Lock-in Potential
Contractor Capacity/Experience

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $25.2 million to GOVCIO, LLC. IGF::OT::IGF TRANSFORMATION TWENTY-ONE TOTAL TECHNOLOGY NEXT GENERATION (T4NG) TASK ORDER FOR VA BENEFITS SUSTAINMENT MANAGED SERVICES. THE PERIOD OF PERFORMANCE (POP) CONSISTING OF A 12-MONTH BASE PERIOD, WITH THREE (3) 12-MONTH OPTION PERIODS, AND SIX OPTIONAL TASKS. THE EFFORT IS FOR PROJECT MANAGEMENT AND REPORTING ASSISTANCE, INTAKE PROCESS AND TOOLS SUPPORT, MAINTENANCE PLANNING, SYSTEMS ARCHITECTURE SUPPORT, ENGINEERING SUPPORT, MAINTENANCE MODIFICATIONS, TESTING, RELEASE MANAGEMENT, O

Who is the contractor on this award?

The obligated recipient is GOVCIO, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $25.2 million.

What is the period of performance?

Start: 2018-08-27. End: 2022-08-26.

What is the track record of GOVCIO, LLC in delivering similar IT managed services to federal agencies?

GOVCIO, LLC is a relatively new entity, and its track record in delivering large-scale IT managed services, particularly for complex federal systems like those within the Department of Veterans Affairs, appears limited based on publicly available data. While the company may have experience through its personnel, the organizational history of successfully executing contracts of this magnitude and complexity is not extensively documented. The VA's award of this significant task order suggests a level of confidence in the company's capabilities, but ongoing monitoring of performance, adherence to schedules, and quality of deliverables will be crucial to establishing a robust track record. Future performance on this contract will be a key indicator of their capacity to handle such critical IT functions.

How does the awarded price compare to industry benchmarks for similar IT managed services?

The total awarded value of $25.2 million over approximately four years for comprehensive IT managed services, including project management, help desk, security, and systems architecture support, appears to be within a reasonable range when compared to general industry benchmarks for large federal IT contracts. However, a precise comparison requires detailed breakdowns of the services provided and their associated costs. For instance, the cost per help desk ticket, per server managed, or per hour of specialized engineering support would need to be benchmarked against market rates. Given the firm-fixed-price nature, the government has a degree of cost certainty, but the value-for-money assessment hinges on the quality and efficiency of the services delivered relative to the price paid over the contract's life.

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

The primary risks associated with this contract include potential performance issues, security vulnerabilities, and vendor lock-in. Performance risks stem from the complexity of VA's benefits systems and the need for consistent, high-quality support. Security risks are inherent in managing sensitive veteran data and require robust cybersecurity protocols. Vendor lock-in could occur if the transition to or from GOVCIO, LLC is not managed effectively. Mitigation strategies likely involve the VA's established oversight mechanisms, including performance metrics, regular reviews, and defined service level agreements (SLAs). The firm-fixed-price structure incentivizes the contractor to perform efficiently. Clear exit strategies and knowledge transfer plans are also critical for mitigating long-term dependency.

How effective is the competition level in ensuring optimal price discovery for the VA?

The contract was awarded under full and open competition with four bids received. While four bidders indicate a competitive process, the optimal level of competition can vary depending on the specificity and size of the requirement. For a large, complex IT managed services contract, four bids suggest a reasonable level of market interest. This competition likely pressured bidders to offer competitive pricing and service terms. However, to definitively assess optimal price discovery, one would need to compare the awarded price against a broader market analysis or historical data for similar requirements. If the market typically sees more bidders for such contracts, or if the bids were clustered closely, it might suggest room for even greater price competition.

What is the historical spending pattern for similar IT managed services at the Department of Veterans Affairs?

The Department of Veterans Affairs has a significant and consistent history of awarding substantial contracts for IT managed services, reflecting its large and complex technology infrastructure supporting healthcare and benefits for millions of veterans. Spending in this category typically runs into hundreds of millions, and often billions, of dollars annually across various IT domains, including systems maintenance, cybersecurity, cloud services, and application development. This $25.2 million award for benefits systems support is a component of that larger IT spending portfolio. Historical data would show a trend of outsourcing these critical functions to specialized vendors to ensure operational continuity and leverage external expertise, with spending fluctuating based on modernization initiatives and evolving technological needs.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 101 CONSTITUTION AVE NW STE 100W, WASHINGTON, DC, 20001

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: $140,362,598

Exercised Options: $25,244,172

Current Obligation: $25,244,172

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $18,019,611

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1003

IDV Type: IDC

Timeline