VA awards $57.4M for IT support to Liberty IT Solutions, highlighting a need for system enhancements

Contract Overview

Contract Amount: $57,413,427 ($57.4M)

Contractor: Liberty IT Solutions LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-02-26

End Date: 2022-02-25

Contract Duration: 1,460 days

Daily Burn Rate: $39.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF SOFTWARE ENHANCEMENTS AND OPERATIONS AND MAINTENANCE (O&M) FOR ALL E&E PROJECTS/PROGRAMS SUPPORTING THE ENTIRE EHBD PROGRAM, THE E&E PORTION OF PURCHASED CARE, AND COMMUNITY CARE.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $57.4 million to LIBERTY IT SOLUTIONS LLC for work described as: IGF::OT::IGF SOFTWARE ENHANCEMENTS AND OPERATIONS AND MAINTENANCE (O&M) FOR ALL E&E PROJECTS/PROGRAMS SUPPORTING THE ENTIRE EHBD PROGRAM, THE E&E PORTION OF PURCHASED CARE, AND COMMUNITY CARE. Key points: 1. Contract value represents a significant investment in IT infrastructure for the Veterans Health Administration. 2. The fixed-price nature of the contract aims to control costs and provide predictable spending. 3. Competition was robust, suggesting a healthy market for these specialized IT services. 4. Performance duration of four years indicates a long-term need for sustained IT operations and maintenance. 5. The award is concentrated within a single vendor, necessitating close monitoring of performance and value. 6. This contract supports critical functions within the EHBD program and purchased care initiatives.

Value Assessment

Rating: good

The contract's total value of $57.4 million over four years averages to approximately $14.35 million annually. Benchmarking against similar IT support contracts for large federal agencies, this annual spend appears within a reasonable range, especially considering the scope of supporting the entire EHBD program and purchased care. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value. However, without specific details on the services delivered and their impact, a definitive value-for-money assessment is challenging.

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 five bidders suggests a competitive environment for this type of IT support. A competitive process generally leads to better price discovery and encourages vendors to offer their best terms and pricing to secure the award. The level of competition here is a positive sign for the government securing a fair price.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied for the contract, driving down costs and improving service offerings.

Public Impact

Veterans will benefit from improved IT systems supporting healthcare programs like EHBD and purchased care. The contract ensures the continued operation and enhancement of critical IT infrastructure for the VA. Services delivered will impact the efficiency and effectiveness of healthcare delivery to veterans nationwide. IT professionals and support staff employed by Liberty IT Solutions will be involved in fulfilling this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long-term nature and specialized IT support required.
Reliance on a single vendor for critical IT operations could pose risks if performance degrades.
Ensuring ongoing innovation and adaptation to evolving IT needs within the contract's scope.

Positive Signals

Awarded through full and open competition, indicating a competitive market and fair pricing.
Firm-fixed-price contract type provides cost certainty and budget predictability.
Long-term contract duration allows for stable support and potential for deep system understanding.
Supports critical VA programs, indicating alignment with agency mission and veteran needs.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a crucial segment of the IT industry supporting government operations. The market for such services is large and competitive, with numerous firms capable of providing IT support, operations, and maintenance. The VA's spending in this area is substantial, reflecting the complexity and scale of its IT needs. This contract fits within the broader trend of federal agencies outsourcing IT functions to specialized providers to manage complex systems and ensure operational continuity.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While there is no direct small business set-aside, Liberty IT Solutions LLC, as the prime contractor, may engage small businesses as subcontractors. The extent of subcontracting to small businesses would depend on the specific requirements of the contract and the company's subcontracting plan. Without this information, the direct impact on the small business ecosystem is unclear, though larger prime contracts can sometimes create opportunities down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The VA's Office of Inspector General (OIG) also provides oversight by conducting audits and investigations into VA programs and contracts to prevent fraud, waste, and abuse. Transparency is facilitated through contract databases like FPDS, which provide public access to contract details.

Related Government Programs

Veterans Health Administration IT Modernization
Department of Defense IT Services
General Services Administration IT Schedule
Healthcare Information Technology Services
Federal Civilian IT Procurement

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical IT functions
Cybersecurity vulnerabilities
Scope creep risk if not managed tightly

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $57.4 million to LIBERTY IT SOLUTIONS LLC. IGF::OT::IGF SOFTWARE ENHANCEMENTS AND OPERATIONS AND MAINTENANCE (O&M) FOR ALL E&E PROJECTS/PROGRAMS SUPPORTING THE ENTIRE EHBD PROGRAM, THE E&E PORTION OF PURCHASED CARE, AND COMMUNITY CARE.

Who is the contractor on this award?

The obligated recipient is LIBERTY IT SOLUTIONS 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 $57.4 million.

What is the period of performance?

Start: 2018-02-26. End: 2022-02-25.

What is the track record of Liberty IT Solutions LLC with the Department of Veterans Affairs?

Liberty IT Solutions LLC has a history of receiving contracts from the Department of Veterans Affairs. This specific contract, valued at approximately $57.4 million, represents a significant award for IT support services. Analyzing past performance on similar VA contracts would provide further insight into their reliability, quality of service, and ability to meet deadlines and technical requirements. A review of past performance evaluations and any reported issues or successes would be crucial for a comprehensive understanding of their track record with the agency.

How does the annual cost of this contract compare to similar IT support contracts for other large federal agencies?

The annual cost for this contract averages around $14.35 million ($57.4M / 4 years). Comparing this to similar IT support contracts for large federal agencies requires access to a broader dataset of contract awards. However, for a contract supporting comprehensive IT operations and maintenance for a major program like the VA's EHBD and purchased care, this annual figure appears to be within a reasonable range. Agencies like the Department of Defense or HHS also award substantial IT support contracts, and their annual costs can vary widely based on scope, complexity, and specific services. Without direct comparable data points, it's difficult to definitively state if it's high or low, but it doesn't immediately suggest overspending given the context.

What are the primary risks associated with this contract for the VA?

Key risks for the VA include potential vendor performance issues, where Liberty IT Solutions LLC might fail to deliver services as per the contract's requirements, leading to disruptions in critical IT systems. Another risk is cost overrun if the firm-fixed-price structure proves inadequate for unforeseen technical challenges, though this is less likely with FFP. Vendor lock-in is also a concern, as transitioning to a new provider for specialized IT support can be complex and costly. Furthermore, cybersecurity risks are inherent in IT contracts; any breach or vulnerability exploited through the contractor's systems could have severe consequences for VA data and operations.

How effective is the firm-fixed-price (FFP) contract type in ensuring value for money in this IT support scenario?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money by shifting the risk of cost overruns to the contractor. This incentivizes the contractor to manage costs efficiently and deliver the specified services within the agreed-upon budget. For IT support and operations and maintenance (O&M), where the scope of work can be relatively well-defined, FFP provides budget certainty for the agency. However, if the scope is highly dynamic or involves significant research and development, FFP might be less suitable than other contract types. In this case, for ongoing O&M, FFP is a strong choice for cost control.

What is the historical spending trend for similar IT support services by the Department of Veterans Affairs?

The Department of Veterans Affairs consistently spends significant amounts on IT support services, reflecting the critical role technology plays in its operations, particularly in managing veteran health records and benefits. Historical data shows a steady increase in IT spending across federal agencies, including the VA, driven by modernization efforts, cybersecurity needs, and the expansion of digital services. Contracts for IT support, systems integration, and software development are common. Analyzing specific historical spending on EHBD program support or similar IT O&M contracts would reveal trends in contract values, competition levels, and vendor performance over time.

What are the implications of having only five bidders for this significant IT support contract?

Having five bidders for a contract of this magnitude ($57.4 million) suggests a reasonably competitive market, but it also indicates that the pool of qualified vendors might be somewhat limited. While five bidders are better than one or two, a larger number could potentially drive prices lower and foster more innovation. The VA should analyze why more vendors did not participate. Were the requirements too specialized, the bidding process too complex, or were other vendors focused on different opportunities? Understanding this could inform future procurement strategies to encourage broader competition.

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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 2303 DULLES STA BLVD STE 210, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $88,311,962

Exercised Options: $57,413,427

Current Obligation: $57,413,427

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $51,076,894

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1015

IDV Type: IDC

Timeline