VA awards $378M for Cisco enterprise network maintenance, impacting 207K users over 5 years

Contract Overview

Contract Amount: $378,443,043 ($378.4M)

Contractor: RED River Technology LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-10-01

End Date: 2024-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $207.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS CONTRACT IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH CISCO BUSINESS CRITICAL ENTERPRISE SERVICE AGREEMENT MAINTENANCE AND SUPPORT SERVICES THE VA ENTERPRISE NETWORK INFRASTRUCTURE THAT EXPIRES SEPTEMBER 30, 2019.

Place of Performance

Location: CLAREMONT, SULLIVAN County, NEW HAMPSHIRE, 03743

State: New Hampshire Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $378.4 million to RED RIVER TECHNOLOGY LLC for work described as: THIS CONTRACT IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH CISCO BUSINESS CRITICAL ENTERPRISE SERVICE AGREEMENT MAINTENANCE AND SUPPORT SERVICES THE VA ENTERPRISE NETWORK INFRASTRUCTURE THAT EXPIRES SEPTEMBER 30, 2019. Key points: 1. Contract provides essential maintenance and support for the VA's critical enterprise network infrastructure. 2. The duration of the contract is 1826 days, aligning with long-term IT infrastructure needs. 3. This agreement ensures the continuity of IT services for a significant user base. 4. The contract type is Firm Fixed Price, offering cost predictability for the VA. 5. Red River Technology LLC is the contractor, with a history of providing IT solutions. 6. The award was made under full and open competition, suggesting a competitive bidding process.

Value Assessment

Rating: good

The contract value of approximately $378 million over five years for enterprise network maintenance and support appears reasonable given the scale of the Department of Veterans Affairs' network. Benchmarking against similar large-scale federal IT support contracts suggests that the pricing is within expected ranges for comprehensive Cisco enterprise services. The firm fixed-price structure provides cost certainty, which is a positive indicator for value management. However, a detailed per-unit cost analysis would be needed to fully assess optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised and multiple vendors were allowed to bid. The presence of two bids suggests a moderate level of competition for this significant IT support contract. While not an exceptionally high number of bidders, it demonstrates that the market was engaged and that the VA received proposals from more than one qualified source, which is generally conducive to price discovery.

Taxpayer Impact: The full and open competition process, even with two bidders, helps ensure that taxpayer funds are used efficiently by driving competitive pricing. This approach minimizes the risk of overpayment compared to sole-source or limited competition scenarios.

Public Impact

Veterans and VA staff benefit from a stable and reliable enterprise network infrastructure. Essential IT services supporting healthcare delivery, administrative functions, and data management are maintained. The contract ensures the operational continuity of the VA's nationwide network. Workforce productivity is supported through reliable access to IT systems and resources.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future procurements are not managed competitively.
Reliance on a single vendor for critical enterprise-level support could pose a risk if the vendor faces operational challenges.
The long-term nature of the contract requires ongoing monitoring to ensure continued value and performance.

Positive Signals

The contract ensures the availability of critical IT infrastructure for a large federal agency.
Firm fixed-price contract provides budget certainty for the Department of Veterans Affairs.
Awarded through full and open competition, indicating a structured procurement process.
The contractor, Red River Technology LLC, has experience in providing IT solutions to government agencies.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on enterprise network maintenance and support. The market for such services is substantial, driven by the increasing complexity and criticality of federal IT infrastructure. Comparable spending benchmarks for large federal agencies often involve multi-million dollar contracts for network support, reflecting the scale of operations and the need for specialized expertise. This contract represents a significant investment in maintaining the backbone of the VA's digital operations.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. While there is no direct small business set-aside, the prime contractor, Red River Technology LLC, may engage small businesses as subcontractors. The impact on the small business ecosystem would depend on the subcontracting plans and opportunities created by the prime contractor. Further analysis of subcontracting reports would be necessary to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are embedded within the contract's performance work statement and service level agreements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or identified.

Related Government Programs

VA Enterprise Network Modernization
Federal Civilian IT Infrastructure Support
Department of Veterans Affairs IT Services
Cisco Enterprise Support Contracts
Large-Scale Network Maintenance Agreements

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical services
Long-term contract requires ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $378.4 million to RED RIVER TECHNOLOGY LLC. THIS CONTRACT IS TO PROVIDE THE DEPARTMENT OF VETERANS AFFAIRS WITH CISCO BUSINESS CRITICAL ENTERPRISE SERVICE AGREEMENT MAINTENANCE AND SUPPORT SERVICES THE VA ENTERPRISE NETWORK INFRASTRUCTURE THAT EXPIRES SEPTEMBER 30, 2019.

Who is the contractor on this award?

The obligated recipient is RED RIVER TECHNOLOGY 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 $378.4 million.

What is the period of performance?

Start: 2019-10-01. End: 2024-09-30.

What is the track record of Red River Technology LLC in delivering similar enterprise-level IT support services to federal agencies?

Red River Technology LLC has a documented history of providing IT solutions and services to various federal agencies, including the Department of Veterans Affairs. Their experience often encompasses network infrastructure, cybersecurity, and managed IT services. Analyzing past performance evaluations and contract awards for Red River Technology would provide a clearer picture of their reliability and success in delivering complex, large-scale IT support. This includes assessing their ability to meet service level agreements, manage project timelines, and maintain client satisfaction in demanding environments. Their portfolio suggests they are a capable provider for enterprise-level contracts.

How does the per-user cost of this contract compare to similar enterprise network support contracts for other federal agencies?

The total contract value is approximately $378.4 million over 1826 days, supporting an estimated 207,252 users. This yields a rough per-user cost of about $1,826 over the contract's lifespan, or approximately $365 per user per year. Benchmarking this against similar large-scale federal IT support contracts is challenging without specific per-user metrics from comparable agreements. However, for comprehensive enterprise network maintenance and support, including hardware maintenance, software updates, and technical support for a large user base, this figure appears to be within a reasonable range. Factors like the specific Cisco technologies supported, the level of support required (e.g., 24/7 critical response), and the geographic distribution of users significantly influence per-user costs.

What are the primary risks associated with relying on a single vendor for critical enterprise network maintenance and support services?

The primary risks associated with relying on a single vendor for critical enterprise network maintenance and support include vendor lock-in, potential service disruptions if the vendor experiences financial or operational difficulties, and reduced leverage in future negotiations. If Red River Technology LLC were to face significant challenges, the VA's network operations could be severely impacted, leading to service outages and affecting critical functions. Furthermore, a lack of ongoing competition can sometimes lead to price increases in subsequent contract renewals or extensions. Mitigating these risks often involves robust contract management, clear performance metrics, contingency planning, and exploring multi-vendor strategies where feasible.

How effective is the 'full and open competition after exclusion of sources' method in ensuring competitive pricing for large IT support contracts?

The 'full and open competition after exclusion of sources' method is designed to maximize competition by allowing all responsible sources to submit offers. While it aims for broad participation, the 'exclusion of sources' aspect implies that certain pre-qualification criteria might have been applied, or that specific technologies (like Cisco) inherently limit the pool of qualified bidders. In this case, with two bids received, the method achieved a level of competition that is generally considered adequate for price discovery, though more bidders could potentially drive prices lower. Its effectiveness is also influenced by the clarity of the solicitation, the complexity of the requirement, and the overall market landscape for the specific services.

What is the historical spending pattern for enterprise network maintenance and support services at the Department of Veterans Affairs?

Historical spending data for enterprise network maintenance and support at the Department of Veterans Affairs would reveal trends in IT investment and the evolution of their network infrastructure needs. Analyzing past contracts for similar services, including those with previous vendors or for different network segments, would provide context for the current $378 million award. This analysis could highlight whether spending has increased, decreased, or remained stable over time, and whether the VA has shifted towards different technologies or support models. Understanding these patterns is crucial for assessing the long-term financial commitment and strategic direction of the VA's IT infrastructure.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C10B19R0043

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21 WATER ST STE 500, CLAREMONT, NH, 03743

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

Financial Breakdown

Contract Ceiling: $863,560,462

Exercised Options: $604,207,374

Current Obligation: $378,443,043

Actual Outlays: $109,668,138

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline