VA awards $180M for IT services, with 2 bidders competing for this delivery order

Contract Overview

Contract Amount: $179,875,532 ($179.9M)

Contractor: Govcio, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-08-13

End Date: 2024-08-12

Contract Duration: 1,460 days

Daily Burn Rate: $123.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TECHNOLOGY INCUBATION SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $179.9 million to GOVCIO, LLC for work described as: TECHNOLOGY INCUBATION SERVICES Key points: 1. Value for money appears fair given the market for IT services, but detailed benchmarking is needed. 2. Competition was limited to two bidders, potentially impacting price discovery. 3. Risk indicators are moderate, with a long contract duration and time-and-materials pricing. 4. Performance context is within IT systems design, a critical area for agency operations. 5. Sector positioning is within government IT services, a large and competitive market.

Value Assessment

Rating: fair

The contract value of approximately $180 million over four years for IT services is substantial. Benchmarking against similar contracts for computer systems design services is crucial to assess value. The time-and-materials pricing structure can lead to cost overruns if not managed tightly, suggesting a need for robust oversight to ensure fair pricing and prevent excessive spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but only two bidders submitted proposals. While competition existed, the limited number of bidders may have restricted the range of pricing and innovative solutions presented. Further analysis would be needed to understand why more vendors did not participate.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable through broader market engagement.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, receiving essential IT services. Services delivered include computer systems design, crucial for maintaining and improving VA's technological infrastructure. The geographic impact is primarily within the District of Columbia, where the contractor is located. Workforce implications may include employment opportunities for IT professionals supporting the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and materials pricing can lead to cost uncertainty and potential overruns.
Limited competition (2 bidders) may result in suboptimal pricing.
Long contract duration (4 years) increases exposure to changing technology and market conditions.
The specific nature of 'Technology Incubation Services' requires clear performance metrics to ensure value.

Positive Signals

Awarded under full and open competition, indicating an initial broad outreach.
Contract supports critical IT infrastructure for the Department of Veterans Affairs.
Contractor has a track record of performing government contracts.

Sector Analysis

The IT services sector, particularly within government, is a significant market. This contract for computer systems design services falls under a broad category encompassing software development, system integration, and IT consulting. Comparable spending benchmarks for similar IT support contracts within federal agencies can range widely based on scope and complexity, but $180 million over four years suggests a substantial, ongoing requirement.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have a small business subcontracting plan noted. This suggests that larger businesses were the primary focus or participants in this competition. The impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reviews are often internal. Inspector General jurisdiction would apply if fraud, waste, or abuse is suspected.

Related Government Programs

IT Professional Services
Computer Systems Design Services
Cloud Computing Services
Software Development Services
IT Consulting Services

Risk Flags

Limited Competition
Time and Materials Pricing
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $179.9 million to GOVCIO, LLC. TECHNOLOGY INCUBATION SERVICES

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 $179.9 million.

What is the period of performance?

Start: 2020-08-13. End: 2024-08-12.

What is the contractor's track record with the VA and other federal agencies?

GOVCIO, LLC has a history of performing government contracts, including work with the Department of Veterans Affairs. Analyzing their past performance ratings, contract history, and any reported issues or awards provides insight into their reliability and capability. A review of their portfolio would reveal the types and scale of previous projects, helping to contextualize their ability to manage a contract of this magnitude and complexity. Specific details on past performance metrics and client feedback would further inform an assessment of their suitability for this technology incubation services contract.

How does the awarded price compare to market rates for similar IT services?

Benchmarking the $180 million contract value against market rates for 'Computer Systems Design Services' requires detailed analysis of the specific services rendered. Factors such as labor categories, geographic location (District of Columbia), and the complexity of 'Technology Incubation Services' influence pricing. Comparing the average hourly rates or total contract value to industry benchmarks for similar government contracts, adjusted for scope and duration, is essential. Without specific service details, a precise comparison is difficult, but the overall value suggests a significant IT support requirement.

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

Key risks include potential cost overruns due to the time-and-materials (T&M) pricing structure, which lacks a fixed ceiling for labor. Scope creep is another risk, especially with 'Technology Incubation Services' which can be ill-defined. The limited competition (two bidders) also poses a risk of suboptimal pricing. Mitigation strategies likely involve stringent oversight of T&M hours, clear definition and management of the statement of work, regular performance reviews, and potentially incorporating cost-control incentives or fixed-price components for specific deliverables.

How effective has the VA been in managing similar IT service contracts?

The VA's effectiveness in managing IT service contracts can be assessed by reviewing past contract performance data, including contract close-outs, modifications, and any reported disputes or overruns. Analyzing the VA's internal processes for vendor management, performance monitoring, and contract administration provides insight. Examining the success rates of previous IT procurements and the overall satisfaction levels reported by program managers can indicate the agency's proficiency. Trends in contract modifications and task order values may also reveal patterns in contract management.

What is the historical spending trend for 'Technology Incubation Services' or similar IT support at the VA?

Analyzing historical spending data for 'Technology Incubation Services' and related IT support categories within the VA is crucial. This involves examining spending patterns over the past 5-10 years to identify trends in contract values, award volumes, and the types of services procured. Understanding whether spending has increased, decreased, or remained stable provides context for the current $180 million award. Identifying major shifts in technology focus or procurement strategies within the VA would also be relevant.

What is the potential impact of the limited competition on the quality of services received?

Limited competition, with only two bidders, can potentially impact service quality. While both bidders are presumably qualified, the lack of broader engagement might mean that the VA did not see the full spectrum of innovative solutions or the most cost-effective approaches available in the market. This could lead to accepting a 'good enough' solution rather than the 'best possible' one. However, if the two bidders were highly capable and the selection process was rigorous, quality could still be high. The key is whether the competition spurred sufficient differentiation in technical approach and performance guarantees.

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: 2

Pricing Type: TIME AND MATERIALS (Y)

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: $180,162,381

Exercised Options: $180,162,381

Current Obligation: $179,875,532

Actual Outlays: $78,374,431

Subaward Activity

Number of Subawards: 106

Total Subaward Amount: $162,774,627

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1003

IDV Type: IDC

Timeline