VA awards $42M IT contract for computer systems design to SIERRA7, INC

Contract Overview

Contract Amount: $42,015,179 ($42.0M)

Contractor: Sierra7, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-28

End Date: 2026-09-27

Contract Duration: 1,825 days

Daily Burn Rate: $23.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DDAL BASE YEAR

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20002

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $42.0 million to SIERRA7, INC. for work described as: DDAL BASE YEAR Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract duration of five years (1825 days) provides long-term service stability. 4. The award was a delivery order, implying it's part of a larger contract vehicle. 5. The North American Industry Classification System (NAICS) code 541512 points to a focus on computer systems design. 6. The contractor, SIERRA7, INC., is a key player in this service area for the VA. 7. The contract is not set aside for small businesses, suggesting larger prime contractors are involved.

Value Assessment

Rating: good

The base year value of approximately $42 million for computer systems design services appears reasonable given the five-year duration and the nature of IT support contracts. Benchmarking against similar contracts for IT systems design within the Department of Veterans Affairs would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs for the government. Without specific performance metrics or detailed cost breakdowns, a definitive assessment of cost efficiency is challenging, but the competitive award process offers some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of four bids indicates a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive offers. The specific number of bidders (4) suggests that while there was competition, it may not have been extensive, potentially limiting the downward pressure on pricing compared to a scenario with many more bidders.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the pool of potential offerors, fostering a competitive environment that typically leads to lower prices and better quality services.

Public Impact

Veterans will benefit from improved IT systems and support, enhancing their access to VA services. The contract delivers essential computer systems design and related services to the Department of Veterans Affairs. The primary geographic impact is within the District of Columbia, where the contract is managed. The contract supports IT professionals and potentially other roles within SIERRA7, INC., contributing to the tech workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the contractor's systems become deeply integrated.
Reliance on a single contractor for critical IT systems design could pose risks if performance falters.
The long contract duration might reduce flexibility to adopt newer technologies if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent process.
Firm-fixed-price contract type provides cost certainty for the government.
The contractor, SIERRA7, INC., likely has a track record with the VA for similar services.
The contract duration ensures continuity of essential IT services for the VA.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. This contract falls within the broader IT services market, which is characterized by rapid technological advancements and a constant need for system upgrades and maintenance. The Department of Veterans Affairs is a major consumer of IT services, aiming to modernize its infrastructure to better serve veterans. Comparable spending benchmarks would involve looking at other large-scale IT design and integration contracts awarded by federal agencies.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the prime contractor, SIERRA7, INC., is likely a larger entity capable of handling the full scope of the contract. There are no explicit subcontracting implications mentioned in the provided data, but larger contracts often involve subcontracting opportunities. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were limited.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

IT Systems Modernization Programs
Veterans Health Administration IT Support
Department of Veterans Affairs Enterprise Architecture
Federal Civilian IT Services Contracts

Risk Flags

Long contract duration may lead to technological obsolescence.
Reliance on a single contractor for critical IT design services.
Potential for scope creep if requirements are not clearly defined and managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $42.0 million to SIERRA7, INC.. DDAL BASE YEAR

Who is the contractor on this award?

The obligated recipient is SIERRA7, INC..

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 $42.0 million.

What is the period of performance?

Start: 2021-09-28. End: 2026-09-27.

What is SIERRA7, INC.'s past performance record with the Department of Veterans Affairs and other federal agencies, particularly for similar computer systems design services?

Assessing SIERRA7, INC.'s past performance is crucial for understanding their reliability and capability. While the provided data indicates this is a delivery order awarded to SIERRA7, INC. by the VA, it doesn't detail their specific performance history. A thorough review would involve examining past contract performance evaluations (e.g., CPARS reports) for this contractor on similar IT services contracts. Agencies typically look for a history of meeting deadlines, staying within budget, delivering quality work, and demonstrating effective communication. A strong past performance record with the VA suggests a lower risk for this current contract, while a history of issues might raise concerns about potential performance problems, cost overruns, or schedule delays.

How does the awarded price of approximately $42 million over five years compare to market rates for similar computer systems design services?

The awarded value of roughly $42 million over five years, averaging about $8.4 million annually, needs to be benchmarked against market rates for comparable computer systems design services. This comparison should consider the scope of work, the level of expertise required, the geographic location (District of Columbia), and the specific technologies involved. Federal agencies often use independent government cost estimates (IGCEs) and market research to establish fair and reasonable pricing. Analyzing data from similar contracts awarded by other federal agencies or commercial entities, adjusted for relevant factors, can help determine if this contract represents good value for money. A price significantly above market rates could indicate potential overpayment, while a price well below might raise concerns about the quality or completeness of the services to be delivered.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how will they be monitored?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for a computer systems design services contract of this magnitude and duration, KPIs and SLAs are essential for ensuring the contractor meets performance expectations. These might include metrics related to system uptime, response times for design modifications, project completion rates, adherence to security protocols, and user satisfaction. The Department of Veterans Affairs' contracting officer's representative (COR) and program managers are typically responsible for monitoring these metrics, reviewing contractor reports, and conducting regular performance reviews. The effectiveness of oversight and the clarity of these performance standards directly impact the contract's success and value realization.

What is the historical spending pattern of the VA on computer systems design services, and how does this award fit into that trend?

Understanding the VA's historical spending on computer systems design services provides context for this $42 million award. Federal agencies like the VA often have multi-year IT modernization strategies, leading to consistent or increasing investments in areas like systems design. Analyzing past VA budgets and contract awards for NAICS code 541512 (Computer Systems Design Services) would reveal trends. If VA spending in this area has been steadily increasing, this award aligns with that trend. Conversely, if spending has been declining, this award might represent a strategic shift or a consolidation of services. This specific award represents a significant, but potentially typical, investment for a five-year IT systems design requirement within a large agency like the VA.

What are the potential risks associated with the five-year duration of this contract, and what mitigation strategies are in place?

A five-year duration for an IT contract presents several potential risks, including technological obsolescence, changes in agency requirements, and contractor performance degradation over time. Technology evolves rapidly, and systems designed today might be outdated before the contract ends. Agency needs can also shift due to policy changes or evolving operational demands. Contractor performance can fluctuate. Mitigation strategies typically include robust contract management, regular performance reviews, incorporating flexibility clauses for requirement changes, and potentially incentivizing innovation. The VA's oversight mechanisms, including CORs and performance monitoring, are critical for identifying and addressing these risks proactively throughout the contract's life.

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 › IT AND TELECOM - SECURITY AND COMPLIANCE

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: 11951 FREEDOM DR STE 1300, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, 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: $51,469,934

Exercised Options: $42,015,179

Current Obligation: $42,015,179

Actual Outlays: $24,350,918

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1014

IDV Type: IDC

Timeline