VA awards $35.6M for ECMS/AAMS maintenance and SaaS transition, with a 1276-day duration

Contract Overview

Contract Amount: $35,630,595 ($35.6M)

Contractor: Distributed Solutions, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-03

End Date: 2026-09-30

Contract Duration: 1,276 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ELECTRONIC CONTRACT MANAGEMENT SYSTEM?S (ECMS) AUTOMATED ACQUISITION MANAGEMENT SOLUTION (AAMS) ANNUAL MAINTENANCE, CUSTOMIZATION AND TRANSITION TO A SOFTWARE-AS-A-SERVICE (SAAS) MANAGED SERVICE SUBSCRIPTION.

Place of Performance

Location: EATONTOWN, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $35.6 million to DISTRIBUTED SOLUTIONS, INC for work described as: ELECTRONIC CONTRACT MANAGEMENT SYSTEM?S (ECMS) AUTOMATED ACQUISITION MANAGEMENT SOLUTION (AAMS) ANNUAL MAINTENANCE, CUSTOMIZATION AND TRANSITION TO A SOFTWARE-AS-A-SERVICE (SAAS) MANAGED SERVICE SUBSCRIPTION. Key points: 1. The contract focuses on essential maintenance and a strategic shift to a SaaS model for critical acquisition management software. 2. Annual costs appear to align with typical software maintenance and subscription services for enterprise-level solutions. 3. The firm-fixed-price structure provides cost certainty for the government over the contract's lifespan. 4. This award represents a significant investment in modernizing the VA's procurement infrastructure. 5. The transition to SaaS aims to improve scalability, security, and reduce the long-term operational burden. 6. Performance is tied to the successful delivery of ongoing support and the transition to the new service model.

Value Assessment

Rating: good

The total award of $35.6 million over approximately 4.25 years (1276 days) suggests an average annual cost of roughly $8.38 million. This figure is within a reasonable range for enterprise-level software maintenance, customization, and managed service subscriptions, especially considering the complexity of acquisition management systems. Benchmarking against similar large-scale government IT service contracts indicates that this pricing is competitive, assuming the scope of services includes comprehensive support, updates, and the significant transition effort to a SaaS model.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, encouraging vendors to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the full and open nature suggests a robust competition that likely contributed to achieving a fair market price for the services rendered.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the most advantageous offer available.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, gaining enhanced capabilities for its acquisition processes. The contract ensures the continued operation and modernization of the Electronic Contract Management System (ECMS) and Automated Acquisition Management Solution (AAMS). This supports the VA's mission to provide timely and efficient services to veterans by streamlining procurement. The transition to a Software-as-a-Service (SaaS) model is expected to improve system accessibility and reduce IT infrastructure management overhead for the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the SaaS transition is not managed with exit strategies in mind.
Risk of cost overruns if unforeseen customization needs arise during the SaaS transition.
Dependence on Distributed Solutions, Inc. for critical acquisition system functionality.
Ensuring data security and integrity during the migration to a managed service subscription.

Positive Signals

Awarding under full and open competition suggests a competitive pricing environment.
The firm-fixed-price contract provides budget certainty for the VA.
The transition to SaaS indicates a forward-looking approach to IT modernization.
The long-term duration (1276 days) allows for stable support and a phased transition.
Focus on maintenance and customization ensures continued operational effectiveness of existing systems.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software maintenance, customization, and cloud migration (SaaS). The market for enterprise resource planning (ERP) and contract management software is substantial within the federal government, with agencies increasingly moving towards managed services and cloud-based solutions to improve efficiency and reduce infrastructure costs. The VA's investment in its ECMS/AAMS aligns with this trend, aiming to leverage modern technology for critical administrative functions. Comparable spending benchmarks for similar large-scale government IT modernization and managed service contracts would typically range from millions to tens of millions annually, depending on the scope and complexity.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as the 'sb' field is false. This suggests the primary award was made to a large business or that the competition structure did not prioritize small business set-asides for this specific requirement. However, the prime contractor, Distributed Solutions, Inc., may engage small businesses as subcontractors to fulfill certain aspects of the contract, particularly for specialized services or components. The impact on the small business ecosystem would depend on the extent of any subcontracting opportunities offered.

Oversight & Accountability

Oversight for this contract will 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 managing the overall relationship with Distributed Solutions, Inc. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are recorded. While no specific Inspector General (IG) jurisdiction is mentioned for this particular award, the VA Office of Inspector General (OIG) has broad authority to investigate waste, fraud, and abuse within VA programs and contracts.

Related Government Programs

VA IT Modernization Programs
Federal Enterprise Software Contracts
Government Cloud Computing Initiatives
Acquisition Management Systems
SaaS Subscription Services

Risk Flags

Potential for scope creep during SaaS transition.
Data security and privacy during migration.
Vendor performance and reliability.
Integration with existing VA IT infrastructure.
Long-term cost-effectiveness of SaaS model.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $35.6 million to DISTRIBUTED SOLUTIONS, INC. ELECTRONIC CONTRACT MANAGEMENT SYSTEM?S (ECMS) AUTOMATED ACQUISITION MANAGEMENT SOLUTION (AAMS) ANNUAL MAINTENANCE, CUSTOMIZATION AND TRANSITION TO A SOFTWARE-AS-A-SERVICE (SAAS) MANAGED SERVICE SUBSCRIPTION.

Who is the contractor on this award?

The obligated recipient is DISTRIBUTED SOLUTIONS, 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 $35.6 million.

What is the period of performance?

Start: 2023-04-03. End: 2026-09-30.

What is the track record of Distributed Solutions, Inc. in delivering similar IT services to the federal government, particularly for large-scale systems like the VA's ECMS/AAMS?

Distributed Solutions, Inc. (DSI) has a history of providing IT services to various federal agencies. While specific details on their performance with systems as critical and complex as the VA's ECMS/AAMS are not fully detailed in this award data, their portfolio often includes software development, modernization, and managed services. A deeper dive into their past performance evaluations, contract history (including any past performance questionnaires or CPARS reports), and experience with similar government-wide or agency-specific acquisition systems would be necessary to fully assess their suitability and reliability for this particular contract. Their ability to successfully manage the transition to a SaaS model, as required here, would be a key area of focus.

How does the annual cost of this contract compare to industry benchmarks for similar enterprise-level acquisition management software maintenance and SaaS transitions?

The approximate annual cost of $8.38 million ($35.6M / 4.25 years) for maintaining, customizing, and transitioning the VA's ECMS/AAMS to a SaaS model appears competitive within the federal IT services market. Large-scale enterprise software solutions, especially those requiring ongoing support, significant customization, and a shift to a managed service model, often incur annual costs in the millions. Factors influencing this benchmark include the complexity of the system, the number of users, the criticality of the function (acquisition management is vital), and the scope of services (maintenance, updates, security, transition). Without specific details on the number of users or the exact scope of customization, a precise comparison is difficult, but the figure is not an outlier for such a comprehensive IT service contract within a major federal agency.

What are the primary risks associated with transitioning a critical system like ECMS/AAMS to a SaaS model, and how are they mitigated in this contract?

Key risks in transitioning to SaaS include data security and integrity during migration, potential vendor lock-in, integration challenges with other agency systems, ensuring service availability and performance, and managing change within the user base. This contract aims to mitigate these risks through a firm-fixed-price structure, which incentivizes the contractor to manage costs effectively. The long duration (1276 days) allows for a phased transition, potentially reducing disruption. Specific contract clauses related to data security standards (e.g., FedRAMP compliance for SaaS), service level agreements (SLAs) for uptime and performance, and clear transition-out provisions would be crucial for further risk mitigation. The VA's oversight will be critical in monitoring these aspects throughout the contract lifecycle.

What is the expected impact of this contract on the VA's overall IT infrastructure and operational efficiency in managing federal contracts?

This contract is expected to have a significant positive impact on the VA's IT infrastructure and operational efficiency. By transitioning the ECMS/AAMS to a SaaS managed service, the VA can reduce its direct burden of maintaining on-premises hardware and software, potentially lowering infrastructure costs and freeing up internal IT resources for other strategic initiatives. The SaaS model typically offers greater scalability, easier updates, and enhanced accessibility. This modernization should streamline the acquisition process, improve data management, enhance reporting capabilities, and ultimately enable the VA to procure goods and services more efficiently, supporting its core mission delivery.

How does this contract fit into the VA's broader strategy for modernizing its IT systems and procurement processes?

This contract is a key component of the VA's broader strategy to modernize its IT systems and procurement processes. Agencies like the VA are increasingly adopting cloud-first and SaaS strategies to leverage the benefits of modern technology, including scalability, flexibility, and reduced operational overhead. By investing in the maintenance and transition of its ECMS/AAMS to a SaaS model, the VA is demonstrating a commitment to updating its core administrative functions. This aligns with government-wide initiatives to improve IT efficiency, enhance cybersecurity, and ensure that agencies have the tools necessary to operate effectively and deliver services to their constituents.

What are the implications of the 'Other Computer Related Services' NAICS code (541519) for the scope of work and potential vendor capabilities?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not classified elsewhere. For this contract, it signifies that the scope of work extends beyond standard software development or maintenance to include potentially diverse activities such as IT consulting, system integration, data processing, disaster recovery services, and IT support. This broad classification allows the VA flexibility in defining requirements but also necessitates careful contract management to ensure the contractor delivers precisely the intended services. It suggests that Distributed Solutions, Inc. may be providing a comprehensive suite of services tailored to the VA's specific needs for its acquisition management systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1899 PRESTON WHITE DR, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $117,996,339

Exercised Options: $60,179,133

Current Obligation: $35,630,595

Actual Outlays: $24,506,386

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA18D0095

IDV Type: FSS

Timeline