GSA awards $34.6M IT modernization contract to Octo Consulting Group, highlighting strong competition

Contract Overview

Contract Amount: $34,603,995 ($34.6M)

Contractor: Octo Consulting Group LLC

Awarding Agency: General Services Administration

Start Date: 2020-10-20

End Date: 2026-04-19

Contract Duration: 2,007 days

Daily Burn Rate: $17.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: LABOR HOURS

Sector: IT

Official Description: FSS-19 SYSTEMS MODERNIZATION CONTRACT AWARD

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $34.6 million to OCTO CONSULTING GROUP LLC for work described as: FSS-19 SYSTEMS MODERNIZATION CONTRACT AWARD Key points: 1. The contract leverages a Best Practices Acquisition (BPA) Call, indicating a pre-competed framework for efficient procurement. 2. Computer Systems Design Services are critical for modernizing federal IT infrastructure, suggesting a focus on essential government functions. 3. The award to Octo Consulting Group, a known IT services provider, suggests a focus on established capabilities. 4. The contract duration of over 6 years points to a long-term need for these modernization services. 5. The use of Labor Hours pricing allows for flexibility in adapting to evolving project requirements. 6. The contract is not set aside for small businesses, implying a focus on larger, established prime contractors.

Value Assessment

Rating: good

The contract value of $34.6 million over approximately six years suggests a moderate annual spend for IT modernization services. Benchmarking this against similar large-scale IT modernization efforts within the federal government would provide a clearer picture of value for money. The use of Labor Hours pricing can be efficient if managed well, but requires careful oversight to prevent cost overruns. Without specific performance metrics or comparison to industry benchmarks for similar services, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. This approach generally fosters a competitive environment, driving better pricing and innovation. The presence of 8 bidders (implied by 'no': 8) suggests a healthy level of interest and competition for this type of IT modernization work.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, maximizing the value of federal spending.

Public Impact

Federal agencies requiring IT systems modernization will benefit from improved infrastructure and services. The contract supports the delivery of computer systems design services, crucial for enhancing government operational efficiency. The primary geographic impact is within the District of Columbia, where the General Services Administration (GSA) is headquartered. The contract likely supports a workforce of skilled IT professionals, contributing to the federal IT talent pool.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Labor Hours pricing can lead to cost overruns if not meticulously managed and monitored.
The long contract duration may present challenges in adapting to rapidly evolving technological landscapes.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance trajectory.
The absence of small business set-asides might limit opportunities for smaller, specialized firms in this modernization effort.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process and competitive pricing.
The contract is with Octo Consulting Group, a company with a demonstrated track record in federal IT services.
The BPA Call mechanism indicates that the underlying framework was already competitively vetted, streamlining the award process.
The focus on IT modernization aligns with government-wide initiatives to improve digital services and cybersecurity.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT market is substantial, with agencies consistently investing in modernization to maintain security, efficiency, and citizen-facing capabilities. This award represents a portion of that ongoing investment, likely contributing to GSA's broader mission of providing efficient and effective government operations through technology.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. This means the competition was open to all responsible sources, including large businesses. While this ensures broad competition, it may limit direct subcontracting opportunities for small businesses unless Octo Consulting Group voluntarily includes them in their subcontracting plan. The absence of a set-aside suggests the scope or nature of the services may have been deemed more suitable for larger prime contractors.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its contracts, including program management reviews and financial accountability measures. The Federal Acquisition Service (FAS) within GSA is responsible for managing many of these procurements. Transparency is generally maintained through contract award databases like FPDS. Inspector General oversight would apply if any issues of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

IT Modernization Programs
Cloud Computing Services
Cybersecurity Enhancements
Digital Government Initiatives
Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for cost overruns due to Labor Hours pricing
Risk of technological obsolescence over the long contract duration
Need for strong contract oversight to ensure performance and value
Limited visibility into specific performance metrics from award data

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $34.6 million to OCTO CONSULTING GROUP LLC. FSS-19 SYSTEMS MODERNIZATION CONTRACT AWARD

Who is the contractor on this award?

The obligated recipient is OCTO CONSULTING GROUP LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $34.6 million.

What is the period of performance?

Start: 2020-10-20. End: 2026-04-19.

What is Octo Consulting Group's track record with the General Services Administration and similar IT modernization contracts?

Octo Consulting Group LLC has a significant presence in the federal IT contracting space, particularly with agencies like GSA. Their experience often includes areas such as cloud migration, cybersecurity, data analytics, and application modernization. Examining their past performance on similar contracts, especially those awarded by GSA or other civilian agencies, would reveal their ability to deliver complex IT solutions on time and within budget. Data from contract databases often shows a history of successful task order completions under larger IDIQs or BPAs, indicating a capacity to manage government IT projects. However, a deeper dive into specific performance evaluations and any past performance issues would be necessary for a comprehensive assessment.

How does the $34.6 million value compare to other federal IT modernization contracts of similar scope and duration?

The $34.6 million value for a six-year IT modernization contract represents a moderate investment. Annualized, this contract is worth approximately $5.77 million per year. This figure needs to be benchmarked against the broader federal IT landscape. Large-scale IT modernization efforts, especially those involving enterprise-wide system replacements or major cloud migrations, can range from tens of millions to billions of dollars. Contracts for specific system design services, like this one, often fall within this mid-tier range. Factors such as the complexity of the systems being modernized, the number of users impacted, and the specific services required (e.g., custom development vs. COTS integration) heavily influence cost. Without more granular details on the modernization scope, direct comparison is limited, but it appears to be a standard-sized award for its category.

What are the primary risks associated with a 'Labor Hours' contract type for IT modernization?

The primary risk with a 'Labor Hours' contract type for IT modernization is the potential for cost overruns if not managed diligently. Unlike fixed-price contracts, the government pays for the actual hours worked by contractor personnel at pre-negotiated rates. This can lead to increased costs if projects take longer than anticipated, if productivity is lower than expected, or if scope creep occurs without proper change control. Effective oversight, including detailed timesheet verification, regular progress reviews, and robust performance metrics, is crucial to mitigate these risks. Additionally, ensuring that the labor categories and rates are appropriate for the tasks being performed is vital for maintaining cost control and achieving value for money.

How effective is 'full and open competition' in ensuring value for money for IT services like computer systems design?

Full and open competition is generally considered the most effective method for ensuring value for money in federal IT services. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, fostering a highly competitive environment. This competition typically drives down prices, encourages innovation, and leads to the selection of contractors offering the best combination of technical merit and cost. When multiple bidders vie for a contract, they are incentivized to propose their most competitive solutions and pricing strategies. The presence of 8 bidders in this specific BPA Call award suggests a robust competition, which should translate into better value for the GSA and, by extension, the taxpayer.

What are the implications of this contract's duration (over 6 years) on technological relevance and adaptability?

A contract duration exceeding six years for IT modernization presents both opportunities and risks regarding technological relevance and adaptability. On the positive side, it provides stability and allows the contractor to deeply understand and integrate with the agency's evolving needs, potentially leading to more tailored and effective solutions over the long term. However, the rapid pace of technological change in the IT sector means that solutions designed today might be outdated or less efficient by the end of the contract period. This necessitates built-in flexibility, mechanisms for incorporating new technologies, and potentially periodic reviews or re-competitions to ensure the government is leveraging the most current and effective tools. The Labor Hours pricing model offers some flexibility, but proactive management is key.

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: 8

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 10780 PARKRIDGE BLVD FL 4, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,706,108

Exercised Options: $38,706,108

Current Obligation: $34,603,995

Actual Outlays: $16,097,597

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QDCB19A0007

IDV Type: BPA

Timeline