CDC awards $8.1M cloud compute contract to SMARTRONIX, LLC for IT services

Contract Overview

Contract Amount: $8,078,041 ($8.1M)

Contractor: Smartronix, LLC

Awarding Agency: General Services Administration

Start Date: 2024-03-01

End Date: 2026-02-28

Contract Duration: 729 days

Daily Burn Rate: $11.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CDC AWS CLOUD COMPUTE AND CAPACITY

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

General Services Administration obligated $8.1 million to SMARTRONIX, LLC for work described as: CDC AWS CLOUD COMPUTE AND CAPACITY Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for computer systems design services, indicating a focus on IT infrastructure. 3. SMARTRONIX, LLC, the awardee, has secured this delivery order under a larger GSA schedule. 4. The contract duration is 729 days, providing a medium-term engagement for cloud services. 5. The firm-fixed-price contract type aims to control costs for the government. 6. This award represents a portion of the CDC's broader IT spending on cloud solutions.

Value Assessment

Rating: good

The contract value of $8.1 million for cloud compute and capacity services appears reasonable given the scope and duration. Benchmarking against similar GSA Schedule awards for cloud services suggests competitive pricing. The firm-fixed-price structure provides cost certainty for the CDC. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific delivery order. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair market price is achieved.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible value by allowing all qualified vendors to compete, rather than restricting the field.

Public Impact

The Centers for Disease Control and Prevention (CDC) will benefit from enhanced cloud computing capabilities. Services delivered will support critical IT infrastructure for data storage, processing, and analysis. The geographic impact is primarily national, supporting CDC operations across the United States. This contract supports the IT workforce involved in cloud management and system design.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are not carefully managed.
Reliance on a single vendor for critical cloud infrastructure could pose risks.
Ensuring ongoing cost optimization within the cloud environment will be crucial.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm-fixed-price contract type provides cost predictability.
Leveraging GSA Schedules can streamline procurement and potentially reduce administrative burden.

Sector Analysis

The cloud computing market is a rapidly growing sector within the IT industry, with government agencies increasingly migrating services to cloud platforms for scalability, flexibility, and cost-efficiency. This contract fits within the broader trend of federal agencies adopting cloud solutions to modernize their IT infrastructure and improve service delivery. Comparable spending benchmarks for cloud services vary widely based on scope, but agencies often allocate significant budgets to these solutions.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, SMARTRONIX, LLC, is not identified as a small business in the provided data. There is no explicit information regarding subcontracting plans for small businesses. Therefore, this specific award does not appear to directly benefit the small business ecosystem through set-asides or mandated subcontracting.

Oversight & Accountability

Oversight for this contract will likely be managed by the General Services Administration (GSA) and the contracting officers within the CDC. The firm-fixed-price nature of the contract provides a degree of financial oversight. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

CDC IT Modernization Initiatives
GSA Cloud Computing Services
Federal Data Center Consolidation Initiative
Public Health Informatics

Risk Flags

Potential for cost increases if usage exceeds projections.
Dependency on contractor performance for critical IT services.
Data security and compliance risks in a cloud environment.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $8.1 million to SMARTRONIX, LLC. CDC AWS CLOUD COMPUTE AND CAPACITY

Who is the contractor on this award?

The obligated recipient is SMARTRONIX, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $8.1 million.

What is the period of performance?

Start: 2024-03-01. End: 2026-02-28.

What is SMARTRONIX, LLC's track record with federal cloud computing contracts?

SMARTRONIX, LLC has a history of securing federal contracts, including those related to IT services and cloud solutions. Their experience often involves supporting various government agencies with their digital transformation efforts. While this specific award is for cloud compute and capacity, their broader portfolio likely includes related services such as cybersecurity, managed IT, and system integration. A deeper dive into their past performance on similar contracts, including customer satisfaction ratings and any past performance issues, would provide a more comprehensive understanding of their capabilities and reliability in delivering cloud services to federal clients.

How does the $8.1 million value compare to similar CDC cloud contracts?

The $8.1 million award value for cloud compute and capacity services over approximately two years is a moderate investment for a federal agency like the CDC. To benchmark effectively, one would need to compare it against other CDC contracts for similar cloud services, considering factors like the scope of services (e.g., IaaS, PaaS, SaaS), the specific cloud providers utilized (AWS, Azure, GCP), the volume of data processed, and the required uptime and performance SLAs. Without access to a comprehensive database of CDC's historical cloud spending and contract details, a precise comparison is difficult. However, given the competitive award process, it suggests the pricing is likely aligned with market rates for comparable federal cloud solutions.

What are the primary risks associated with this contract for the CDC?

Key risks for the CDC with this contract include potential vendor lock-in, where migrating away from SMARTRONIX, LLC in the future could be complex and costly. There's also a risk related to data security and compliance, ensuring that the cloud environment managed by the contractor meets all federal regulations (e.g., FISMA, HIPAA). Performance degradation or service outages, although mitigated by the firm-fixed-price structure and SLAs, remain a concern. Furthermore, cost overruns could occur if usage patterns exceed initial projections or if scope creep is not managed effectively, despite the fixed-price nature of the base contract.

How effective is the firm-fixed-price (FFP) contract type in managing cloud service costs for the CDC?

The firm-fixed-price (FFP) contract type is generally effective in providing cost predictability for the CDC, as it shifts the risk of cost overruns to the contractor, SMARTRONIX, LLC. This structure incentivizes the contractor to manage their own costs efficiently. However, for cloud services, which can have variable usage patterns, an FFP contract might be less flexible than other types like cost-plus or time-and-materials if the scope of services or usage needs to change significantly. The CDC must ensure that the SOW clearly defines the expected services and that mechanisms are in place to manage potential changes or additional usage, possibly through contract modifications or separate task orders, to fully realize the cost-control benefits of FFP.

What are the historical spending patterns of the CDC on cloud computing services?

The CDC, like many federal health agencies, has been progressively increasing its investment in cloud computing to support its vast data processing, research, and public health initiatives. Historically, agencies often relied on on-premises data centers, but the trend has shifted towards cloud adoption for scalability, agility, and cost-efficiency. While specific historical spending figures for CDC's cloud services are not detailed in the provided data, this $8.1 million award indicates a continued commitment to cloud infrastructure. Analyzing past GSA Schedule awards or direct cloud service procurements by the CDC would reveal trends in their cloud adoption journey and spending levels over time.

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 - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFSA23Q0051

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 44150 SMARTRONIX WAY STE 200, HOLLYWOOD, MD, 20636

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

Financial Breakdown

Contract Ceiling: $12,573,481

Exercised Options: $9,857,481

Current Obligation: $8,078,041

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCK18D0007

IDV Type: GWAC

Timeline