EPA awards $53.5M IT support contract to SYSTALEX CORPORATION for DWPD systems

Contract Overview

Contract Amount: $53,534,713 ($53.5M)

Contractor: Systalex Corporation

Awarding Agency: Environmental Protection Agency

Start Date: 2021-04-12

End Date: 2026-10-11

Contract Duration: 2,008 days

Daily Burn Rate: $26.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: EPA OW OGWDW DWPD IT SYSTEMS SUPPORT SERVICES (DWPD IT SYSTEMS SUPPORT SERVICES)

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20460

State: District of Columbia Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $53.5 million to SYSTALEX CORPORATION for work described as: EPA OW OGWDW DWPD IT SYSTEMS SUPPORT SERVICES (DWPD IT SYSTEMS SUPPORT SERVICES) Key points: 1. Contract provides essential IT support for the EPA's Drinking Water and Wastewater Programs Directorate. 2. SYSTALEX CORPORATION, a small business, secured this contract through full and open competition. 3. The contract duration extends over five years, indicating a long-term need for these services. 4. The award was made via a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The contract type is Time and Materials, which can pose cost control challenges if not managed closely. 6. The total value of $53.5M is spread across the performance period, requiring ongoing budget allocation. 7. The North American Industry Classification System (NAICS) code 541519 points to a broad range of IT services.

Value Assessment

Rating: fair

The contract value of $53.5M over approximately five years averages around $10.7M annually. Without specific benchmarks for IT systems support services for a federal agency of the EPA's size and complexity, a direct value-for-money assessment is challenging. However, the Time and Materials (T&M) contract type, while flexible, can lead to higher costs if not carefully managed and monitored for efficiency. The number of bids received (4) suggests some level of competition, but the ultimate pricing effectiveness depends on the negotiated labor rates and the efficiency of the contractor's service delivery.

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 offers. Four bids were received, suggesting a moderate level of competition for this requirement. While four bidders is not an exceptionally high number, it does provide a basis for price comparison and negotiation. The open competition process is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing due to the open competition. The presence of multiple bidders helps ensure that the selected contractor's pricing is reasonable and aligned with market rates for similar IT support services.

Public Impact

The primary beneficiaries are the EPA's Drinking Water and Wastewater Programs Directorate, which will receive critical IT support. Services delivered include IT systems support, maintenance, and potentially development, ensuring the operational continuity of vital water programs. The geographic impact is national, as the EPA's programs serve the entire United States. Workforce implications include the potential for IT professionals employed by SYSTALEX CORPORATION to work on federal projects, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored for labor hours and rates.
The broad NAICS code (541519) may encompass a wide range of services, requiring clear scope definition to avoid scope creep.
Reliance on a single contractor for critical IT systems support could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
SYSTALEX CORPORATION is a small business, potentially aligning with federal small business contracting goals.
The contract duration of over five years suggests a stable, long-term need for these services, indicating program importance.

Sector Analysis

The IT services sector is vast and highly competitive. This contract falls under IT support services, a critical component for government agencies to maintain their digital infrastructure and operational capabilities. The market for federal IT support is substantial, with agencies consistently investing in maintaining and upgrading their systems. Comparable spending benchmarks for IT support services can vary widely based on the scope, complexity, and specific technologies involved, but agencies typically allocate significant portions of their budgets to IT operations and maintenance.

Small Business Impact

SYSTALEX CORPORATION is identified as a small business, and this award contributes to federal small business contracting goals. The contract was awarded through full and open competition, meaning small businesses were not exclusively targeted but had the opportunity to compete. The implications for the broader small business ecosystem depend on whether SYSTALEX CORPORATION intends to use subcontractors, particularly other small businesses, to fulfill the contract requirements. If subcontracting is utilized, it can provide valuable opportunities for other small firms.

Oversight & Accountability

Oversight for this contract will likely be managed by the EPA's contracting officers and program managers responsible for the Drinking Water and Wastewater Programs Directorate. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and potential penalties for non-compliance. Transparency is facilitated through contract award databases like FPDS-NG. The Inspector General's office for the EPA may conduct audits or investigations into contract performance and financial management if concerns arise.

Related Government Programs

EPA IT Modernization Initiatives
Federal Civilian Agency IT Services
Drinking Water Infrastructure Support
Wastewater Treatment Technology Support
Government IT Operations and Maintenance

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Dependence on a single contractor for critical IT infrastructure.
Scope creep risk if requirements are not clearly defined and managed.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $53.5 million to SYSTALEX CORPORATION. EPA OW OGWDW DWPD IT SYSTEMS SUPPORT SERVICES (DWPD IT SYSTEMS SUPPORT SERVICES)

Who is the contractor on this award?

The obligated recipient is SYSTALEX CORPORATION.

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $53.5 million.

What is the period of performance?

Start: 2021-04-12. End: 2026-10-11.

What is the track record of SYSTALEX CORPORATION in performing similar IT support services for federal agencies?

Assessing SYSTALEX CORPORATION's track record requires a review of their past performance on federal contracts. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any reported issues or successes. Without specific data on their past performance, it's difficult to definitively gauge their capability. However, the fact that they were awarded this significant contract suggests they met the minimum qualifications and demonstrated some level of competence during the bidding process. Further due diligence would involve looking for evidence of successful project completion, client satisfaction, and adherence to contract terms in prior engagements.

How does the awarded amount of $53.5M compare to similar IT support contracts for federal environmental agencies?

Comparing the $53.5M award to similar contracts requires access to a benchmark of IT support services for federal environmental agencies. Factors influencing contract value include the scope of services (e.g., help desk, network management, cybersecurity, application development), the number of users supported, the complexity of the IT infrastructure, and the contract duration. For a five-year contract, $53.5M averages approximately $10.7M per year. This figure needs to be contextualized against the size and IT needs of the EPA's specific directorate. Larger agencies or those with more complex IT environments might have higher annual IT support expenditures. Without specific comparable contract data, it's challenging to definitively state if this represents high or low value, but it appears to be a substantial investment in IT support.

What are the primary risks associated with a Time and Materials (T&M) contract for IT support services?

The primary risk with a Time and Materials (T&M) contract is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure can incentivize longer task durations or less efficient work if not rigorously managed. For the government, it means less predictability in the final cost. To mitigate these risks, strong oversight is crucial, including detailed tracking of labor hours, verification of material costs, and clear task definitions. The EPA will need robust project management and financial controls to ensure that the T&M contract delivers value and stays within budget expectations.

How effective is the competition level (4 bidders) in ensuring price discovery for this IT support contract?

A competition level of four bidders for this IT support contract provides a moderate degree of price discovery. While more bidders could potentially drive prices lower through increased competition, four offers generally indicate that the requirement was sufficiently defined and attractive to multiple potential providers. This number allows the government to compare pricing structures, labor rates, and proposed approaches. The effectiveness of this competition in ensuring optimal price discovery also depends on the quality and realism of the bids submitted. If the bids were very close in price or if there were significant differences in proposed scope, further analysis would be needed to determine the best value.

What are the potential implications of this contract on the EPA's ability to modernize its IT systems?

This contract for IT systems support services is crucial for the EPA's ability to maintain and potentially modernize its IT infrastructure. By ensuring the ongoing operational stability of existing systems, it frees up resources and allows the agency to focus on strategic modernization efforts. The support provided by SYSTALEX CORPORATION can encompass maintaining the platforms upon which new technologies are deployed or even assisting in the migration and integration of modernized systems. The effectiveness of this contract in supporting modernization will depend on the specific tasks outlined in the scope of work and the contractor's ability to adapt to evolving technological requirements.

What is the historical spending pattern for IT support services within the EPA's Drinking Water and Wastewater Programs Directorate?

To understand the historical spending pattern for IT support services within the EPA's Drinking Water and Wastewater Programs Directorate (DWPD), one would need to analyze past contract awards and expenditures for similar services over several fiscal years. This analysis would reveal trends in spending, identify key contractors, and show how the agency's IT support needs have evolved. Without access to this specific historical data, it's difficult to provide a precise pattern. However, federal agencies typically show consistent or increasing spending on IT support due to the growing reliance on digital systems and the need for ongoing maintenance, security, and upgrades.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFQ1463795

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 20745 WILLIAMSPORT PL STE 290, ASHBURN, VA, 20147

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,430,608

Exercised Options: $71,430,608

Current Obligation: $53,534,713

Actual Outlays: $47,619,356

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA20D0006

IDV Type: FSS

Timeline