DOT's $26.8M IT support contract for NextGen initiative awarded to Digitalibiz, LLC

Contract Overview

Contract Amount: $26,769,912 ($26.8M)

Contractor: Digitalibiz, LLC

Awarding Agency: Department of Transportation

Start Date: 2020-03-18

End Date: 2026-09-23

Contract Duration: 2,380 days

Daily Burn Rate: $11.2K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: MANAGEMENT AND TECHNICAL SUPPORT, PORTFOLIO COORDINATION, AND INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE PRE-IMPLEMENTATION PHASE OF THE NEXTGEN INITIATIVE.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $26.8 million to DIGITALIBIZ, LLC for work described as: MANAGEMENT AND TECHNICAL SUPPORT, PORTFOLIO COORDINATION, AND INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE PRE-IMPLEMENTATION PHASE OF THE NEXTGEN INITIATIVE. Key points: 1. Contract provides essential IT and management support for the critical pre-implementation phase of the NextGen initiative. 2. Awarded to a single contractor, Digitalibiz, LLC, raising questions about competition and potential price discovery. 3. The contract duration extends over six years, indicating a long-term need for these services. 4. Services encompass portfolio coordination and technical support, crucial for the modernization of the air traffic system. 5. The use of Time and Materials pricing could lead to cost overruns if not closely managed. 6. The contract value is significant, representing a substantial investment in the NextGen program's foundational stages.

Value Assessment

Rating: fair

The contract value of $26.8 million over approximately six years for IT and management support appears reasonable for a complex, long-term initiative like NextGen. However, without specific benchmarks for similar pre-implementation IT support contracts within the FAA or other large-scale federal IT modernization programs, a definitive value-for-money assessment is challenging. The Time and Materials (T&M) pricing structure, while flexible, carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require comparing the labor rates and overhead charged by Digitalibiz, LLC against industry standards and historical FAA IT support contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), suggesting it was intended for smaller procurements. The data indicates two bids were received, which is a limited level of competition. While SAP aims for efficiency, it may not always yield the most competitive pricing compared to full and open competition. The limited number of bidders could mean that potential offerors were not aware of the opportunity or that the specific requirements of the BPA call limited the pool of qualified contractors.

Taxpayer Impact: A limited competition may result in higher prices for taxpayers compared to a scenario with more bidders vying for the contract. This could mean less cost savings and potentially a less optimal allocation of federal funds.

Public Impact

The Federal Aviation Administration (FAA) benefits directly through enhanced IT and management support for the NextGen initiative. The contract supports the modernization of the U.S. air traffic control system, aiming for increased safety and efficiency. The geographic impact is national, as NextGen affects all air travel within the United States. Workforce implications include the need for specialized IT and management personnel, potentially creating or sustaining jobs in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing structure introduces risk of cost overruns if not diligently managed and monitored.
Limited competition (2 bidders) under SAP may have resulted in a higher price than a broader competition.
The long contract duration (over 6 years) requires sustained oversight to ensure continued value and performance.
The specific nature of 'pre-implementation phase' support might be difficult to scope precisely, leading to potential scope creep.

Positive Signals

Contract supports a critical national infrastructure modernization program (NextGen), indicating strategic importance.
Awarded to a single entity, Digitalibiz, LLC, suggesting they possess specialized capabilities required for this phase.
The contract duration allows for continuity of essential services throughout a significant project phase.
The BPA Call award mechanism implies a pre-negotiated framework, potentially streamlining service delivery.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically focusing on IT and management support for a large-scale government initiative. The NextGen initiative represents a significant investment in modernizing the U.S. air traffic control system, a sector characterized by complex technological integration and substantial federal funding. Comparable spending benchmarks would typically be found in other large federal IT modernization projects or major infrastructure development programs, often involving multi-year, multi-million dollar contracts for specialized technical and management expertise.

Small Business Impact

The contract data indicates that small business participation (sb) is false, and it was not set aside for small businesses (ss is false). This suggests that the primary award was not directed towards small businesses. There is no explicit information regarding subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem from this specific prime contract appears limited, although the prime contractor may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and program managers within the Federal Aviation Administration (FAA). Given the contract's duration and complexity, regular performance reviews, milestone tracking, and financial audits are expected oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

NextGen Air Transportation System
FAA IT Modernization Programs
Federal Aviation Administration Contracts
Management and Technical Support Services
Information Technology Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition may have resulted in suboptimal pricing.
Oversight required for long-duration contract.
Use of SAP for a large-value contract warrants scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $26.8 million to DIGITALIBIZ, LLC. MANAGEMENT AND TECHNICAL SUPPORT, PORTFOLIO COORDINATION, AND INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE PRE-IMPLEMENTATION PHASE OF THE NEXTGEN INITIATIVE.

Who is the contractor on this award?

The obligated recipient is DIGITALIBIZ, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $26.8 million.

What is the period of performance?

Start: 2020-03-18. End: 2026-09-23.

What is the track record of Digitalibiz, LLC in performing similar IT and management support contracts for the federal government, particularly within the aviation sector?

Assessing the track record of Digitalibiz, LLC requires a deeper dive into federal procurement databases beyond the provided data. While this contract highlights their role in the NextGen initiative, understanding their past performance on similar large-scale IT projects, especially those involving complex system integration or pre-implementation phases, is crucial. Information on contract history, past performance evaluations (e.g., CPARS), and any past disputes or challenges would provide a clearer picture of their reliability and capability. Without this historical context, it's difficult to definitively gauge their experience level and suitability for such a critical role beyond this single award.

How does the awarded price of $26.8 million compare to market rates for similar IT and management support services for large federal initiatives?

A direct comparison of the $26.8 million total contract value to market rates is challenging without detailed breakdowns of labor categories, hours, and overhead applied by Digitalibiz, LLC. However, the contract's duration of approximately six years suggests an average annual spend of roughly $4.5 million. This figure needs to be benchmarked against industry data for IT consulting, portfolio management, and technical support services for major government programs. Factors like the specific technologies involved, the level of security clearance required, and the geographic location of services would influence market rates. The Time and Materials (T&M) pricing model also complicates direct price comparison, as actual costs can vary.

What are the primary risks associated with the Time and Materials (T&M) pricing structure in this contract, and how are they being mitigated?

The primary risk with a T&M contract is the potential for cost overruns, as the government pays for the actual labor hours and materials used, plus a fixed fee or percentage for overhead and profit. This can lead to unpredictable expenditures if the scope is not well-defined or if contractor efficiency is low. Mitigation strategies typically involve robust government oversight, including detailed monitoring of labor hours, validation of material costs, and regular performance reviews to ensure efficiency and adherence to scope. Establishing clear ceilings and requiring detailed reporting are also crucial mitigation tactics to control costs and ensure value for taxpayer money.

What is the expected effectiveness of the IT and management support provided by Digitalibiz, LLC in advancing the pre-implementation phase of the NextGen initiative?

The effectiveness of Digitalibiz, LLC's support hinges on their ability to deliver critical portfolio coordination and technical expertise during the foundational stages of NextGen. Success will be measured by their contribution to defining project requirements, establishing robust IT infrastructure plans, and ensuring seamless integration of future system components. Key performance indicators (KPIs) likely tied to this contract would include timely completion of milestones, quality of documentation, and successful coordination among various stakeholders involved in the NextGen program. Their role is crucial for setting the stage for subsequent implementation phases, impacting the overall success and timeline of NextGen.

How does current spending on this contract compare to historical spending patterns for similar IT support services within the FAA or for the NextGen program itself?

To compare current spending with historical patterns, one would need access to historical FAA IT spending data and previous contract awards related to the NextGen initiative. This contract, valued at approximately $26.8 million over six years, represents a significant but potentially necessary investment for the pre-implementation phase. Analyzing trends in IT support costs for major federal programs, especially those involving system modernization, would provide context. If historical data shows similar contracts costing significantly less or more, it would inform whether this award is within expected parameters or warrants further scrutiny regarding cost-effectiveness.

What are the implications of awarding this contract under Simplified Acquisition Procedures (SAP) given its total value?

Awarding a contract with a total value of $26.8 million under Simplified Acquisition Procedures (SAP) is unusual, as SAP is typically intended for procurements valued up to $250,000 (or higher thresholds for specific circumstances like construction or certain services). This suggests that either the initial award was significantly smaller and has been incrementally funded to reach this total, or that specific exceptions or higher SAP thresholds were applied. Using SAP for larger values can limit competition and potentially lead to less favorable pricing compared to full and open competition, raising questions about the procurement strategy and its impact on achieving best value for the government.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chickasaw Nation

Address: 9210 CORPORATE BLVD STE 410, ROCKVILLE, MD, 20850

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,952,162

Exercised Options: $26,859,912

Current Obligation: $26,769,912

Actual Outlays: $23,837,118

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $241,600

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTFAWA10A00007

IDV Type: BPA

Timeline