DHS awards $28.2M cloud access point contract to Red River Technology LLC, with 2 bidders

Contract Overview

Contract Amount: $28,195,604 ($28.2M)

Contractor: RED River Technology LLC

Awarding Agency: Department of Homeland Security

Start Date: 2018-09-28

End Date: 2023-09-27

Contract Duration: 1,825 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF CLOUD ACCESS POINT

Place of Performance

Location: SPRINGFIELD, ACCOMACK County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $28.2 million to RED RIVER TECHNOLOGY LLC for work described as: IGF::OT::IGF CLOUD ACCESS POINT Key points: 1. Contract value of $28.2M over 5 years suggests a significant investment in cloud infrastructure. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. With only 2 bidders, the level of competition may have influenced pricing dynamics. 4. The fixed-price contract type aims to control costs for the government. 5. This contract falls under 'Other Computer Related Services', a broad category within IT. 6. The duration of 1825 days (5 years) provides long-term planning for cloud services.

Value Assessment

Rating: fair

The contract value of $28.2 million over five years averages to approximately $5.64 million annually. Benchmarking this against similar cloud access point contracts is challenging without more specific service details. However, the number of bidders (2) suggests potential limitations in price discovery, which could impact overall value for money. The firm fixed-price nature provides cost certainty, but the ultimate value depends on the efficiency and effectiveness of the services delivered by Red River Technology LLC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. Despite this broad solicitation, only two bids were received. This limited number of bidders could indicate a specialized market, high barriers to entry, or potentially a lack of widespread interest from potential vendors for this specific requirement. The limited competition may have resulted in less aggressive pricing than if more vendors had participated.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing possible. While the process was open, the outcome suggests that the government might not have achieved the lowest possible cost for these cloud services.

Public Impact

U.S. Customs and Border Protection (CBP) is the primary beneficiary, gaining access to cloud infrastructure. The contract supports the delivery of essential IT services for border security and management. The geographic impact is national, supporting CBP operations across various locations. Workforce implications include potential support roles for IT specialists managing cloud services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have reduced price negotiation leverage for the government.
The broad 'Other Computer Related Services' category could mask specific performance risks if not clearly defined.
Long-term contract duration (5 years) requires ongoing monitoring to ensure continued value and relevance.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
Firm fixed-price contract type provides cost predictability.
Contractor Red River Technology LLC has experience in government IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on cloud services. The market for cloud computing services is vast and rapidly growing, with significant government spending allocated to modernizing infrastructure. Comparable spending benchmarks would typically involve analyzing other cloud service contracts awarded by agencies like DHS or other federal entities for similar scope and duration. The 'Other Computer Related Services' NAICS code (541519) is broad, encompassing a range of IT support functions.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications mandated for small businesses through this specific award. The focus was on full and open competition, which typically favors larger, established prime contractors. The impact on the small business ecosystem is indirect, as they may compete for subcontracts if Red River Technology LLC chooses to engage them, or they may focus on other opportunities where set-asides are more prevalent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security and U.S. Customs and Border Protection contracting officers and program managers. The firm fixed-price nature provides some cost control, but performance monitoring is crucial. Transparency is facilitated by contract award databases, but detailed performance metrics are typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Cloud Computing Services
IT Infrastructure Modernization
Department of Homeland Security IT Contracts
U.S. Customs and Border Protection IT Services
Other Computer Related Services Contracts

Risk Flags

Limited Competition
Potential for Cost Overruns if SOW is Ambiguous
Reliance on Single Vendor for Critical Service

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $28.2 million to RED RIVER TECHNOLOGY LLC. IGF::OT::IGF CLOUD ACCESS POINT

Who is the contractor on this award?

The obligated recipient is RED RIVER TECHNOLOGY LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2018-09-28. End: 2023-09-27.

What is Red River Technology LLC's track record with federal contracts, particularly within DHS?

Red River Technology LLC has a significant history of federal contracting, including numerous awards from various agencies. Within the Department of Homeland Security (DHS), the company has secured multiple contracts, indicating a level of established performance and familiarity with the agency's requirements. Their portfolio often includes IT hardware, software, and related services. Analyzing their past performance on similar cloud or IT infrastructure contracts within DHS would provide further insight into their capabilities and reliability for this specific award. A review of past performance evaluations and any contract disputes or terminations would be pertinent.

How does the $28.2 million contract value compare to similar cloud access point contracts awarded by federal agencies?

The $28.2 million contract value over five years, averaging approximately $5.64 million annually, places this award in the mid-to-large tier for IT service contracts. Direct comparisons are difficult without knowing the precise scope of 'cloud access point' services, which can vary widely. However, federal agencies frequently award multi-million dollar contracts for cloud services (e.g., AWS, Azure, Google Cloud) and related support. Contracts for similar durations and complexity, especially those involving significant data migration or managed services, can range from tens to hundreds of millions of dollars. The number of bidders (two) suggests this might be a specialized niche or that the total contract value was not perceived as exceptionally large by the broader market.

What are the primary risks associated with this contract, given the limited competition?

The primary risk associated with this contract stems from the limited competition, with only two bidders. This can lead to reduced price negotiation leverage for the government, potentially resulting in higher costs than if more vendors had competed. There's also a risk of vendor lock-in or reduced incentive for the incumbent to innovate or maintain optimal service levels if future competition is also expected to be limited. Furthermore, the broad NAICS code 'Other Computer Related Services' could obscure specific performance risks if the detailed Statement of Work (SOW) is not robustly defined and monitored. Dependence on a single provider for critical cloud access points also introduces operational risk.

How effective is the firm fixed-price contract type in managing costs for cloud services?

The firm fixed-price (FFP) contract type is generally effective in managing costs for cloud services because it shifts the risk of cost overruns to the contractor, Red River Technology LLC. The government agrees to pay a set price, regardless of the contractor's actual costs. This provides budget certainty and incentivizes the contractor to perform efficiently to maximize profit. However, for services like cloud computing, where usage can fluctuate or unforeseen technical challenges arise, an FFP contract might disincentivize the contractor from suggesting cost-saving measures if they are not explicitly required by the SOW. It also requires a very clear and detailed SOW to avoid scope creep disputes.

What are the historical spending patterns for 'Other Computer Related Services' by U.S. Customs and Border Protection?

Historical spending patterns for 'Other Computer Related Services' (NAICS 541519) by U.S. Customs and Border Protection (CBP) likely show a consistent need for a variety of IT support functions beyond standard software development or hardware procurement. This category often includes services such as IT consulting, system integration, network management, and specialized technical support. CBP, being a large operational agency, would require such services to maintain and upgrade its complex IT infrastructure supporting border security, trade, and immigration functions. Annual spending within this category can fluctuate based on specific modernization initiatives, cybersecurity needs, and the lifecycle of existing systems, but it generally represents a significant portion of their overall IT budget.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21 WATER ST STE 500, CLAREMONT, NH, 03743

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

Financial Breakdown

Contract Ceiling: $28,195,604

Exercised Options: $28,195,604

Current Obligation: $28,195,604

Actual Outlays: $9,037,560

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC46B

IDV Type: GWAC

Timeline