DHS awards $45.4M for software services, with 4 bidders competing for a firm-fixed-price contract

Contract Overview

Contract Amount: $45,401,607 ($45.4M)

Contractor: Four Points Technology, L.L.C.

Awarding Agency: Department of Homeland Security

Start Date: 2020-04-15

End Date: 2022-04-29

Contract Duration: 744 days

Daily Burn Rate: $61.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SOFTWARE AS A SERVICE

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $45.4 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: SOFTWARE AS A SERVICE Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The fixed-price nature of the contract shifts performance risk to the contractor. 3. The duration of 744 days (2 years) provides a stable period for service delivery. 4. The North American Industry Classification System (NAICS) code 541519 indicates a broad range of IT services. 5. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's value of $45.4 million over two years averages to approximately $22.7 million annually. Benchmarking this against similar software-as-a-service (SaaS) contracts is challenging without specific service details. However, the firm-fixed-price structure generally indicates a commitment to a defined scope at a set cost, which can be advantageous for budget predictability. The number of bidders (4) suggests a reasonable level of competition that likely influenced the final pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. The presence of four bidders suggests a healthy level of competition, which typically leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers as it likely drove down costs through market forces, ensuring the government received competitive pricing for the software services.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from this contract by acquiring necessary software services. The services delivered are categorized under 'Other Computer Related Services,' implying a range of IT support and solutions. The contract is managed by the Department of Homeland Security (DHS), indicating its alignment with national security and border management objectives. The workforce implications are likely related to IT professionals supporting the development, maintenance, or operation of the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the software's function makes it difficult to assess its criticality and potential impact of failure.
The broad NAICS code (541519) could encompass a wide array of services, making it hard to pinpoint specific value or risks without further context.
The contract type 'Delivery Order' suggests it's part of a larger IDIQ, and the overall value and performance of the parent contract are unknown.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm-fixed-price contract type shifts cost overrun risk to the contractor.
The contract duration of 744 days provides a clear timeframe for service delivery and performance evaluation.

Sector Analysis

The IT services sector is vast and highly competitive. Contracts for software services, particularly SaaS, are increasingly common as government agencies modernize their operations. The value of $45.4 million over two years places this contract in the mid-tier range for federal IT procurements. Comparable spending benchmarks would depend heavily on the specific type of software and services procured, but this award reflects the ongoing trend of federal agencies leveraging external expertise for specialized IT needs.

Small Business Impact

There is no indication that this contract involved small business set-asides, as the 'ss' and 'sb' fields are false. This suggests that the competition was open to all responsible sources, including large businesses. The implications for small businesses would depend on whether they were prime contractors or subcontractors on this award. Without subcontracting plans or data, it's difficult to assess the direct impact on the small business ecosystem, though larger prime contracts often involve subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and specifically U.S. Customs and Border Protection (CBP). As a delivery order under a potential IDIQ, oversight may also involve the administration of the parent contract. Transparency is facilitated by contract award databases, but detailed performance metrics and specific oversight mechanisms are not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security IT Modernization Programs
U.S. Customs and Border Protection Technology Modernization
Federal Civilian IT Services Contracts
Software as a Service (SaaS) Procurements

Risk Flags

Lack of specific service details hinders comprehensive risk assessment.
Potential for scope creep in fixed-price contracts for evolving IT services.
Performance of the parent IDIQ contract (if applicable) is unknown.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $45.4 million to FOUR POINTS TECHNOLOGY, L.L.C.. SOFTWARE AS A SERVICE

Who is the contractor on this award?

The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..

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 $45.4 million.

What is the period of performance?

Start: 2020-04-15. End: 2022-04-29.

What is the specific nature of the 'Other Computer Related Services' being procured under this contract?

The provided data indicates the NAICS code is 541519, which covers 'Other Computer Related Services.' This is a broad category that can include services such as IT consulting, systems integration, custom software development, IT support, and data processing services. Without more specific information from the contract announcement or associated documents, it is impossible to determine the exact nature of the services. For instance, it could range from cloud-based software solutions to specialized IT support for existing systems. Understanding the precise services is crucial for a comprehensive assessment of value, risk, and performance.

How does the $45.4 million contract value compare to similar IT service contracts awarded by DHS or CBP?

Comparing the $45.4 million contract value requires context regarding the specific services and duration. Over its 744-day (approximately 2-year) period, this contract represents an average annual expenditure of roughly $22.7 million. The Department of Homeland Security and U.S. Customs and Border Protection procure a wide range of IT services, from large-scale system development to routine maintenance and support. To benchmark effectively, one would need to identify contracts with similar NAICS codes, service scopes (e.g., SaaS, cloud services, cybersecurity), and contract types (firm-fixed-price). However, as a general observation, this value falls within a common range for significant IT service procurements within large federal agencies.

What are the potential risks associated with a firm-fixed-price contract for software services?

Firm-fixed-price (FFP) contracts are designed to provide cost certainty for the buyer. The primary risk for the government is that the contractor may cut corners on quality or scope to maintain profitability if costs escalate unexpectedly. For the contractor, the risk lies in underestimating costs or encountering unforeseen technical challenges, which could lead to financial losses. In the context of software services, risks include scope creep if not managed tightly, potential for the contractor to prioritize less complex features, or challenges in adapting to evolving technological requirements within the fixed price. Effective government oversight and clear performance metrics are essential to mitigate these risks.

What does the 'Full and Open Competition After Exclusion of Sources' designation imply for this contract?

This designation signifies that the contract was initially intended for full and open competition, but specific sources were excluded for reasons that were documented and justified. This is distinct from a sole-source award where only one vendor is solicited. The fact that four bidders submitted offers indicates that despite potential exclusions, a competitive environment was still fostered. This approach aims to balance the need for competition with specific requirements or circumstances that might limit the pool of eligible contractors. It suggests that the agency sought the best value through a competitive process while adhering to specific procurement regulations.

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

Analyzing historical spending patterns for 'Other Computer Related Services' (NAICS 541519) by U.S. Customs and Border Protection (CBP) would require access to historical contract databases and detailed spending reports. Generally, agencies like CBP, responsible for border security and trade facilitation, have significant and often increasing needs for IT services to manage vast amounts of data, support complex operational systems, and enhance security measures. Spending in this category typically fluctuates based on modernization initiatives, system upgrades, and evolving technological requirements. A trend analysis would likely show consistent investment in IT services, with potential spikes during major system overhauls or the implementation of new technologies.

What is the significance of the contract being an 'Award: Delivery Order'?

The designation 'Award: Delivery Order' indicates that this contract is a specific order placed against a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. IDIQs allow agencies to procure supplies or services over a set period, with the flexibility to issue task orders or delivery orders as needed. This approach streamlines the procurement process for recurring needs. The significance here is that the $45.4 million represents a portion of a potentially larger contract ceiling. The performance, pricing, and competition of the parent IDIQ contract would provide broader context for this specific delivery order.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14900 CONFERENCE CENTER DR STE 100, CHANTILLY, VA, 20151

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $49,732,173

Exercised Options: $45,401,607

Current Obligation: $45,401,607

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSHQDC13D00003

IDV Type: IDC

Timeline