DHS awards $44.3M for Amazon Web Services, highlighting IT infrastructure needs

Contract Overview

Contract Amount: $44,346,642 ($44.3M)

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

Awarding Agency: Department of Homeland Security

Start Date: 2021-12-02

End Date: 2022-12-20

Contract Duration: 383 days

Daily Burn Rate: $115.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS REQUIREMENT IS TO PROVIDE AMAZON WEB SERVICES TO THE OFFICE OF INFORMATION AND TECHNOLOGY.

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $44.3 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: THE PURPOSE OF THIS REQUIREMENT IS TO PROVIDE AMAZON WEB SERVICES TO THE OFFICE OF INFORMATION AND TECHNOLOGY. Key points: 1. Contract value represents a significant investment in cloud computing services. 2. Competition was open, suggesting potential for competitive pricing. 3. Risk indicators are moderate, given the reliance on a single cloud provider. 4. Performance context is crucial for ensuring service delivery meets agency needs. 5. Sector positioning is within IT services, a critical area for government operations.

Value Assessment

Rating: good

The contract value of $44.3 million for Amazon Web Services appears reasonable for a one-year duration, especially considering the scale of IT infrastructure required by U.S. Customs and Border Protection. Benchmarking against similar large-scale cloud service contracts within federal agencies suggests this pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, though it may limit flexibility if requirements change significantly.

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 multiple vendors were likely considered. The presence of two bidders suggests a competitive environment, which generally benefits price discovery and can lead to more favorable terms for the government. The specific details of the bidding process would provide further insight into the intensity of the competition.

Taxpayer Impact: The open competition for these essential cloud services helps ensure that taxpayer dollars are used efficiently by fostering a market-driven price. This approach minimizes the risk of overpayment compared to sole-source or limited competition scenarios.

Public Impact

Benefits U.S. Customs and Border Protection by providing essential cloud infrastructure. Supports critical government functions related to border security and trade. Ensures access to scalable and reliable IT resources for agency operations. Impacts the federal IT workforce through the utilization of modern cloud platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single cloud provider (AWS) could pose vendor lock-in risks.
Potential for cost escalation if usage exceeds initial projections.
Security of sensitive government data in a cloud environment requires continuous vigilance.

Positive Signals

Leverages a leading cloud service provider known for reliability and innovation.
Firm fixed-price contract provides budget predictability.
Open competition suggests a well-managed procurement process.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically cloud computing services. The federal government's spending on cloud services has been steadily increasing as agencies modernize their infrastructure and seek greater agility and cost-efficiency. Comparable spending benchmarks for cloud services can vary widely based on the scope of services, duration, and specific provider, but this contract represents a substantial investment for a single agency's needs.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. While the primary awardee is Four Points Technology, L.L.C., it is unclear if they are a small business or if subcontracting opportunities for small businesses were mandated. Further analysis would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices. The Inspector General's office may conduct audits or investigations into the contract's performance and financial management. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics are often internal.

Related Government Programs

Cloud Computing Services
IT Infrastructure Modernization
Department of Homeland Security IT Spending
Amazon Web Services Federal Contracts

Risk Flags

Potential vendor lock-in with AWS.
Data security and privacy concerns in a cloud environment.
Dependence on a single provider for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $44.3 million to FOUR POINTS TECHNOLOGY, L.L.C.. THE PURPOSE OF THIS REQUIREMENT IS TO PROVIDE AMAZON WEB SERVICES TO THE OFFICE OF INFORMATION AND TECHNOLOGY.

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 $44.3 million.

What is the period of performance?

Start: 2021-12-02. End: 2022-12-20.

What is the track record of Four Points Technology, L.L.C. in delivering similar cloud services to federal agencies?

Four Points Technology, L.L.C. has a history of providing IT solutions and services to the federal government, often acting as a reseller or prime contractor for various technology products and cloud services. Their experience with large-scale cloud deployments, particularly with AWS, would be a key factor in assessing their capability to meet the demands of U.S. Customs and Border Protection. Reviewing past performance evaluations and contract histories would provide a clearer picture of their reliability and success in similar engagements. Specific details on their past performance related to AWS services and the scale of previous contracts would be crucial for a comprehensive assessment.

How does the pricing of this AWS contract compare to other federal agencies procuring similar services?

Benchmarking the pricing of this $44.3 million AWS contract against similar federal procurements is essential for evaluating value for money. Factors such as the specific AWS services utilized (e.g., compute, storage, databases), the volume of usage, and the contract duration significantly influence costs. While the firm fixed-price nature offers budget certainty, it's important to compare the per-unit costs or overall expenditure against agencies with comparable cloud footprints and service needs. Without access to detailed service usage data and specific pricing agreements, a precise comparison is challenging, but the overall award value can be assessed against the agency's mission criticality and the duration of the contract.

What are the primary risks associated with relying on Amazon Web Services for critical border security IT functions?

The primary risks associated with relying on Amazon Web Services (AWS) for critical border security IT functions include vendor lock-in, potential security vulnerabilities, and service disruptions. Vendor lock-in can make it difficult and costly to switch providers in the future. Security is paramount, and while AWS offers robust security measures, the government must ensure its data is adequately protected and compliant with all federal regulations. Service disruptions, though infrequent with major cloud providers, could have significant operational impacts. Furthermore, the geopolitical implications or business decisions of AWS could indirectly affect government operations. Continuous monitoring, strong security protocols, and contingency planning are vital to mitigate these risks.

How effective has the Department of Homeland Security been in managing its cloud computing contracts to ensure optimal performance and cost-efficiency?

The effectiveness of the Department of Homeland Security (DHS) in managing its cloud computing contracts is a complex question with varied outcomes across different sub-agencies and contracts. DHS, like many large federal agencies, has been on a journey to modernize its IT infrastructure, with cloud adoption being a key component. Successes often involve leveraging cloud's scalability and agility for specific mission needs. Challenges can arise from legacy system integration, workforce skill gaps in cloud technologies, and ensuring consistent cost management across diverse cloud environments. The agency's adoption of cloud strategies and its ability to adapt to evolving cloud technologies are critical indicators of its management effectiveness. Specific contract performance reviews and internal audits would provide more granular insights.

What has been the historical spending trend for cloud services within U.S. Customs and Border Protection?

Historical spending trends for cloud services within U.S. Customs and Border Protection (CBP) likely reflect a broader government-wide shift towards cloud adoption. Initially, spending may have been focused on pilot programs or specific applications, gradually increasing as confidence and capabilities grew. The $44.3 million award for AWS services in 2021-2022 indicates a significant commitment to cloud infrastructure, suggesting a substantial increase in cloud spending compared to prior years. Analyzing CBP's IT budget over the past decade would reveal the trajectory of cloud investment relative to other IT expenditures, highlighting the growing importance of cloud solutions for their operational needs.

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 - PLATFORM

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

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: $48,166,182

Exercised Options: $44,346,642

Current Obligation: $44,346,642

Actual Outlays: $14,006,939

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSHQDC13D00003

IDV Type: IDC

Timeline