DHS awards $83M for Amazon Web Services via full and open competition, with 4 bidders

Contract Overview

Contract Amount: $83,172,707 ($83.2M)

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

Awarding Agency: Department of Homeland Security

Start Date: 2022-12-21

End Date: 2024-06-30

Contract Duration: 557 days

Daily Burn Rate: $149.3K/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: THE PURPOSE OF THIS ORDER IS TO PROCURE AMAZON WEB SERVICES.

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $83.2 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: THE PURPOSE OF THIS ORDER IS TO PROCURE AMAZON WEB SERVICES. Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a healthy market for cloud services. 3. Risk indicators appear low given the established nature of the service. 4. Performance context is a delivery order for cloud infrastructure. 5. Sector positioning within IT services, specifically cloud computing.

Value Assessment

Rating: good

The contract value of $83.2 million over approximately 1.8 years appears reasonable for enterprise-level cloud services. Benchmarking against similar large-scale cloud procurements by federal agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty for the government, contributing to good value.

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 a broad solicitation. Four bidders participated, suggesting a competitive environment for this type of service. The presence of multiple bidders generally supports price discovery and encourages competitive pricing.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition scenario.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from access to scalable cloud infrastructure. Essential IT services for border security and immigration operations are delivered. Geographic impact is nationwide, supporting CBP's operational footprint. Workforce implications include enabling CBP personnel with modern IT tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed price contract type provides cost predictability.
Established cloud service provider (AWS) likely ensures reliable performance.
Contract duration is defined, allowing for future re-evaluation.

Sector Analysis

This contract falls within the Information Technology sector, specifically cloud computing services. The federal government's spending on cloud services has grown significantly as agencies migrate from legacy systems to more flexible and scalable solutions. This procurement aligns with the broader trend of federal agencies leveraging commercial cloud providers for infrastructure and services, with the overall federal IT market being substantial.

Small Business Impact

The data does not indicate any specific small business set-aside or subcontracting requirements for this particular delivery order. As a large-scale cloud services contract, it is likely that the primary awardee, Amazon Web Services, manages its own subcontracting, potentially including opportunities for small businesses within its broader ecosystem, but this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Customs and Border Protection's contracting and program management offices. Transparency is facilitated by public contract databases like FPDS. Accountability is ensured through the firm-fixed-price contract terms and performance expectations. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Cloud Computing Services
IT Infrastructure Services
Amazon Web Services (AWS) Contracts
Department of Homeland Security IT Spending

Risk Flags

Potential for vendor lock-in with AWS.
Need for robust internal security practices to complement AWS security.
Risk of service disruption impacting critical DHS operations.
Ensuring data sovereignty and regulatory compliance within the cloud environment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $83.2 million to FOUR POINTS TECHNOLOGY, L.L.C.. THE PURPOSE OF THIS ORDER IS TO PROCURE AMAZON WEB SERVICES.

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 $83.2 million.

What is the period of performance?

Start: 2022-12-21. End: 2024-06-30.

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

Information regarding Four Points Technology, L.L.C.'s specific track record in delivering large-scale Amazon Web Services (AWS) cloud services is not detailed in the provided data. As a reseller or prime contractor for AWS, their role might be focused on contract management and procurement facilitation rather than direct service provision. Further investigation into their past performance on similar government contracts, particularly those involving cloud infrastructure, would be necessary to fully assess their capabilities and reliability in this specific context. Their ability to successfully manage this contract will depend on their established relationships with AWS and their internal project management processes.

How does the pricing of this AWS contract compare to other federal agencies' AWS procurements?

Direct comparison of the $83.2 million total award value to other federal AWS procurements requires access to detailed pricing structures and service levels for each contract. While the total value provides a general scale, it doesn't account for the specific services, usage volumes, or negotiated discounts. Agencies often leverage different AWS service tiers and commitment levels, leading to varied per-unit costs. However, given that this was awarded under full and open competition with four bidders, it suggests a competitive pricing environment. To perform a precise benchmark, one would need to compare specific service costs (e.g., per compute hour, per gigabyte of storage) and volume discounts negotiated across similar-sized federal AWS contracts.

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

The primary risks associated with relying on Amazon Web Services (AWS) for critical Department of Homeland Security (DHS) functions include vendor lock-in, potential security vulnerabilities (despite AWS's robust security measures), service disruptions or outages, and data sovereignty concerns. Vendor lock-in can make it difficult and costly to migrate to alternative providers in the future. While AWS invests heavily in security, the shared responsibility model means DHS must also maintain strong internal security practices. Service outages, though infrequent, could impact critical operations. Data sovereignty and compliance with U.S. regulations are paramount for DHS, requiring careful management of data location and access controls within the AWS environment.

How effective is the firm-fixed-price contract type for procuring dynamic cloud services like AWS?

The firm-fixed-price (FFP) contract type provides cost certainty for the government, which is a significant advantage. However, for dynamic cloud services like AWS, where usage can fluctuate and new services are constantly introduced, an FFP contract might not always be the most flexible or cost-effective. If usage significantly exceeds projections, the government might end up paying more than anticipated if the FFP is based on conservative estimates. Conversely, if usage is lower, the government might overpay if the contract is structured for high utilization. Often, cloud services are procured using a combination of FFP for base services and time-and-materials or other flexible pricing for variable usage to balance cost control with adaptability.

What is the historical spending trend for cloud services at U.S. Customs and Border Protection?

The provided data focuses on a single delivery order and does not offer historical spending trends for cloud services at U.S. Customs and Border Protection (CBP). However, it is widely understood that federal agencies, including DHS components like CBP, have been progressively increasing their investment in cloud computing over the past decade. This shift is driven by the need for greater agility, scalability, cost efficiency, and access to advanced technologies compared to traditional on-premise data centers. To understand CBP's historical spending, one would need to analyze multi-year contract data and budget allocations specifically for cloud services across various providers and categories.

What are the implications of 'full and open competition after exclusion of sources' for this contract?

The contract clause 'full and open competition after exclusion of sources' indicates that the solicitation was broadly advertised to all responsible sources, but certain specific sources were excluded from consideration. This exclusion is typically based on specific justifications, such as proprietary technology, unique capabilities, or prior performance issues, and must be documented and justified according to federal acquisition regulations. For taxpayers, this means that while competition was sought, the pool of potential bidders was intentionally narrowed. The justification for excluding sources is critical to ensure that the exclusion did not unduly limit competition or result in a higher price than would have been achieved with broader participation.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13221 WOODLAND PARK RD, HERNDON, VA, 20171

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: $97,672,130

Exercised Options: $83,172,707

Current Obligation: $83,172,707

Actual Outlays: $83,172,707

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC74B

IDV Type: GWAC

Timeline