DHS Awards $19.7M for Pen-Link Software Suite, Lacking Competition

Contract Overview

Contract Amount: $19,735,670 ($19.7M)

Contractor: Pen-Link, Ltd

Awarding Agency: Department of Homeland Security

Start Date: 2022-07-01

End Date: 2026-06-30

Contract Duration: 1,460 days

Daily Burn Rate: $13.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FOR PEN-LINK SOFTWARE SUITE FOR 500 USERS, TRAINING, MAINTENANCE AND SUPPORT AND ENGINEERING SERVICES

Place of Performance

Location: LINCOLN, LANCASTER County, NEBRASKA, 68516

State: Nebraska Government Spending

Plain-Language Summary

Department of Homeland Security obligated $19.7 million to PEN-LINK, LTD for work described as: FOR PEN-LINK SOFTWARE SUITE FOR 500 USERS, TRAINING, MAINTENANCE AND SUPPORT AND ENGINEERING SERVICES Key points: 1. Significant investment in specialized software for immigration enforcement. 2. Sole-source award raises concerns about price discovery and value. 3. Long-term contract (4 years) with potential for cost overruns. 4. IT sector spending, with a focus on software publishers.

Value Assessment

Rating: questionable

The contract price of $19.7M for 500 users over 4 years appears high given the lack of competitive bidding. Benchmarking against similar software suites is difficult without more data, but the absence of competition suggests potential overpayment.

Cost Per Unit: $10,800 per user per year (approximate)

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to achieve the best possible price.

Taxpayer Impact: The lack of competition on this nearly $20M contract means taxpayers may have paid a premium for the software, training, and support.

Public Impact

Enhances capabilities for U.S. Immigration and Customs Enforcement (ICE) operations. Supports 500 users, indicating widespread use within the agency. Includes training, maintenance, and support, ensuring ongoing operational readiness. Long-term commitment suggests critical reliance on this software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Long-term contract duration

Positive Signals

Provides critical software for national security functions
Includes comprehensive support and maintenance

Sector Analysis

This contract falls within the IT sector, specifically software publishers. Government spending on software licenses, maintenance, and support is substantial, with a trend towards specialized solutions for agency-specific needs.

Small Business Impact

The contract was awarded to Pen-Link, Ltd., a specific company, and there is no indication of subcontracting opportunities for small businesses in the provided data. The sole-source nature further limits potential small business involvement.

Oversight & Accountability

The Department of Homeland Security, through ICE, awarded this contract. Oversight would typically involve contract performance monitoring and financial reviews, but the sole-source nature warrants closer scrutiny of cost-effectiveness.

Related Government Programs

Software Publishers
Department of Homeland Security Contracting
U.S. Immigration and Customs Enforcement Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of market pressure.
Long contract duration increases risk of cost escalation.
Lack of transparency in pricing justification.
Limited visibility into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $19.7 million to PEN-LINK, LTD. FOR PEN-LINK SOFTWARE SUITE FOR 500 USERS, TRAINING, MAINTENANCE AND SUPPORT AND ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is PEN-LINK, LTD.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2022-07-01. End: 2026-06-30.

What is the justification for the sole-source award, and has a market research report been conducted to confirm the lack of alternatives?

The justification for a sole-source award is crucial for ensuring fair pricing and taxpayer value. Without a competitive process, it's imperative that the agency has thoroughly documented why only Pen-Link, Ltd. could meet the specific requirements. This typically involves demonstrating unique capabilities or essentiality that cannot be replicated by other vendors, supported by market research.

How does the per-unit cost compare to industry benchmarks for similar software suites, considering the included training and support?

Benchmarking the per-unit cost of $10,800 annually is challenging without detailed feature comparisons. However, for enterprise software, this figure could be within a reasonable range if it includes advanced analytics, real-time data integration, and comprehensive, 24/7 support. A thorough analysis would require comparing feature sets and service level agreements against commercially available alternatives.

What are the key performance indicators (KPIs) for this contract, and how will contract performance be measured to ensure effectiveness and value?

Key performance indicators should focus on software uptime, data accuracy, response times for support, and successful integration with existing systems. Effectiveness will be measured by how well the software supports ICE's mission objectives, such as improved data analysis or case management efficiency. Regular performance reviews and user feedback mechanisms are essential for accountability.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - SECURITY AND COMPLIANCE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70CMSD22Q00000013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5936 VANDERVOORT DR, LINCOLN, NE, 68516

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

Financial Breakdown

Contract Ceiling: $25,380,648

Exercised Options: $19,735,670

Current Obligation: $19,735,670

Actual Outlays: $14,448,928

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline