DHS awards $6.7M for FEMA IT sustainment to Digital Systems Group, Inc. under a sole-source contract

Contract Overview

Contract Amount: $6,755,745 ($6.8M)

Contractor: Digital Systems Group, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2024-12-07

End Date: 2026-12-06

Contract Duration: 729 days

Daily Burn Rate: $9.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: WEBIFMIS IDIQ - SUSTAINMENT & ENHANCEMENT TASK ORDER OPTION PERIOD ONE (1)

Place of Performance

Location: HORSHAM, MONTGOMERY County, PENNSYLVANIA, 19044

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Homeland Security obligated $6.8 million to DIGITAL SYSTEMS GROUP, INC for work described as: WEBIFMIS IDIQ - SUSTAINMENT & ENHANCEMENT TASK ORDER OPTION PERIOD ONE (1) Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Task order option period represents ongoing IT sustainment and enhancement. 3. Firm Fixed Price contract type offers cost certainty but may not capture efficiencies. 4. Performance period of two years suggests a need for sustained IT support. 5. Contract awarded by FEMA, a key agency within the Department of Homeland Security. 6. The North American Industry Classification System (NAICS) code 541511 indicates custom computer programming services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar custom computer programming services. The firm fixed price structure provides cost predictability for the agency. However, the lack of competition raises questions about whether the pricing reflects the best possible value for the taxpayer. Further analysis would require understanding the specific scope of work and the contractor's historical performance and pricing trends.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances do not permit full and open competition. The lack of competition means that price discovery through a bidding process was not utilized, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the opportunity for the government to secure the most cost-effective solution.

Public Impact

Federal Emergency Management Agency (FEMA) personnel benefit from enhanced and sustained IT systems. Services delivered include custom computer programming, sustainment, and enhancement of IT infrastructure. The geographic impact is primarily within the operational scope of FEMA, likely nationwide. Workforce implications include the potential for continued employment for IT professionals at Digital Systems Group, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source awards can reduce transparency and accountability.
Reliance on a single vendor could pose future supply chain risks.

Positive Signals

Contract ensures continuity of critical IT services for FEMA.
Firm fixed price provides budget certainty for the agency.
Digital Systems Group, Inc. likely has specialized knowledge of FEMA's systems.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The IT services market is highly dynamic, with significant government spending allocated to software development, maintenance, and enhancement. Comparable spending benchmarks for custom programming services vary widely based on complexity, scope, and contractor expertise. This contract represents a portion of the broader federal IT spending aimed at maintaining and improving agency operational capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. There is no explicit information provided regarding subcontracting plans for small businesses. The award to a single, likely established, vendor may limit opportunities for small businesses to participate in this specific contract's execution, though they may be involved in other aspects of FEMA's IT ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices, as well as the Federal Emergency Management Agency (FEMA). The contract's firm fixed price nature and defined performance period provide a degree of accountability. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

FEMA IT Modernization Efforts
Department of Homeland Security IT Services
Custom Computer Programming Services Contracts
Federal IT Sustainment Contracts

Risk Flags

Sole-source award justification
Potential for cost overruns without competition
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $6.8 million to DIGITAL SYSTEMS GROUP, INC. WEBIFMIS IDIQ - SUSTAINMENT & ENHANCEMENT TASK ORDER OPTION PERIOD ONE (1)

Who is the contractor on this award?

The obligated recipient is DIGITAL SYSTEMS GROUP, INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $6.8 million.

What is the period of performance?

Start: 2024-12-07. End: 2026-12-06.

What is the track record of Digital Systems Group, Inc. with the federal government, particularly with FEMA?

Information regarding the specific track record of Digital Systems Group, Inc. with the federal government, and FEMA in particular, is not detailed in the provided data. A comprehensive analysis would require reviewing past performance evaluations, contract history, and any reported issues or successes. Generally, agencies consider past performance as a critical factor in award decisions, especially for sole-source contracts where continuity and proven capability are paramount. Without specific data, it's presumed that FEMA has a basis for awarding this sole-source contract, potentially based on prior positive engagements or unique qualifications.

How does the $6.7 million value compare to similar custom computer programming services contracts awarded by FEMA or other DHS components?

Direct comparison of the $6.7 million value to similar custom computer programming services contracts is difficult without access to a broader dataset of federal procurements, especially sole-source awards. The value of IT sustainment and enhancement contracts can vary significantly based on the complexity of the systems, the scope of services, and the duration of the contract. For a two-year period, $6.7 million suggests a substantial scope of work. However, without specific benchmarks for comparable sole-source contracts for similar services within FEMA or DHS, it's challenging to definitively assess if this represents a competitive price point or a fair market value.

What are the primary risks associated with this sole-source contract for FEMA?

The primary risks associated with this sole-source contract for FEMA include potential overpricing due to the absence of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of vendor flexibility should FEMA's needs evolve significantly. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. Furthermore, sole-source awards can sometimes face scrutiny regarding the justification for not competing the requirement, potentially impacting public perception and accountability if not adequately documented.

How effective is the firm fixed price (FFP) contract type in ensuring value for money for custom computer programming services?

The Firm Fixed Price (FFP) contract type aims to ensure value for money by shifting the risk of cost overruns to the contractor. For custom computer programming services, FFP can be effective when the scope of work is well-defined and unlikely to change significantly. This provides budget certainty for the government. However, if the scope is not precisely defined or if unforeseen technical challenges arise, the contractor may be incentivized to cut corners to maintain profitability, potentially impacting quality. Conversely, if the contractor is highly efficient, they retain the profit, which might mean the government overpaid if the initial price was set too high.

What is the historical spending pattern for sustainment and enhancement of IT systems by FEMA?

The provided data does not include historical spending patterns for FEMA's IT sustainment and enhancement. To assess this, one would need to analyze past contract awards for similar services over several fiscal years. Understanding historical spending would allow for trend analysis, identification of potential cost increases or decreases, and a better evaluation of whether current spending aligns with past investments and program needs. It would also help in determining if there's a pattern of sole-source awards for these types of services.

What are the implications of the 729-day duration for this task order option period?

The 729-day duration, approximately two years, for this task order option period indicates a need for sustained and ongoing support for FEMA's IT systems. This duration suggests that the services required are not short-term or project-based but rather integral to the continuous operation and improvement of critical IT infrastructure. For the contractor, it provides a stable revenue stream. For FEMA, it ensures continuity of services, allowing them to focus on their core mission without frequent disruptions related to IT support procurement.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 400 HORSHAM RD STE 120, HORSHAM, PA, 19044

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,630,081

Exercised Options: $12,630,081

Current Obligation: $6,755,745

Actual Outlays: $4,666,286

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70FA3124D00000001

IDV Type: IDC

Timeline