DHS awards $334M for datacenter support, raising questions on competition and value

Contract Overview

Contract Amount: $334,279,077 ($334.3M)

Contractor: Csra LLC

Awarding Agency: Department of Homeland Security

Start Date: 2019-05-01

End Date: 2021-06-30

Contract Duration: 791 days

Daily Burn Rate: $422.6K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE DATACENTERS OPERATIONAL AND MAINTENANCE SUPPORT SERVICES

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $334.3 million to CSRA LLC for work described as: IGF::CT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE DATACENTERS OPERATIONAL AND MAINTENANCE SUPPORT SERVICES Key points: 1. Significant contract value for IT infrastructure support. 2. Sole-source award limits price discovery and potentially increases costs. 3. Contract duration of nearly two years suggests ongoing need for services. 4. Focus on operational and maintenance support indicates critical infrastructure reliance. 5. Geographic concentration in Virginia highlights a key federal IT hub. 6. Lack of small business set-aside may limit opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract's value of over $334 million for datacenter operational and maintenance support is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar government contracts. The 'Time and Materials' contract type can sometimes lead to cost overruns if not closely managed, especially for services with undefined scopes. Further analysis of the specific services rendered and their necessity would be required to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, CSRA LLC, was solicited. This approach bypasses the standard competitive procurement process, which typically involves multiple bidders vying for the contract. While sole-source awards are permissible under certain circumstances (e.g., urgency, unique capabilities), they generally result in less price competition and may not secure the best possible pricing for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process, potentially leading to higher overall expenditure for these services.

Public Impact

The Department of Homeland Security (DHS) benefits from continuous operational support for its critical datacenters. Essential IT infrastructure services are maintained, ensuring the availability of government systems. The primary geographic impact is within Virginia, a major hub for federal IT operations. The contract supports the workforce employed by CSRA LLC in providing these specialized IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award raises concerns about transparency and fairness in procurement.
Potential for cost overruns due to Time and Materials contract type.
Limited visibility into the specific performance metrics and outcomes.

Positive Signals

Ensures continuity of critical datacenter operations for DHS.
CSRA LLC is an established contractor with experience in government IT services.
The contract addresses a clear need for ongoing IT infrastructure support.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on datacenter operations and maintenance. The market for such services is large and competitive, with numerous providers offering specialized solutions. However, government IT procurement often involves unique requirements and security protocols. Benchmarking this contract's value would ideally involve comparing it to other large-scale government IT support contracts, particularly those for similar infrastructure management services.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means opportunities for small businesses to participate in delivering these critical datacenter services are likely limited. The absence of a small business focus in this substantial award could impact the broader small business IT ecosystem that relies on government contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's internal contracting and program management offices. The Inspector General's office for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award; however, contract modifications and performance reports, if publicly available, could offer further insights into its execution.

Related Government Programs

DHS IT Infrastructure Support Contracts
Federal Datacenter Consolidation Program
IT Operations and Maintenance Services
Cloud Computing Services (as an alternative/complement)

Risk Flags

Sole-source award
Time and Materials pricing
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $334.3 million to CSRA LLC. IGF::CT::IGF THE PURPOSE OF THIS TASK ORDER IS TO PROCURE DATACENTERS OPERATIONAL AND MAINTENANCE SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CSRA LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $334.3 million.

What is the period of performance?

Start: 2019-05-01. End: 2021-06-30.

What is the track record of CSRA LLC in providing similar datacenter operational and maintenance support services to the federal government?

CSRA LLC, now part of General Dynamics Information Technology (GDIT), has a significant history of providing IT services to various federal agencies, including the Department of Homeland Security. Their experience encompasses a broad range of IT support, including infrastructure management, cybersecurity, and application development. For datacenter operations and maintenance, CSRA/GDIT has managed complex environments, ensuring uptime, security, and efficiency. Their past performance on similar contracts would be a key factor in the agency's decision to award this task order, even on a sole-source basis, suggesting a perceived capability to meet DHS's specific needs. However, a detailed review of past performance evaluations and any associated issues would be necessary for a comprehensive assessment.

How does the awarded amount of $334 million compare to similar federal datacenter support contracts?

The $334 million awarded to CSRA LLC for datacenter operational and maintenance support is a substantial figure, reflecting the critical nature and scale of services required by the Department of Homeland Security. To benchmark this value, one would typically compare it against other large-scale IT infrastructure support contracts awarded by federal agencies. For instance, contracts for managing large enterprise datacenters, cloud migration support, or comprehensive IT managed services can range from tens to hundreds of millions of dollars over their performance periods. Without knowing the exact scope, duration, and specific services included in this DHS contract, a precise comparison is difficult. However, given the sole-source nature and the 'Time and Materials' pricing model, there's a potential for this contract to be less cost-effective than a competitively bid fixed-price contract for similar services.

What are the primary risks associated with a sole-source award for critical IT infrastructure services?

The primary risks associated with a sole-source award for critical IT infrastructure services like datacenter operations and maintenance include a lack of price competition, which can lead to higher costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or offer the most cost-effective solutions, as they face no direct competition. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially limiting the pool of qualified vendors and hindering market innovation. If the sole-source contractor underperforms or faces financial difficulties, the government has limited alternatives for ensuring service continuity without a lengthy and potentially disruptive re-procurement process.

What specific IT services are encompassed by 'datacenter operational and maintenance support' in this context?

'Datacenter operational and maintenance support' typically encompasses a wide array of services essential for the functioning of physical and virtualized IT infrastructure. This includes ensuring the continuous availability and reliability of servers, storage systems, and networking equipment. Maintenance involves routine checks, hardware repairs, software patching, and system upgrades. Operational support often covers monitoring system performance, managing power and cooling, ensuring physical security of the facility, and responding to incidents or outages. For a large agency like DHS, this could also extend to managing virtual environments, backup and disaster recovery operations, and ensuring compliance with security mandates within the datacenter.

What is the significance of the contract being awarded in Virginia, a known federal IT hub?

The concentration of federal IT contracts and operations in Virginia is significant for several reasons. Firstly, it reflects the proximity of major federal agencies to Washington D.C., facilitating communication and oversight. Secondly, Virginia has developed a robust ecosystem of IT companies, skilled labor, and supporting infrastructure catering to government needs. Awarding this datacenter support contract in Virginia likely leverages this existing infrastructure and talent pool, potentially leading to more efficient service delivery and easier access for government personnel. It also means that a substantial portion of federal IT spending is geographically concentrated, impacting regional economies and the competitive landscape within the federal IT contracting market.

How does the 'Time and Materials' (T&M) contract type influence cost control for this service?

The 'Time and Materials' (T&M) contract type can present challenges for cost control, especially for services like datacenter operations and maintenance where the scope of work can fluctuate. In a T&M contract, the government pays the contractor for the direct labor hours at specified hourly rates and for the actual cost of materials used. While this can be flexible for evolving needs, it lacks the cost certainty of fixed-price contracts. Without stringent oversight, detailed work tracking, and well-defined labor categories, T&M contracts can lead to cost overruns if labor hours or material costs are higher than anticipated. Effective management requires diligent monitoring of hours billed and justification for materials purchased to ensure value for money.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $334,279,077

Exercised Options: $334,279,077

Current Obligation: $334,279,077

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $19,178,751

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: HSHQDC16D00001

IDV Type: IDC

Timeline