DHS awards $5.5M for IT expertise, but competition and value warrant scrutiny

Contract Overview

Contract Amount: $5,491,865 ($5.5M)

Contractor: SRI International

Awarding Agency: Department of Homeland Security

Start Date: 2022-10-01

End Date: 2026-03-30

Contract Duration: 1,276 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TO AWARD A TASK ORDER CONTRACT TO PROCURE A NEW TASK ORDER FOR INNOVATION AND TECHNOLOGY SUBJECT MATTER EXPERTISE (ITSME) SUPPORT SERVICES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $5.5 million to SRI INTERNATIONAL for work described as: TO AWARD A TASK ORDER CONTRACT TO PROCURE A NEW TASK ORDER FOR INNOVATION AND TECHNOLOGY SUBJECT MATTER EXPERTISE (ITSME) SUPPORT SERVICES. Key points: 1. Contract awarded via full and open competition, suggesting a broad search for qualified vendors. 2. The contract's duration of over three years indicates a need for sustained support. 3. Task order for innovation and technology subject matter expertise highlights a focus on advanced capabilities. 4. The administrative management and general management consulting services NAICS code may not fully capture the specialized IT expertise required. 5. The contract's Time and Materials pricing structure can pose risks if not closely managed. 6. Small business participation is not explicitly mandated, raising questions about broader economic impact.

Value Assessment

Rating: fair

The contract's value of $5.5 million over approximately 3.5 years averages around $1.57 million annually. Benchmarking this against similar contracts for IT subject matter expertise is challenging without more specific service details. However, the Time and Materials (T&M) pricing model, while common for evolving needs, can lead to cost overruns if not meticulously monitored. The absence of a fixed price or performance-based elements makes it harder to definitively assess value for money at this stage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of Homeland Security sought proposals from all responsible sources. While the data shows two bids were received, the number of bidders is relatively low for a full and open competition, which could suggest potential limitations in the market for these specific services or a narrow interpretation of the requirement. This level of competition may not have driven the most aggressive pricing.

Taxpayer Impact: A low number of bids in a full and open competition can mean taxpayers may not be receiving the most competitive pricing possible, as the vendor pool was not fully leveraged.

Public Impact

The Department of Homeland Security benefits from specialized IT expertise to support innovation and technology initiatives. Services delivered are expected to enhance the agency's technological capabilities and strategic planning. The contract's impact is primarily within the federal government, specifically the Department of Homeland Security. Workforce implications are likely to involve specialized IT consultants rather than a broad hiring initiative.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to Time and Materials pricing structure.
Low number of bids received under full and open competition may indicate limited market engagement or specialized niche.
NAICS code 541611 (Administrative Management and General Management Consulting Services) might not precisely align with the 'Innovation and Technology Subject Matter Expertise' requirement, potentially leading to misaligned service delivery or oversight.

Positive Signals

Awarded through full and open competition, ensuring a broad search for qualified contractors.
Contract duration suggests a recognized need for ongoing, critical support.
Focus on innovation and technology expertise aligns with modern government needs.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically consulting. The market for IT subject matter expertise is robust, with numerous firms offering specialized knowledge. However, the specific niche of 'innovation and technology' within a large federal agency like DHS suggests a specialized segment. Comparable spending benchmarks would depend heavily on the exact nature of the expertise sought, but federal spending on IT consulting services is in the billions annually.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false) and the contract was not awarded to a small business (sb: false). This suggests that the competition was likely dominated by larger firms. There is no explicit mention of subcontracting requirements for small businesses, which could limit opportunities for smaller entities to participate in this specific contract's execution and potentially impact the broader small business ecosystem in this specialized IT consulting area.

Oversight & Accountability

Oversight for this task order would typically fall under the contracting officer's representative (COR) within the Department of Homeland Security. The Time and Materials pricing structure necessitates rigorous monitoring of labor hours and costs to prevent overspending. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. However, specific details on internal accountability measures or Inspector General (IG) involvement would require deeper access to agency-specific oversight protocols.

Related Government Programs

IT Consulting Services
Management and Technical Consulting
Federal IT Modernization Programs
Department of Homeland Security Technology Investments

Risk Flags

Low bid count in full and open competition
Time and Materials pricing structure
Potential NAICS code misalignment

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $5.5 million to SRI INTERNATIONAL. TO AWARD A TASK ORDER CONTRACT TO PROCURE A NEW TASK ORDER FOR INNOVATION AND TECHNOLOGY SUBJECT MATTER EXPERTISE (ITSME) SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is SRI INTERNATIONAL.

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 $5.5 million.

What is the period of performance?

Start: 2022-10-01. End: 2026-03-30.

What is the specific expertise SRI INTERNATIONAL is expected to provide under this task order, and how does it align with the NAICS code?

The task order aims to procure 'Innovation and Technology Subject Matter Expertise (ITSME) Support Services.' While the NAICS code 541611 covers 'Administrative Management and General Management Consulting Services,' the description points towards a more specialized IT focus. ITSME likely involves advising on emerging technologies, digital transformation strategies, cybersecurity innovation, and technology roadmapping. The alignment with the NAICS code might be broad, encompassing the management and strategic advisory aspects of technology implementation rather than purely technical execution. Further clarification from DHS would be needed to precisely delineate the scope and ensure it fully leverages the contractor's specialized IT knowledge within the broader consulting framework.

How does the $5.5 million award compare to similar IT consulting contracts for subject matter expertise within DHS or other federal agencies?

Direct comparison of the $5.5 million award for IT Subject Matter Expertise (ITSME) is challenging without granular data on the specific services rendered and the duration of comparable contracts. Federal spending on IT consulting is substantial, often running into tens or hundreds of millions for large-scale projects. However, for specialized advisory roles, this figure appears moderate for a contract spanning over three years. Factors influencing comparison include the level of seniority of the experts, the criticality of the innovation areas, and the specific agency's budget allocation for such services. A more precise benchmark would require analyzing contracts with similar NAICS codes and explicit descriptions of 'innovation and technology expertise' support.

What are the primary risks associated with the Time and Materials (T&M) pricing structure for this contract?

The primary risk with a Time and Materials (T&M) contract is the potential for cost escalation if not managed stringently. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure can incentivize longer project durations or higher labor hours if oversight is lax, as the contractor's profit is tied to effort rather than a defined outcome. For this $5.5 million contract, DHS must ensure robust monitoring of hours, rates, and material costs, coupled with clear performance expectations, to mitigate the risk of exceeding the ceiling price without commensurate value delivery.

Given only two bids were received, what does this suggest about the competition for specialized IT expertise within the federal market?

Receiving only two bids under a 'full and open competition' for specialized IT expertise suggests several possibilities. Firstly, the niche may be highly specialized, with only a few firms possessing the requisite qualifications and capacity, such as SRI INTERNATIONAL. Secondly, the solicitation requirements might have been perceived as overly complex or restrictive, deterring other potential bidders. Alternatively, the estimated value or duration might not have been sufficiently attractive to a broader market. This limited competition could imply that the government did not achieve the full benefit of a robust bidding process, potentially impacting price discovery and the range of innovative solutions considered.

What are the potential implications for SRI INTERNATIONAL's past performance record given this is a delivery order?

This award is a delivery order, implying it is a task order issued under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. SRI INTERNATIONAL's past performance on the parent contract, or on previous similar contracts, would have been a critical evaluation factor during the initial award of that vehicle. For this specific delivery order, the agency likely assessed SRI INTERNATIONAL's ability to perform the required ITSME services based on their demonstrated capabilities and track record. Any issues or successes on this delivery order will contribute to SRI INTERNATIONAL's overall past performance record, influencing future federal contract awards.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70RSAT22Q00000027

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 333 RAVENSWOOD AVE, MENLO PARK, CA, 94025

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

Financial Breakdown

Contract Ceiling: $10,151,618

Exercised Options: $6,538,009

Current Obligation: $5,491,865

Actual Outlays: $4,944,764

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $320,033

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47QRAA21D002R

IDV Type: FSS

Timeline