DHS awards $27.8M task order for cloud services to Four Points Technology, LLC

Contract Overview

Contract Amount: $27,822,678 ($27.8M)

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

Awarding Agency: Department of Homeland Security

Start Date: 2021-09-24

End Date: 2023-07-15

Contract Duration: 659 days

Daily Burn Rate: $42.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS TASK ORDER FOR AMAZON WEB SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $27.8 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: THE PURPOSE OF THIS TASK ORDER FOR AMAZON WEB SERVICES Key points: 1. Task order awarded under a broad agency announcement for cloud computing services. 2. Contract type is Firm Fixed Price, indicating predictable costs for the government. 3. The contract duration is 659 days, spanning over 1.5 years. 4. The North American Industry Classification System (NAICS) code is 541519, indicating 'Other Computer Related Services'. 5. The place of performance is Washington D.C., a major hub for federal contracting. 6. This award represents a small portion of overall federal IT spending.

Value Assessment

Rating: fair

The total award amount of $27.8 million for cloud services over approximately 22 months suggests a monthly expenditure of around $1.26 million. Benchmarking this against similar cloud service contracts is challenging without more specific service details. However, given the nature of cloud services, the pricing is likely competitive if it aligns with market rates for comparable infrastructure and support. The firm fixed price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This indicates that while the initial solicitation was open, specific exclusions were applied, potentially limiting the pool of eligible bidders. The number of bidders is not specified, making it difficult to fully assess the level of competition. A limited competition could lead to less aggressive pricing compared to a truly full and open process.

Taxpayer Impact: The limited competition may have resulted in a higher price for taxpayers than if a broader range of vendors had been able to bid.

Public Impact

The Department of Homeland Security (DHS) benefits from enhanced cloud computing capabilities. Services delivered likely include cloud infrastructure, storage, and potentially managed services to support DHS operations. The geographic impact is primarily within Washington D.C., where the place of performance is located. The contract supports the technology sector by engaging a service provider for essential IT functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could reduce price discovery and potentially increase costs for the government.
The specific nature of 'Other Computer Related Services' is broad and may obscure the exact value proposition.
Lack of detail on performance metrics makes it hard to assess the effectiveness of the service delivery.

Positive Signals

Firm Fixed Price contract provides cost certainty for the duration of the task order.
Awarded to a specific entity, indicating a clear point of accountability for service delivery.
The contract falls under a broader agency announcement, suggesting a strategic approach to cloud procurement.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on cloud computing services. The federal government's spending on cloud services has been steadily increasing as agencies migrate from on-premises infrastructure to more flexible and scalable cloud solutions. Comparable spending benchmarks for cloud services vary widely based on the scope of services (IaaS, PaaS, SaaS) and the specific cloud provider. However, the $27.8 million award is a significant, though not exceptionally large, investment for a task order of this duration.

Small Business Impact

The provided data does not indicate if this contract involved small business set-asides or subcontracting opportunities. The awardee, Four Points Technology, LLC, is a small business, which could mean this task order was part of a strategy to award to smaller entities. However, without explicit information on set-aside status or subcontracting plans, its direct impact on the broader small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this task order would typically fall under the Department of Homeland Security's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is facilitated by federal procurement databases where such awards are reported. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Cloud Computing Services
IT Professional Services
Department of Homeland Security IT Contracts
General Services Administration (GSA) Schedules (if applicable)
IT Infrastructure Support

Risk Flags

Limited competition may impact price discovery.
Broad NAICS code lacks specificity on services.
Performance metrics not detailed in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $27.8 million to FOUR POINTS TECHNOLOGY, L.L.C.. THE PURPOSE OF THIS TASK ORDER FOR 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 (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $27.8 million.

What is the period of performance?

Start: 2021-09-24. End: 2023-07-15.

What is the specific nature of the 'Other Computer Related Services' being provided under this task order?

The task order's purpose is described as 'THE PURPOSE OF THIS TASK ORDER FOR AMAZON WEB SERVICES'. This strongly suggests the services relate to cloud computing infrastructure, platform, or software services provided by Amazon Web Services (AWS). The NAICS code 541519 ('Other Computer Related Services') is broad and can encompass a wide range of IT services beyond traditional software development or hardware maintenance. In this context, it likely includes the provisioning, management, and support of cloud resources, such as virtual servers, storage, databases, and networking components hosted on AWS. Without the full statement of work, the precise breakdown of services remains unspecified, but the reference to AWS points towards cloud infrastructure and related support.

How does the $27.8 million award compare to similar cloud service contracts awarded by DHS or other agencies?

Comparing the $27.8 million award for cloud services requires context regarding the duration and scope. This task order spans approximately 22 months (659 days), equating to an average annual spend of roughly $15.2 million. Federal agencies procure cloud services through various vehicles, including large enterprise agreements, agency-specific contracts, and task orders under indefinite-delivery/indefinite-quantity (IDIQ) contracts. While $15.2 million annually is a substantial amount, it is not uncommon for large federal agencies like DHS to have significant cloud expenditures. For instance, other agencies have awarded multi-year cloud contracts in the tens or hundreds of millions of dollars. The specific value proposition depends heavily on the services rendered (e.g., IaaS, PaaS, SaaS, managed services) and the level of support required. Without a detailed breakdown of services and performance metrics, a precise value comparison is difficult.

What are the key risks associated with this contract, and how are they mitigated?

Key risks for this contract include potential vendor lock-in with AWS, performance issues impacting critical DHS operations, and cost overruns if usage exceeds projections (though less likely with FFP). Vendor lock-in is a common concern with cloud services, mitigated by strategic multi-cloud approaches or clear exit strategies. Performance risks are managed through Service Level Agreements (SLAs) within the task order, which Four Points Technology, LLC would be obligated to meet. Cost certainty is provided by the Firm Fixed Price (FFP) structure, reducing the risk of unexpected expenditure increases for the defined scope. However, scope creep or unforeseen technical challenges could still pose risks, necessitating robust contract management and oversight from DHS.

What is the track record of Four Points Technology, LLC in delivering cloud services to the federal government?

Four Points Technology, LLC is a small business that has secured various federal contracts, often as a reseller or prime contractor for IT solutions. Their contract history indicates experience in providing IT hardware, software, and services to government agencies. While specific details on their performance in delivering large-scale cloud services like those potentially implied by this task order are not immediately available from the provided data, their status as a prime awardee suggests they have met the necessary qualifications and past performance requirements to secure this $27.8 million task order. Further investigation into their past performance reviews and contract completion records would provide a more definitive assessment.

How does the competition level ('Full and Open Competition After Exclusion of Sources') impact the overall value for taxpayers?

The competition level, 'Full and Open Competition After Exclusion of Sources,' presents a mixed picture for taxpayer value. 'Full and Open' generally implies a broad solicitation, which should theoretically drive competitive pricing. However, the 'Exclusion of Sources' clause indicates that certain potential bidders were deliberately excluded from the competition. The reasons for these exclusions are not provided but could be based on specific technical requirements, past performance issues, or other criteria. If the exclusions significantly narrowed the field of qualified bidders, it could reduce the competitive pressure, potentially leading to higher prices than a truly unrestricted competition. Conversely, if the exclusions were narrowly tailored to ensure only highly qualified vendors could compete for a specialized service, it might still yield good value, albeit with less price pressure.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70RTAC21Q00000061

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14900 CONFERENCE CENTER DR STE 100, CHANTILLY, VA, 20151

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: $31,573,600

Exercised Options: $27,822,678

Current Obligation: $27,822,678

Actual Outlays: $15,854,523

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSHQDC13D00003

IDV Type: IDC

Timeline