DHS awards $13.8M IT hardware BPA call to Sterling Computers, bypassing competition

Contract Overview

Contract Amount: $13,803,130 ($13.8M)

Contractor: Sterling Computers Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2024-09-27

End Date: 2025-09-26

Contract Duration: 364 days

Daily Burn Rate: $37.9K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BPA ORDER OF VARIOUS IT HARDWARE (COMPUTERS, LAPTOPS, MONITORS, TABLETS AND RELATED PERIPHERALS)

Place of Performance

Location: NORTH SIOUX CITY, UNION County, SOUTH DAKOTA, 57049

State: South Dakota Government Spending

Plain-Language Summary

Department of Homeland Security obligated $13.8 million to STERLING COMPUTERS CORPORATION for work described as: BPA ORDER OF VARIOUS IT HARDWARE (COMPUTERS, LAPTOPS, MONITORS, TABLETS AND RELATED PERIPHERALS) Key points: 1. Value for money is unclear due to lack of competition. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery. 3. Risk indicators include the non-competitive nature of the award. 4. Performance context is a one-year BPA call for IT hardware. 5. Sector positioning is within the broader IT hardware procurement landscape.

Value Assessment

Rating: questionable

The contract value of $13.8 million for IT hardware over one year warrants scrutiny due to the lack of a competitive bidding process. Without comparison to other bids or market rates for similar configurations, it is difficult to ascertain if the pricing represents a fair market value. The firm fixed-price structure offers some cost certainty, but the absence of competition raises concerns about potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a BPA call. The data indicates it was a sole-source award, meaning Sterling Computers Corporation was the only vendor considered. This lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Taxpayers may not be receiving the most cost-effective solution when contracts are awarded without competition, as the potential for lower prices through bidding is forgone.

Public Impact

The Department of Homeland Security, specifically the Transportation Security Administration, will benefit from the acquisition of necessary IT hardware. Services delivered include the provision of computers, laptops, monitors, tablets, and related peripherals. The geographic impact is focused on South Dakota, where the contract is administered. Workforce implications are indirect, supporting the operational needs of TSA personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to suboptimal pricing.
Sole-source awards can reduce transparency in procurement.
Reliance on a single vendor for critical IT hardware could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty for the awarded amount.
BPA call structure allows for efficient ordering of specific IT needs.
Award to an established vendor may ensure timely delivery of equipment.

Sector Analysis

This contract falls within the Information Technology sector, specifically the procurement of electronic computer manufacturing and related peripherals. The IT hardware market is highly competitive, with numerous vendors offering a wide range of products. Benchmarking this contract's value is challenging without competitive data, but typical government IT hardware procurements often involve multiple bids to secure favorable pricing.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from this specific award. The focus remains on the prime contractor, Sterling Computers Corporation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's procurement oversight mechanisms. As a BPA call, it is part of a larger framework, and its execution is subject to the terms of the base BPA. Transparency is limited by the non-competitive nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Hardware Procurement
Blanket Purchase Agreements (BPAs)
Department of Homeland Security IT Spending
Transportation Security Administration Technology

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $13.8 million to STERLING COMPUTERS CORPORATION. BPA ORDER OF VARIOUS IT HARDWARE (COMPUTERS, LAPTOPS, MONITORS, TABLETS AND RELATED PERIPHERALS)

Who is the contractor on this award?

The obligated recipient is STERLING COMPUTERS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $13.8 million.

What is the period of performance?

Start: 2024-09-27. End: 2025-09-26.

What is Sterling Computers Corporation's track record with federal IT hardware contracts?

Sterling Computers Corporation has a history of receiving federal contracts, primarily for IT hardware. While specific details on past performance metrics for this vendor are not provided in this data snippet, their ability to secure this BPA call suggests a level of established presence and capability within the federal IT procurement landscape. Further analysis would require examining their contract history across various agencies, including on-time delivery rates, product quality feedback, and any past performance issues or commendations. Understanding their broader federal footprint can provide context for their current award, even if this specific instance lacks competitive validation.

How does the $13.8 million value compare to similar IT hardware procurements by DHS or TSA?

Direct comparison of the $13.8 million value is difficult without knowing the exact specifications and quantities of IT hardware procured. However, for a one-year duration, this represents a significant investment. Government-wide, IT hardware procurements can range from tens of thousands to hundreds of millions of dollars, depending on the scope. For agencies like DHS and TSA, which require substantial IT infrastructure, such an amount is not unusual for equipping personnel or replacing aging equipment. The key concern here is not the absolute dollar amount, but the lack of competitive bidding, which prevents a definitive assessment of whether this represents good value compared to what could have been achieved through a competitive process.

What are the primary risks associated with awarding IT hardware contracts on a sole-source basis?

The primary risks associated with sole-source IT hardware contracts include inflated pricing, reduced product quality or service, and limited innovation. Without competition, the vendor has less incentive to offer the most competitive prices or the latest technology. There's also a risk of vendor lock-in, where the agency becomes dependent on a single supplier, potentially leading to higher costs in future procurements. Furthermore, sole-source awards can create a perception of unfairness and may not align with principles of government-wide best practices for maximizing taxpayer value. The lack of transparency in price negotiation is also a significant concern.

How effective is the BPA call mechanism for acquiring IT hardware for agencies like TSA?

Blanket Purchase Agreements (BPAs) are designed to streamline the procurement of commonly purchased items or services, including IT hardware. A BPA call, which is an order against an existing BPA, allows agencies to quickly acquire needed goods without going through a full, new solicitation process each time. This can be highly effective for recurring needs and for obtaining favorable pricing if the underlying BPA was competitively established. However, the effectiveness of a BPA call is diminished if the underlying BPA itself was not competitively sourced or if individual calls are awarded on a sole-source basis, as seen in this case. While efficient, the efficiency gains should not come at the expense of value for money.

What are the historical spending patterns for IT hardware within the Transportation Security Administration?

Historical spending patterns for IT hardware within the Transportation Security Administration (TSA) would likely show consistent investment in maintaining and upgrading its technology infrastructure to support its mission. This typically includes computers, laptops, networking equipment, and other peripherals for its workforce. Analyzing past TSA IT hardware contracts would reveal trends in vendor selection, average contract values, and the typical procurement methods used (e.g., competitive solicitations, BPAs, sole-source awards). Understanding these patterns can help contextualize the current $13.8 million BPA call, highlighting whether it aligns with or deviates from historical spending levels and procurement strategies.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 70T03024Q7667N028

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 303 CENTENNIAL DR, NORTH SIOUX CITY, SD, 57049

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

Financial Breakdown

Contract Ceiling: $13,803,130

Exercised Options: $13,803,130

Current Obligation: $13,803,130

Actual Outlays: $13,801,646

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70T03024A7667N002

IDV Type: BPA

Timeline