DHS awards $11.3M IT hardware contract to Sterling Computers Corporation for workforce tech refresh

Contract Overview

Contract Amount: $11,285,847 ($11.3M)

Contractor: Sterling Computers Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2025-09-27

End Date: 2026-09-26

Contract Duration: 364 days

Daily Burn Rate: $31.0K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PROCURING IT HARDWARE AND PERIPHERALS (LAPTOPS, TABLETS, RELATED PERIPHERALS) FOR A TECH REFRESH, FOR WORKFORCE.

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 $11.3 million to STERLING COMPUTERS CORPORATION for work described as: PROCURING IT HARDWARE AND PERIPHERALS (LAPTOPS, TABLETS, RELATED PERIPHERALS) FOR A TECH REFRESH, FOR WORKFORCE. Key points: 1. Contract focuses on essential IT hardware for workforce modernization. 2. Sole-source award raises questions about potential cost savings through competition. 3. Performance period of one year with options for extension. 4. Procurement type is Firm Fixed Price, offering cost certainty. 5. No small business set-aside, indicating potential missed opportunities for smaller vendors. 6. The contract supports the Transportation Security Administration's operational needs.

Value Assessment

Rating: fair

The contract value of $11.3 million for IT hardware over one year appears to be within a reasonable range for a federal agency's technology refresh. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or identify potential cost savings. The firm fixed-price structure provides budget predictability, but the lack of competition may mean taxpayers are not receiving the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under simplified acquisition procedures, indicating a sole-source award. This means that only one vendor, Sterling Computers Corporation, was solicited for this requirement. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a bidding war among multiple vendors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's purchasing power and potentially reduces the amount of funding available for other critical services.

Public Impact

Federal employees within the Department of Homeland Security, specifically the Transportation Security Administration, will benefit from updated technology. The contract will deliver essential IT hardware, including laptops and tablets, to support the agency's workforce. The geographic impact is primarily within the operational areas of the TSA, though the specific locations are not detailed. Workforce implications include improved productivity and efficiency for employees utilizing the new hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher per-unit costs compared to a competed award.
Sole-source awards can reduce transparency in the procurement process.
Potential for vendor lock-in if this becomes a recurring sole-source procurement.

Positive Signals

Firm Fixed Price contract provides cost certainty for the agency.
Supports essential technology refresh for critical government functions.
Award to an established vendor may ensure timely delivery and support.

Sector Analysis

This contract falls within the Information Technology sector, specifically the procurement of electronic computer hardware. The market for IT hardware is highly competitive, with numerous manufacturers and resellers. Federal agencies are significant buyers in this market, often leveraging large-scale procurements to obtain favorable pricing. However, sole-source awards bypass this competitive dynamic, potentially impacting the overall value realized.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates the awardee is not a small business. This means that opportunities for small business participation, either as prime contractors or subcontractors, were not explicitly pursued in this procurement. This could represent a missed opportunity to support the small business ecosystem and foster innovation within the federal IT supply chain.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Homeland Security's contracting officers and program managers. Transparency is limited due to the sole-source nature of the award. Accountability will be measured by the successful delivery of specified IT hardware and adherence to the firm fixed-price terms. There is no specific mention of Inspector General involvement at this stage, but they could be involved in future audits or investigations.

Related Government Programs

IT Hardware Procurement
Workforce Technology Refresh
Department of Homeland Security IT Spending
Transportation Security Administration Technology Modernization

Risk Flags

Sole-source award bypasses competitive bidding.
Lack of transparency in pricing and vendor selection.
Potential for higher costs due to absence of competition.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $11.3 million to STERLING COMPUTERS CORPORATION. PROCURING IT HARDWARE AND PERIPHERALS (LAPTOPS, TABLETS, RELATED PERIPHERALS) FOR A TECH REFRESH, FOR WORKFORCE.

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 $11.3 million.

What is the period of performance?

Start: 2025-09-27. End: 2026-09-26.

What is the track record of Sterling Computers Corporation in fulfilling federal IT hardware contracts?

Sterling Computers Corporation has a history of receiving federal contracts, primarily for IT hardware. Their performance on previous contracts would need to be reviewed through sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) to gauge their reliability, delivery timeliness, and product quality. Without access to specific performance data for this vendor, it's difficult to definitively assess their track record. However, agencies typically conduct pre-award reviews of past performance, especially for sole-source awards, to mitigate risks associated with vendor capability and reliability.

How does the pricing of this contract compare to similar IT hardware procurements by federal agencies?

Benchmarking the pricing of this $11.3 million contract is challenging due to its sole-source nature. Typically, competitive procurements allow for direct comparison of unit prices for laptops, tablets, and peripherals against market rates and other government contracts. Since this award was not competed, it is presumed that the agency assessed the pricing as fair and reasonable based on internal data, historical pricing, or commercial price lists. However, without a competitive process, it's impossible to determine if this represents the best value achievable. A comparison would require access to detailed pricing breakdowns and similar sole-source or competitively awarded contracts for comparable hardware configurations.

What are the primary risks associated with a sole-source award for IT hardware?

The primary risks associated with a sole-source award for IT hardware include potential overpayment due to the absence of competitive pricing pressure, limited access to innovative solutions from a broader market, and a reduced incentive for the awarded contractor to offer exceptional service or value. There's also a risk of vendor lock-in, where the agency becomes dependent on a single supplier, potentially hindering future flexibility. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or inefficiency.

How effective is the firm fixed-price contract type in managing costs for IT hardware procurements?

The Firm Fixed Price (FFP) contract type is generally considered effective for managing costs in IT hardware procurements, especially when the scope of work and specifications are well-defined. Under an FFP contract, the contractor assumes the risk of cost overruns, providing the government with cost certainty. This means the agency knows the total price upfront, simplifying budgeting and financial planning. For standard IT hardware like laptops and tablets, where specifications are often standardized, FFP is a suitable choice. However, it does not inherently guarantee the lowest price, as that is influenced by the competition level during the bidding process.

What is the historical spending pattern for IT hardware by the Transportation Security Administration?

Analyzing the historical spending patterns of the Transportation Security Administration (TSA) for IT hardware would provide context for this $11.3 million award. This would involve examining past contract awards for similar equipment, such as laptops, tablets, and peripherals, over several fiscal years. Understanding the volume, frequency, and average cost of these procurements can reveal trends, identify potential areas for consolidation or strategic sourcing, and highlight whether this current award is consistent with past spending levels or represents a significant deviation. Without access to historical TSA procurement data, it's difficult to provide specific insights into their spending patterns.

What are the implications of this contract not being competed under Simplified Acquisition Procedures (SAP)?

Not competing this contract under Simplified Acquisition Procedures (SAP) implies that the procurement value likely exceeded the SAP thresholds (typically $250,000 for most agencies, though higher for certain categories). This means the contract should have ideally been competed more broadly to ensure best value. The fact that it was 'NOT COMPETED UNDER SAP' suggests it might have been awarded sole-source or through a limited competition that did not adhere to the full and open competition principles expected for larger dollar amounts. This raises questions about why full and open competition was bypassed and whether alternative procurement methods could have yielded better results for the taxpayer.

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: 70T03025Q7667N056

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: $11,285,847

Exercised Options: $11,285,847

Current Obligation: $11,285,847

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 70T03024A7667N002

IDV Type: BPA

Timeline