DHS awards $6.3M Windows 10 upgrade for engine test cell, raising value-for-money questions

Contract Overview

Contract Amount: $6,307,011 ($6.3M)

Contractor: Sytronics Inc

Awarding Agency: Department of Homeland Security

Start Date: 2022-09-16

End Date: 2026-09-15

Contract Duration: 1,460 days

Daily Burn Rate: $4.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: WINDOWS 10 UPGRADE FOR THE ENGINE TEST CELL

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45432

State: Ohio Government Spending

Plain-Language Summary

Department of Homeland Security obligated $6.3 million to SYTRONICS INC for work described as: WINDOWS 10 UPGRADE FOR THE ENGINE TEST CELL Key points: 1. The contract's value-for-money is unclear due to a lack of detailed cost breakdowns and performance metrics. 2. Competition dynamics appear limited, with only two bidders for this IT service contract. 3. Risk indicators include the long duration of the contract (4 years) for an IT upgrade, potentially leading to obsolescence. 4. Performance context is minimal, with no specific deliverables or success criteria outlined. 5. The contract falls within the IT services sector, specifically computer systems design. 6. The fixed-price contract type may offer cost certainty but could limit flexibility for unforeseen technical challenges.

Value Assessment

Rating: fair

Benchmarking the value of this $6.3 million contract is challenging without detailed cost breakdowns or performance metrics. The price appears reasonable for a four-year IT service contract of this nature, but a direct comparison to similar Windows 10 upgrade projects for specialized test cells is difficult due to the unique application. The firm fixed-price structure suggests a defined scope, but the absence of detailed justifications for the total amount raises concerns about optimal resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves fewer bidders than full and open competition. With only two bidders identified, the level of competition is limited. This suggests that while some market research was likely conducted, the process may not have attracted the broadest possible range of qualified vendors, potentially impacting price discovery and the government's ability to secure the most competitive pricing.

Taxpayer Impact: Limited competition may result in higher prices for taxpayers compared to a scenario with more robust bidding. The government might not have received the full benefit of market competition to drive down costs.

Public Impact

The U.S. Coast Guard benefits from an upgraded operating system for its engine test cell. This upgrade ensures the continued functionality and potential efficiency of critical testing equipment. The primary geographic impact is within Ohio, where the engine test cell is located. The contract supports IT service providers, potentially including specialized technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technology obsolescence given the 4-year contract duration for an operating system upgrade.
Limited competition may have led to a suboptimal price for taxpayers.
Lack of detailed performance metrics makes assessing true value for money difficult.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The contract addresses a specific, necessary IT infrastructure upgrade for operational support.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services (NAICS 541512). The market for IT services is vast and highly competitive, with numerous vendors capable of providing operating system upgrades and related support. The value of this specific contract, while significant in absolute terms, is relatively small within the broader federal IT spending landscape. Comparable spending benchmarks for specialized IT infrastructure upgrades are difficult to pinpoint without more specific details on the test cell's requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, the primary impact on the small business ecosystem would be through potential subcontracting opportunities, which are not detailed in the provided information. Without a small business set-aside, larger, established firms are more likely to be the primary awardees, potentially limiting direct opportunities for smaller specialized IT companies.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices, with specific oversight potentially assigned to the U.S. Coast Guard's relevant technical and procurement divisions. Transparency is moderate, as contract award details are publicly available. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver the specified services within the agreed budget. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Infrastructure Upgrades
Operating System Modernization Programs
Department of Homeland Security IT Services
U.S. Coast Guard Equipment Maintenance

Risk Flags

Potential for technology obsolescence due to contract length and OS lifecycle.
Limited competition may impact price competitiveness.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $6.3 million to SYTRONICS INC. WINDOWS 10 UPGRADE FOR THE ENGINE TEST CELL

Who is the contractor on this award?

The obligated recipient is SYTRONICS INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $6.3 million.

What is the period of performance?

Start: 2022-09-16. End: 2026-09-15.

What is the specific nature of the 'engine test cell' and why does it require a Windows 10 upgrade?

The 'engine test cell' is a specialized facility designed for testing engines, likely for performance, durability, and emissions. The requirement for a Windows 10 upgrade suggests that the existing operating system on the control and data acquisition systems within the test cell is either no longer supported, incompatible with newer testing equipment or software, or poses a security risk. Upgrading to Windows 10 aims to ensure the continued reliable operation, data integrity, and security of the testing equipment, thereby supporting the Coast Guard's operational readiness and maintenance programs for its assets.

How does the $6.3 million cost compare to similar IT upgrade contracts for specialized government facilities?

Directly comparing the $6.3 million cost to similar IT upgrade contracts for specialized government facilities is challenging due to the unique nature of an 'engine test cell' and the limited public data available on such specific infrastructure. However, for context, large-scale enterprise-wide operating system deployments can cost tens or hundreds of millions of dollars. For a single, specialized facility upgrade over four years, $6.3 million is a substantial amount. Without knowing the exact scope, number of workstations, complexity of integration, and specific software involved, it's difficult to definitively state if this represents excellent or questionable value. Factors like the age of the existing system, the criticality of the test cell's function, and the level of customization required would heavily influence the justifiable cost.

What are the primary risks associated with a 4-year contract for a Windows 10 upgrade?

The primary risk associated with a 4-year contract for a Windows 10 upgrade is technological obsolescence. Windows 10 itself has a defined support lifecycle, with extended support ending in October 2025, and mainstream support having already concluded. By the end of this 4-year contract (September 2026), the operating system will be nearing or past its end-of-life, potentially requiring another upgrade or incurring additional costs for extended security updates. Furthermore, hardware compatibility issues may arise over the contract period, and newer testing equipment or software might not be fully compatible with Windows 10 by the contract's end. This necessitates careful planning and potentially phased rollouts or contingency clauses within the contract.

What performance metrics or deliverables are expected under this contract?

The provided data does not specify the performance metrics or deliverables expected under this contract. Typically, for an IT service contract like an operating system upgrade, deliverables would include project management plans, installation and configuration reports, testing and validation results, user training materials (if applicable), and final acceptance documentation. Performance metrics might focus on successful deployment rates, system uptime post-upgrade, reduction in reported software-related issues, and adherence to security protocols. The absence of this information in the award data suggests that these details are likely contained within the contract's statement of work (SOW) or performance work statement (PWS), which are not publicly detailed here.

How does the 'COMPETED UNDER SAP' designation impact the potential for cost savings for the government?

'COMPETED UNDER SAP' signifies that the contract was awarded using Simplified Acquisition Procedures. SAP is designed for purchases below the simplified acquisition threshold (currently $250,000, though specific agency thresholds can vary) and allows for more streamlined procurement processes. While this contract's value ($6.3 million) significantly exceeds the standard SAP threshold, the designation implies that a less formal, potentially faster competition process was used, possibly involving fewer documentation requirements and a smaller pool of solicited vendors compared to full and open competition. This can sometimes lead to quicker awards but may limit the extent of price competition, potentially resulting in higher costs than if a broader, more rigorous competition had been pursued.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 70Z03822QK0000004

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4433 DAYTON-XENIA RD BLDG 1, DAYTON, OH, 45432

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

Financial Breakdown

Contract Ceiling: $6,400,817

Exercised Options: $6,307,011

Current Obligation: $6,307,011

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline