DHS Coast Guard awards $32M task order for OSC application services, raising value-for-money questions
Contract Overview
Contract Amount: $31,970,608 ($32.0M)
Contractor: Digital Management LLC
Awarding Agency: Department of Homeland Security
Start Date: 2018-01-01
End Date: 2018-11-23
Contract Duration: 326 days
Daily Burn Rate: $98.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: OPERATIONS SYSTEMS CENTER (OSC) APPLICATION PRODUCT LINES ENTERPRISE SERVICES (APLES) FY 18 SOLE SOURCE TASK ORDER.
Place of Performance
Location: KEARNEYSVILLE, BERKELEY County, WEST VIRGINIA, 25430
Plain-Language Summary
Department of Homeland Security obligated $32.0 million to DIGITAL MANAGEMENT LLC for work described as: OPERATIONS SYSTEMS CENTER (OSC) APPLICATION PRODUCT LINES ENTERPRISE SERVICES (APLES) FY 18 SOLE SOURCE TASK ORDER. Key points: 1. The contract's sole-source nature limits competitive pressure, potentially impacting price efficiency. 2. Performance period of 326 days is relatively short for enterprise-level application services. 3. The task order was awarded under a Time and Materials contract type, which can pose cost control challenges. 4. Digital Management LLC is the sole awardee, indicating a specific capability or existing relationship. 5. The contract falls under Computer Systems Design Services, a common area for federal IT spending. 6. The award amount of $31.97 million represents a significant investment in application product lines enterprise services.
Value Assessment
Rating: questionable
The $31.97 million award for application product lines enterprise services appears high given the 326-day duration and sole-source award. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar government contracts. The Time and Materials (T&M) contract type, while flexible, can lead to cost overruns if not closely managed. The provided benchmark of $98,069 for 'br' is unclear in its context and application to this specific award, making a definitive value assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This task order was awarded on a sole-source basis, meaning only one vendor, Digital Management LLC, was solicited. This significantly limits the opportunity for price discovery and competition. While sole-source awards can be justified for specific reasons such as unique capabilities or urgent needs, they generally result in higher prices compared to full and open competition. The absence of multiple bidders means the government did not benefit from a range of proposals and pricing structures.
Taxpayer Impact: Taxpayers may have paid a premium for these services due to the lack of competition. Without competitive bids, there is less assurance that the government secured the best possible price for the required application product lines enterprise services.
Public Impact
The U.S. Coast Guard benefits from the continued operation and maintenance of its Operations Systems Center (OSC) application product lines. Essential enterprise services supporting critical Coast Guard functions are delivered through this contract. The contract's geographic impact is primarily within West Virginia, where the contractor is located. The contract supports IT professionals and potentially other roles involved in application development and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Time and Materials contract type can lead to cost escalation.
- Lack of transparency in the 'br' benchmark value.
- Short performance duration for enterprise services may indicate a stop-gap measure or require follow-on work.
Positive Signals
- Ensures continuity of critical OSC application services.
- Award to a single vendor may indicate specialized expertise.
- Contract supports essential IT functions for the U.S. Coast Guard.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The federal IT services market is vast, with agencies consistently investing in application development, maintenance, and enterprise solutions. Comparable spending benchmarks for similar application enterprise services can vary widely based on scope, complexity, and duration. However, sole-source awards in this domain often warrant closer scrutiny due to the potential for inflated costs compared to competitively bid contracts.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. Consequently, this award does not directly contribute to the small business ecosystem through set-asides or mandated subcontracting goals.
Oversight & Accountability
Oversight for this contract would typically fall under the U.S. Coast Guard's contracting and program management offices. As a task order under a larger contract vehicle, its specific oversight mechanisms would depend on the parent contract's structure. Transparency is limited by the sole-source nature of the award. There is no explicit mention of Inspector General jurisdiction for this specific task order, though the DHS IG generally oversees agency spending.
Related Government Programs
- OSC Application Product Lines Enterprise Services
- Department of Homeland Security IT Services
- U.S. Coast Guard IT Modernization
- Federal Computer Systems Design Services
Risk Flags
- Sole-source award
- Time and Materials contract type
- Lack of clear benchmark data ('br')
- Limited performance duration for enterprise services
Tags
it-services, department-of-homeland-security, u-s-coast-guard, sole-source, time-and-materials, computer-systems-design, application-development, enterprise-services, task-order, west-virginia, digital-management-llc
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $32.0 million to DIGITAL MANAGEMENT LLC. OPERATIONS SYSTEMS CENTER (OSC) APPLICATION PRODUCT LINES ENTERPRISE SERVICES (APLES) FY 18 SOLE SOURCE TASK ORDER.
Who is the contractor on this award?
The obligated recipient is DIGITAL MANAGEMENT LLC.
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 $32.0 million.
What is the period of performance?
Start: 2018-01-01. End: 2018-11-23.
What is the specific justification for awarding this task order on a sole-source basis?
The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need that cannot be met by other sources, or for reasons of industrial mobilization or national security. Without further documentation or agency explanation, the specific rationale remains unclear. This lack of transparency is a common concern with sole-source procurements, as it limits the ability to verify the necessity of avoiding full and open competition.
How does the $31.97 million award compare to similar enterprise application services contracts awarded by the Coast Guard or DHS?
Direct comparison is challenging without knowing the specific scope, deliverables, and duration of other enterprise application services contracts. However, $31.97 million for a 326-day period (approximately 11 months) represents a significant monthly expenditure. Given that this was a sole-source, Time and Materials award, the cost efficiency is questionable. Competitively procured contracts for similar services often yield lower overall costs due to price pressures. Benchmarking would require access to a broader dataset of comparable contracts, including their pricing structures and performance metrics, to determine if this award represents good value for money.
What are the potential risks associated with a Time and Materials (T&M) contract for enterprise application services?
Time and Materials contracts carry inherent risks, primarily related to cost control. Unlike fixed-price contracts, T&M contracts obligate the government to pay for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or overhead. This structure can lead to cost overruns if the project scope expands, if labor hours are not efficiently managed, or if material costs are higher than anticipated. For complex enterprise application services, the risk is that the total cost could significantly exceed initial estimates, especially without robust oversight and clear performance metrics to manage the contractor's effort.
What is the significance of the 'br' value of 98069 in the context of this contract?
The 'br' value of 98069 is not clearly defined within the provided data schema or context. It is labeled as 'benchmark rate' but lacks specific units or a clear explanation of what it represents (e.g., hourly rate, daily rate, a specific service component benchmark). Without this clarification, it is impossible to accurately assess its significance or use it for meaningful comparison or value analysis. It could potentially represent a benchmark for a specific labor category or a component of the overall service, but its ambiguity limits its analytical utility.
What is the track record of Digital Management LLC in performing similar federal IT services contracts?
The provided data indicates that Digital Management LLC is the awardee for this specific task order. However, it does not offer details on their past performance, track record, or experience with similar federal IT services contracts. To assess their track record, one would need to consult contract performance reports (CPARs), other contract awards to the company, and potentially agency performance evaluations. A thorough review would examine their history of meeting deadlines, staying within budget, and delivering quality services on previous government contracts.
What are the implications of this contract for the U.S. Coast Guard's IT infrastructure and operational capabilities?
This contract directly supports the U.S. Coast Guard's Operations Systems Center (OSC) by providing essential enterprise services for its application product lines. The continuity of these services is crucial for the effective functioning of various Coast Guard operations that rely on these applications. The award ensures that the necessary technical support, maintenance, and potentially development are in place, thereby maintaining and enhancing the operational capabilities dependent on the OSC's IT infrastructure. The specific impact depends on the criticality of the applications supported.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 6550 ROCK SPRING DR FLR 7, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $38,694,122
Exercised Options: $31,970,608
Current Obligation: $31,970,608
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS00Q09BGD0061
IDV Type: GWAC
Timeline
Start Date: 2018-01-01
Current End Date: 2018-11-23
Potential End Date: 2018-11-23 00:00:00
Last Modified: 2021-04-12
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