HUD awards $1.9M to Arctic Information Technology for CRM support, raising questions about competition

Contract Overview

Contract Amount: $1,911,748 ($1.9M)

Contractor: Arctic Information Technology, Inc.

Awarding Agency: Department of Housing and Urban Development

Start Date: 2023-04-07

End Date: 2027-04-06

Contract Duration: 1,460 days

Daily Burn Rate: $1.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EO14042 CRM DYNAMICS OPERATIONAL, MAINTENANCE AND ENHANCEMENT SUPPORT

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99515

State: Alaska Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $1.9 million to ARCTIC INFORMATION TECHNOLOGY, INC. for work described as: EO14042 CRM DYNAMICS OPERATIONAL, MAINTENANCE AND ENHANCEMENT SUPPORT Key points: 1. Contract value appears reasonable for specialized CRM support services. 2. Limited competition raises concerns about potential overpayment and lack of innovation. 3. Contract duration of four years suggests a need for stable, long-term support. 4. Performance metrics and quality assurance will be critical for success. 5. This contract falls within the broader IT services sector for government agencies.

Value Assessment

Rating: fair

The contract value of approximately $1.9 million over four years for CRM operational, maintenance, and enhancement support seems within a reasonable range for specialized IT services. However, without more detailed information on the specific services and deliverables, a precise value-for-money assessment is challenging. Benchmarking against similar government contracts for CRM support would be beneficial to determine if the pricing is competitive. The fixed-price nature of the contract shifts some risk to the contractor, which can be positive if well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits the opportunity for price discovery and potentially reduces the incentive for the contractor to offer the most competitive pricing. While sole-source awards can be justified in specific circumstances, such as when a particular vendor possesses unique capabilities or when urgency dictates, the lack of competition here warrants scrutiny to ensure the government is receiving optimal value.

Taxpayer Impact: The absence of a competitive bidding process means taxpayers may not benefit from the cost savings that typically arise from multiple vendors vying for a contract. This could lead to higher overall spending for the services provided.

Public Impact

The Department of Housing and Urban Development (HUD) will benefit from enhanced customer relationship management capabilities. Services include operational support, maintenance, and enhancements for the CRM system. The contract's geographic impact is primarily within HUD's operational areas, though the IT services themselves are likely managed remotely. Workforce implications are likely minimal for HUD staff, with the contractor providing specialized IT support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if scope creep occurs without adequate oversight.

Positive Signals

Arctic Information Technology, Inc. is a known entity providing IT services.
Firm Fixed Price contract structure can provide cost certainty if well-managed.
Contract duration allows for stable support and system development.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on IT services for the federal government. The market for government IT support is substantial, with agencies increasingly relying on specialized vendors for system maintenance, enhancement, and operational support. Comparable spending benchmarks for CRM support contracts within federal agencies can vary widely based on the complexity of the system and the scope of services required.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, Arctic Information Technology, Inc., is not explicitly identified as a small business in the provided data. There is no information regarding subcontracting plans for small businesses, which could represent a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight of this contract will likely be managed by contracting officers and program managers within the Department of Housing and Urban Development. Accountability measures will be tied to the performance standards outlined in the contract. Transparency regarding the sole-source justification and ongoing performance reporting will be key to assessing accountability to taxpayers. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal IT Services Contracts
Customer Relationship Management (CRM) Systems
Department of Housing and Urban Development IT Support
Sole-Source IT Procurements

Risk Flags

Sole-source award raises concerns about competition and potential value.
Lack of detailed performance metrics in provided data.
Potential for contractor lock-in due to specialized nature of support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $1.9 million to ARCTIC INFORMATION TECHNOLOGY, INC.. EO14042 CRM DYNAMICS OPERATIONAL, MAINTENANCE AND ENHANCEMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is ARCTIC INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $1.9 million.

What is the period of performance?

Start: 2023-04-07. End: 2027-04-06.

What is the specific justification provided by HUD for awarding this CRM support contract on a sole-source basis to Arctic Information Technology, Inc.?

The provided data indicates the contract was awarded 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Agencies must justify such awards, typically citing reasons like unique capabilities of the contractor, urgent and compelling needs, or when only one source is capable of satisfying the requirement. Without the specific justification document from HUD, it's impossible to detail the exact rationale. However, common reasons for sole-source IT contracts include proprietary software knowledge, highly specialized integration expertise, or critical system sustainment where transitioning to another vendor would be prohibitively costly or disruptive.

How does the awarded amount of approximately $1.9 million compare to typical federal spending on similar CRM operational and maintenance contracts?

Benchmarking this $1.9 million contract against similar federal CRM support contracts is challenging without more specific details on the scope of services, the complexity of the CRM system, and the duration. However, for a four-year contract supporting operational, maintenance, and enhancement functions, this figure appears to be within a plausible range, especially if the CRM system is extensive or mission-critical for HUD. Many federal CRM contracts can range from hundreds of thousands to several million dollars annually, depending on the agency's size and needs. The lack of competition makes a direct price comparison difficult, but the amount itself doesn't immediately suggest overpricing without further context on deliverables and market rates for comparable services.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract to ensure contractor performance and value for money?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract focused on operational, maintenance, and enhancement support of a CRM system, typical KPIs would likely include system uptime percentages, response times for issue resolution, bug fix turnaround times, successful deployment rates for enhancements, and user satisfaction metrics. Robust SLAs would define acceptable performance thresholds for these areas, often with associated remedies or penalties for non-compliance. Effective oversight by HUD program managers would involve regularly monitoring these metrics against the contract's requirements to ensure Arctic Information Technology, Inc. is delivering the expected value and maintaining the CRM system effectively.

What is the track record of Arctic Information Technology, Inc. in performing similar federal IT support contracts, particularly those involving CRM systems?

Arctic Information Technology, Inc. has a history of performing IT services for the federal government. While the provided data doesn't detail their specific experience with CRM systems, their classification under 'Other Computer Related Services' (NAICS 541519) suggests a broad capability in IT. To assess their track record thoroughly, one would need to examine past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other contracts they have held, and client feedback. A review of their past performance on similar-sized or complexity contracts, especially those involving system maintenance and enhancement, would provide insight into their reliability, technical expertise, and ability to meet government requirements effectively.

Given the sole-source nature, what measures are in place to mitigate risks associated with potential contractor lock-in or reduced innovation?

Mitigating risks in a sole-source contract, such as contractor lock-in and reduced innovation, requires proactive contract management. HUD should ensure the contract includes clear performance standards, well-defined deliverables, and mechanisms for scope adjustments. Regular performance reviews and open communication channels with Arctic Information Technology, Inc. are crucial to encourage continuous improvement and identify potential innovations. Furthermore, HUD should actively monitor market trends and emerging technologies in CRM to ensure the system remains current and competitive, even under a sole-source arrangement. Planning for future competition or potential transitions, even if distant, can also serve as a leverage point to encourage ongoing innovation from the incumbent contractor.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 86615323Q00009

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11500 SUKDU WAY, ANCHORAGE, AK, 99515

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,800,557

Exercised Options: $1,911,748

Current Obligation: $1,911,748

Actual Outlays: $1,356,012

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline