DOE's $72.4M IT Support Contract with Epsilon Inc. Awarded via Full and Open Competition
Contract Overview
Contract Amount: $72,435,040 ($72.4M)
Contractor: Epsilon Inc
Awarding Agency: Department of Energy
Start Date: 2021-04-28
End Date: 2026-10-31
Contract Duration: 2,012 days
Daily Burn Rate: $36.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: WAPA-WIDE PROFESSIONAL INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES
Place of Performance
Location: DENVER, JEFFERSON County, COLORADO, 80228
State: Colorado Government Spending
Plain-Language Summary
Department of Energy obligated $72.4 million to EPSILON INC for work described as: WAPA-WIDE PROFESSIONAL INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES Key points: 1. Contract provides essential IT support services across the Western Area Power Administration. 2. The contract was awarded using full and open competition, suggesting a competitive pricing environment. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of the contract extends over five years, indicating a long-term need for these services. 5. Epsilon Inc. is the sole awardee, highlighting their success in a competitive bidding process. 6. The contract's value is substantial, reflecting the critical nature of IT infrastructure for DOE operations.
Value Assessment
Rating: good
The contract value of $72.4 million over approximately five years for IT support services appears reasonable given the scope. Benchmarking against similar large-scale IT support contracts within federal agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty, which is a positive indicator of value. However, a detailed cost breakdown and comparison to industry benchmarks for specific services would be needed for a more precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised and multiple bids were likely considered. The presence of 7 bids suggests a healthy level of competition for this requirement. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.
Taxpayer Impact: The robust competition for this IT support contract is beneficial for taxpayers, as it likely drove down prices and encouraged innovative solutions from bidders, ensuring the government receives quality services at a competitive cost.
Public Impact
Federal employees across the Western Area Power Administration will benefit from reliable IT infrastructure and support. Essential IT services including computer systems design and related support are being delivered. The geographic impact is wide-ranging, covering the operational areas of WAPA, primarily in the Western United States. The contract supports IT professionals and potentially other roles within Epsilon Inc., impacting the IT workforce. Ensures the continuity of critical energy grid management and power distribution operations through stable IT systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if transition planning is not robust at contract end.
- Reliance on a single vendor for critical IT infrastructure could pose a risk if performance issues arise.
- Scope creep could occur if not managed tightly, potentially increasing costs beyond the initial award value.
Positive Signals
- Firm-fixed-price contract type provides cost predictability.
- Full and open competition suggests a competitive market was leveraged.
- Long-term contract duration allows for stable service delivery and planning.
- Multiple bids received indicate strong vendor interest and a competitive landscape.
Sector Analysis
The IT services sector is a significant area of federal spending, with agencies increasingly relying on external contractors for specialized support. This contract falls under computer systems design and related services, a segment characterized by rapid technological advancements and a dynamic market. The Department of Energy's significant investment in IT reflects the critical role technology plays in managing national energy infrastructure, grid stability, and data analysis. Comparable spending benchmarks for large-scale IT support contracts often range in the tens to hundreds of millions of dollars annually, depending on the scope and duration.
Small Business Impact
The data indicates this contract was awarded under 'Full and Open Competition' and the small business flags are 'false' (ss: false, sb: false). This suggests that small businesses were not specifically targeted through set-asides for this particular award. While Epsilon Inc. may engage small businesses as subcontractors, the primary award was not designated for small business participation. This means the direct impact on the small business ecosystem for this specific contract is likely limited unless subcontracting opportunities are substantial.
Oversight & Accountability
Oversight for this contract would primarily reside within the Department of Energy, specifically the Western Area Power Administration contracting and program management offices. Accountability measures are typically embedded in the contract's performance work statement, including service level agreements and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.
Related Government Programs
- WAPA Information Technology Services
- Department of Energy IT Modernization Efforts
- Federal Cloud Computing Strategy Implementation
- Cybersecurity Services for Critical Infrastructure
Risk Flags
- Potential for vendor lock-in
- Cybersecurity risks associated with critical infrastructure IT
- Scope creep management challenges
Tags
it-support, computer-systems-design, department-of-energy, western-area-power-administration, firm-fixed-price, full-and-open-competition, multi-year-contract, large-contract, it-services, federal-contract, energy-sector, colorado
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $72.4 million to EPSILON INC. WAPA-WIDE PROFESSIONAL INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES
Who is the contractor on this award?
The obligated recipient is EPSILON INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $72.4 million.
What is the period of performance?
Start: 2021-04-28. End: 2026-10-31.
What is Epsilon Inc.'s track record with federal IT contracts, particularly with the Department of Energy?
Epsilon Inc. has a history of performing IT services for various federal agencies. While specific details on their performance with the Department of Energy prior to this award would require deeper data analysis, their success in winning this significant contract suggests a demonstrated capability and potentially a positive past performance record. Federal procurement databases often contain past performance evaluations, which would provide a more granular view of their reliability, quality of service, and adherence to contract terms on previous engagements. Examining their award history and any associated performance metrics would offer further insight into their suitability for this long-term IT support role.
How does the awarded amount of $72.4 million compare to similar IT support contracts within the Department of Energy or other energy sector agencies?
The $72.4 million contract value for five years of IT support services for WAPA is substantial but falls within the expected range for large-scale federal IT procurements. Agencies like the Department of Energy, responsible for critical national infrastructure, often award multi-million dollar contracts for comprehensive IT support. Comparing this to similar contracts, such as those for IT infrastructure management, cybersecurity, or systems integration within DOE or other energy-focused agencies (like the Federal Energy Regulatory Commission or the Bonneville Power Administration), would reveal if this represents a premium, standard, or discounted rate. Factors such as the specific services included (e.g., help desk, network management, cloud services, cybersecurity), the number of end-users supported, and the geographic spread of operations significantly influence contract values, making direct comparisons require careful consideration of these variables.
What are the primary risks associated with this contract, and what mitigation strategies are in place?
Key risks for this contract include potential vendor performance issues, cybersecurity vulnerabilities, and the risk of cost overruns if the firm-fixed-price (FFP) structure is not managed effectively. Vendor performance risk is mitigated by the competitive bidding process, which ideally selects a capable vendor, and by ongoing contract oversight and performance monitoring by the DOE. Cybersecurity risks are inherent in IT contracts and are typically addressed through stringent security requirements in the contract, regular audits, and compliance with federal cybersecurity mandates (e.g., NIST standards). While FFP contracts aim to control costs, scope creep is a common challenge; this is managed through clear contract definition, change control processes, and vigilant program management to ensure that any changes are properly justified, priced, and approved.
How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring value for taxpayers on this contract?
The 'Full and Open Competition After Exclusion of Sources' method is generally considered effective in ensuring value for taxpayers. By broadly advertising the requirement and allowing all responsible sources to submit offers, it maximizes the pool of potential bidders, thereby increasing competition. This heightened competition typically drives down prices and encourages vendors to offer innovative solutions and high-quality services to win the contract. The fact that seven bids were received indicates a robust competitive environment. This process helps prevent non-competitive pricing and ensures that the government is obtaining services at a fair market value, as determined by the collective offers received, ultimately benefiting taxpayers through cost savings and better service delivery.
What are the historical spending patterns for IT support services within the Western Area Power Administration?
Analyzing historical spending patterns for IT support services at the Western Area Power Administration (WAPA) is crucial for context. This $72.4 million contract awarded in 2021 for services through 2026 represents a significant investment. Understanding WAPA's previous IT expenditures, including the number, value, and duration of prior IT support contracts, and whether they were awarded competitively or sole-source, provides insight into trends. For instance, if WAPA has consistently spent similar amounts on IT support, it suggests a stable demand. Conversely, a sharp increase or decrease might indicate shifts in technology adoption, infrastructure changes, or strategic priorities. Benchmarking this contract's value against WAPA's historical IT budget allocation would further illuminate its significance and potential efficiency.
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 › IT AND TELECOM - IT MANAGEMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 89503019QWA000032
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 MONTICELLO VILLAGE DR, WEAVERVILLE, NC, 28787
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $145,859,967
Exercised Options: $76,465,630
Current Obligation: $72,435,040
Actual Outlays: $60,044,169
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $4,111,723
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCH18D0014
IDV Type: GWAC
Timeline
Start Date: 2021-04-28
Current End Date: 2026-10-31
Potential End Date: 2031-10-31 00:00:00
Last Modified: 2025-09-19
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