Department of Energy awards $7.36M for power industry IT services to Open Access Technology International Inc
Contract Overview
Contract Amount: $7,356,792 ($7.4M)
Contractor: Open Access Technology International Inc
Awarding Agency: Department of Energy
Start Date: 2022-10-01
End Date: 2026-09-30
Contract Duration: 1,460 days
Daily Burn Rate: $5.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: POWER INDUSTRY ENERGY SCHEDULING, TRADING, SETTLEMENTS, E-TAGGING, AND OPERATIONS WEB-HOSTED APPLICATIONS
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55418
Plain-Language Summary
Department of Energy obligated $7.4 million to OPEN ACCESS TECHNOLOGY INTERNATIONAL INC for work described as: POWER INDUSTRY ENERGY SCHEDULING, TRADING, SETTLEMENTS, E-TAGGING, AND OPERATIONS WEB-HOSTED APPLICATIONS Key points: 1. Contract value represents a moderate investment in specialized IT infrastructure for energy market operations. 2. The sole-source nature of this award warrants scrutiny regarding potential cost efficiencies and market alternatives. 3. Performance risk appears moderate given the firm-fixed-price structure, but depends heavily on contractor execution. 4. This contract supports critical functions in energy scheduling, trading, and settlement, impacting market stability. 5. The IT services procured fall within the broader category of data processing and web hosting for critical infrastructure.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. The $7.36 million over four years suggests an annual spend of approximately $1.84 million. This figure needs to be assessed against the criticality of the services provided and the potential costs of system failure or inefficiency. Without competitive bidding, it's difficult to definitively state if this represents optimal value for money, but it does not appear excessively high for specialized IT infrastructure supporting national energy markets.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency precludes a full and open competition. The lack of competition limits price discovery and may result in higher costs for the government compared to a competitive procurement. It is essential to understand the justification for this sole-source award to ensure it was appropriate and that alternatives were adequately considered.
Taxpayer Impact: Sole-source awards can mean taxpayers may not be getting the best possible price due to the absence of competitive pressure. This necessitates strong internal government oversight to ensure the awarded price is fair and reasonable.
Public Impact
The primary beneficiaries are the Department of Energy and the broader energy industry, which rely on stable and efficient power market operations. Services delivered include web-hosted applications for scheduling, trading, settlements, and e-tagging within the power sector. The geographic impact is national, as these systems support the interconnected U.S. power grid. Workforce implications are likely internal to the contractor and the Department of Energy's IT support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
- Lack of competition raises questions about whether the government explored all viable technological solutions.
- Dependence on a single vendor for critical infrastructure could pose long-term supply chain risks.
- Performance metrics and oversight are crucial to ensure value realization in a non-competitive environment.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- Contract duration of four years allows for stable service provision and planning.
- The services support essential functions for national energy market operations, indicating strategic importance.
Sector Analysis
The contract falls within the 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' sector, a critical component of the IT industry. This sector is characterized by rapid technological advancements and significant investment. The market size for such specialized IT services supporting critical infrastructure is substantial, with numerous providers. This specific contract addresses a niche but vital area within the energy sector, focusing on the operational backbone of power trading and scheduling. Comparable spending benchmarks would typically involve other government agencies procuring similar mission-critical IT infrastructure or specialized software solutions.
Small Business Impact
This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal. The focus appears to be on specialized capabilities provided by a specific vendor, rather than broad market engagement that would typically involve small business participation.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy's contracting officers and program managers. Given the sole-source nature, rigorous oversight is essential to ensure the contractor meets performance expectations and that the pricing remains fair and reasonable throughout the contract period. Transparency is facilitated through contract databases, but detailed operational performance data may be less publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Federal IT Infrastructure Modernization Programs
- Energy Market Information Systems
- Critical Infrastructure Protection IT Services
- Web Hosting and Cloud Services for Government Agencies
Risk Flags
- Sole-source award may limit cost-effectiveness.
- Potential for vendor lock-in.
- Dependence on a single provider for critical infrastructure.
Tags
it-services, energy-sector, department-of-energy, web-hosting, data-processing, definitive-contract, firm-fixed-price, sole-source, critical-infrastructure, power-industry, minnesota, national
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $7.4 million to OPEN ACCESS TECHNOLOGY INTERNATIONAL INC. POWER INDUSTRY ENERGY SCHEDULING, TRADING, SETTLEMENTS, E-TAGGING, AND OPERATIONS WEB-HOSTED APPLICATIONS
Who is the contractor on this award?
The obligated recipient is OPEN ACCESS TECHNOLOGY INTERNATIONAL INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $7.4 million.
What is the period of performance?
Start: 2022-10-01. End: 2026-09-30.
What is the specific justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED'. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source capable of providing the required services, or in cases of urgent and compelling need where competition is not feasible. For this contract, the justification would likely stem from Open Access Technology International Inc. possessing unique intellectual property, specialized expertise, or proprietary technology essential for the Department of Energy's power industry scheduling, trading, and settlement systems. Without this specific justification document, it's impossible to confirm the exact reasoning, but it implies a reliance on the incumbent's unique capabilities.
How does the annual cost of this contract compare to similar IT services for critical infrastructure management?
The contract's total value is $7.36 million over approximately four years (October 1, 2022, to September 30, 2026), equating to an annual spend of roughly $1.84 million. Benchmarking this against similar IT services for critical infrastructure management is challenging due to the specialized nature of energy market operations and the sole-source award. However, for complex, mission-critical IT systems requiring high availability and specialized software, an annual spend in the low millions is not uncommon. Factors influencing cost include the scope of services (scheduling, trading, settlements, e-tagging), the level of customization, security requirements, and the vendor's overhead. A competitive bid process would typically yield more precise market comparisons.
What are the key performance indicators (KPIs) used to measure the success of this contract?
The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for IT services supporting power industry scheduling, trading, and settlements, critical KPIs would likely include system uptime and availability (e.g., 99.99%), response times for critical transactions, data accuracy and integrity, security incident rates, and the successful processing of e-tags. Given the firm-fixed-price nature, the Department of Energy would be expected to monitor these metrics closely to ensure the contractor is meeting contractual obligations and delivering the expected value. The absence of publicly listed KPIs makes a detailed performance assessment difficult.
What is the track record of Open Access Technology International Inc. with federal contracts, particularly with the Department of Energy?
Information on Open Access Technology International Inc.'s specific track record with federal contracts, especially with the Department of Energy, is not detailed in the provided data snippet. A comprehensive review would require accessing federal procurement databases (like SAM.gov or FPDS) to examine past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of contract modifications or disputes. Without this historical data, it's difficult to assess their reliability, past performance quality, and experience in delivering similar services to government agencies. The current sole-source award suggests a potential history of successful engagement or unique qualifications.
Are there any identified risks associated with the long-term reliance on this vendor for critical energy market IT functions?
Yes, there are potential risks associated with long-term reliance on a single vendor for critical energy market IT functions, particularly given this is a sole-source award. Key risks include vendor lock-in, where switching providers becomes prohibitively expensive or technically difficult. There's also the risk of the vendor's financial instability or strategic shifts impacting service continuity. Furthermore, without ongoing competition, there's less incentive for the vendor to innovate aggressively or offer significant cost reductions over time. The Department of Energy would need robust contract management and contingency planning to mitigate these risks, potentially including requirements for knowledge transfer and documentation to facilitate future transitions.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - PLATFORM
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 89503222RWA000452
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3660 TECHNOLOGY DR NE, MINNEAPOLIS, MN, 55418
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $15,676,773
Exercised Options: $12,901,999
Current Obligation: $7,356,792
Actual Outlays: $6,284,723
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-10-01
Current End Date: 2026-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2026-03-12
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