Vistronix LLC awarded $125M for USDA IT services, raising value-for-money questions

Contract Overview

Contract Amount: $125,010,178 ($125.0M)

Contractor: Vistronix, LLC

Awarding Agency: Department of Agriculture

Start Date: 2012-08-13

End Date: 2018-02-19

Contract Duration: 2,016 days

Daily Burn Rate: $62.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NRCS APPLICATION DEVELOPMENT AND SUPPORT SERVICES

Place of Performance

Location: FORT COLLINS, LARIMER County, COLORADO, 80526

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $125.0 million to VISTRONIX, LLC for work described as: NRCS APPLICATION DEVELOPMENT AND SUPPORT SERVICES Key points: 1. Contract value significantly exceeds typical IT support service benchmarks. 2. Limited competition dynamics may have inflated pricing. 3. Long performance period (2012-2018) suggests potential for cost overruns. 4. Contract type (Firm Fixed Price) offers some cost certainty but may not reflect evolving needs. 5. Sector positioning within USDA's IT modernization efforts requires further scrutiny. 6. Performance context is crucial given the extended duration and substantial funding.

Value Assessment

Rating: questionable

The $125 million award for computer systems design services appears high when benchmarked against similar IT support contracts. The average annual spend of approximately $20.8 million over six years warrants a closer look at the specific deliverables and market rates for comparable services. Without detailed performance metrics and a breakdown of services rendered, it is difficult to definitively assess value for money, but the overall cost raises concerns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a limited competitive environment. While 10 bids were received, the specific reasons for excluding certain sources and the nature of the 'limited' competition need further clarification. This type of award structure can sometimes lead to less competitive pricing than true full and open competition.

Taxpayer Impact: The limited competition may have resulted in taxpayers paying a premium compared to a scenario with broader, unrestricted bidding.

Public Impact

Benefits the Department of Agriculture's Office of the Chief Financial Officer by providing essential IT application development and support. Ensures the continuity and functionality of critical financial systems within the USDA. Geographic impact is primarily national, supporting USDA operations across the country. Workforce implications include the potential for direct and indirect employment within the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for IT support services.
Limited competition structure raises pricing concerns.
Extended performance period could mask inefficiencies.
Lack of detailed service breakdown makes value assessment difficult.

Positive Signals

Firm Fixed Price contract offers some cost predictability.
Multiple bids received, indicating some level of market interest.
Contract supports critical financial operations within a major federal agency.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The federal IT services market is vast, with agencies consistently investing in application development and support to maintain and modernize their systems. Benchmarks for similar contracts vary widely based on scope, complexity, and duration, but $125 million over six years for application support is substantial.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal unless Vistronix, LLC actively engaged small businesses as subcontractors. Further investigation into subcontracting plans would be needed to assess this impact.

Oversight & Accountability

Oversight mechanisms would typically involve the contracting officer's representative (COR) and agency program managers monitoring performance against contract requirements. Transparency is facilitated through contract databases like FPDS, but detailed performance reports and Inspector General audits are not publicly available in this summary. Accountability rests with the agency to ensure deliverables meet standards.

Related Government Programs

USDA Financial Management Systems
Federal IT Application Development
Computer Systems Design Services
IT Support Contracts

Risk Flags

High Contract Value
Limited Competition
Extended Performance Period

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $125.0 million to VISTRONIX, LLC. NRCS APPLICATION DEVELOPMENT AND SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is VISTRONIX, LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $125.0 million.

What is the period of performance?

Start: 2012-08-13. End: 2018-02-19.

What specific application development and support services were provided under this contract?

The provided data indicates the contract was for 'NRCS APPLICATION DEVELOPMENT AND SUPPORT SERVICES' under NAICS code 541512 (Computer Systems Design Services). However, a detailed breakdown of the specific applications supported, the nature of the development work (e.g., new features, bug fixes, system upgrades), and the scope of ongoing support (e.g., help desk, maintenance, infrastructure management) is not available in the summary data. Understanding these specifics is crucial for a thorough value assessment, as the complexity and criticality of the supported systems directly influence the appropriate cost.

How did Vistronix, LLC's pricing compare to other bidders, and what was the basis for selecting their proposal?

While the contract summary states 10 bids were received under 'Full and Open Competition After Exclusion of Sources,' it does not provide details on the pricing of each bid or the evaluation criteria used for selection. The 'limited' nature of the competition suggests that the final price might not reflect the most competitive market rate achievable under unrestricted full and open competition. Without access to the source selection decision document or detailed pricing comparisons, it's impossible to definitively state how Vistronix's pricing benchmarked against competitors or if it represented the best value.

What were the key performance indicators (KPIs) for this contract, and how did Vistronix perform against them?

The provided data does not include information on Key Performance Indicators (KPIs) established for this contract or Vistronix, LLC's performance against them. For a contract of this duration and value, robust KPIs related to system uptime, response times for support requests, successful deployment of new features, and user satisfaction would be expected. The absence of this performance data in the summary makes it difficult to assess the effectiveness and efficiency of the services rendered and whether the agency received adequate value for the funds expended.

What is the historical spending trend for application development and support services within the USDA's NRCS?

The provided data only details this specific $125 million contract awarded in 2012 and ending in 2018. To understand the historical spending trend for application development and support services within the USDA's Natural Resources Conservation Service (NRCS), one would need to analyze spending data for similar contracts over a longer period, potentially spanning a decade or more. This would involve identifying all relevant contracts, their values, durations, and the specific services procured to identify patterns, increases, or decreases in investment within this IT service category.

Were there any specific risks identified during the solicitation or performance phases of this contract, and how were they mitigated?

The summary data does not explicitly list any risks identified during the solicitation or performance phases of this contract. However, given the contract's structure ('Full and Open Competition After Exclusion of Sources') and its substantial value over a six-year period, potential risks could include vendor lock-in, scope creep, cost overruns if not managed tightly under the Firm Fixed Price structure, and potential performance issues impacting critical financial systems. Mitigation strategies would typically involve robust contract management, clear performance standards, and regular reviews by the agency.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: AG-3144-S-12-0003

Offers Received: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation

Address: 11091 SUNSET HILLS RD STE 700, RESTON, VA, 20190

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $125,010,178

Exercised Options: $125,010,178

Current Obligation: $125,010,178

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $119,091,116

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS06F0629Z

IDV Type: GWAC

Timeline