Maximus Federal Consulting awarded $129M for Army logistics modernization, facing questions on value and competition

Contract Overview

Contract Amount: $129,365,389 ($129.4M)

Contractor: Maximus Federal Consulting, LLC

Awarding Agency: Department of Defense

Start Date: 2015-06-04

End Date: 2022-09-01

Contract Duration: 2,646 days

Daily Burn Rate: $48.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF ARMY SHARED SERVICES CENTER SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL.

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $129.4 million to MAXIMUS FEDERAL CONSULTING, LLC for work described as: IGF::OT::IGF ARMY SHARED SERVICES CENTER SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL. Key points: 1. Contract value exceeds typical IT support services, raising questions about cost-effectiveness. 2. Full and open competition was utilized, but the number of bidders (3) warrants scrutiny for price discovery. 3. Performance period is extensive (2646 days), increasing potential for cost overruns and scope creep. 4. The contract type (Cost Plus Fixed Fee) can incentivize higher spending, requiring robust oversight. 5. Services are critical for Army logistics, indicating high strategic importance. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's total value of $129.4 million over approximately seven years suggests a significant investment in logistics modernization support. Benchmarking against similar IT support contracts for large federal agencies is challenging without more granular data on specific services rendered. However, the Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can lead to higher costs compared to fixed-price contracts if not managed diligently. The relatively high number of bidders (3) in a full and open competition might indicate some level of market interest, but it's not a strong indicator of competitive pricing without knowing the bid amounts.

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 while the competition was broad, specific sources may have been excluded for defined reasons. Three bidders participated in this competition. A low number of bidders, even in a full and open competition, can sometimes suggest limited market capacity or high barriers to entry, potentially impacting price discovery and leading to less competitive pricing for the government.

Taxpayer Impact: With only three bidders, taxpayers may not have benefited from the most competitive pricing achievable in a broader market. This could translate to higher overall costs for the services rendered.

Public Impact

The primary beneficiary is the Department of the Army, which receives critical support for its Logistics Modernization Program (LMP). Services delivered include sustainment support, ensuring the continued functionality and effectiveness of the LMP. The geographic impact is primarily within the Department of the Army's operational footprint, supporting its global logistics capabilities. Workforce implications include the employment of personnel by Maximus Federal Consulting to deliver these specialized IT and logistics support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may incentivize higher costs.
Extensive contract duration (over 7 years) increases risk of scope creep and cost overruns.
Limited number of bidders (3) in full and open competition could indicate suboptimal price discovery.
Lack of small business set-aside may limit opportunities for smaller, innovative firms in this sector.

Positive Signals

Awarded under full and open competition, suggesting a broad market approach.
Services are critical for a major defense logistics program, indicating high strategic importance.
Contractor has a significant contract value, implying experience in large-scale federal IT projects.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services market for the federal government. The federal IT services market is vast, with agencies consistently investing in modernization and sustainment of complex systems. The Army's Logistics Modernization Program (LMP) is a significant undertaking, and contracts supporting its sustainment are essential for operational readiness. Comparable spending benchmarks for large-scale, long-term IT sustainment contracts for major defense systems can range from tens to hundreds of millions of dollars, depending on complexity and scope.

Small Business Impact

This contract was not set aside for small businesses, as indicated by `ss: false` and `sb: false`. The prime contractor, Maximus Federal Consulting, LLC, is likely a large business. The absence of a small business set-aside means that opportunities for subcontracting with small businesses were not mandated by the contract's structure. While the prime contractor may still engage small businesses, the lack of a formal set-aside reduces the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs remain reasonable and aligned with the fixed fee. The Inspector General for the Department of Defense may also have jurisdiction for audits and investigations related to potential fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, but detailed performance reports and cost breakdowns are often internal.

Related Government Programs

Logistics Modernization Program (LMP)
Army Enterprise Systems Integration Program (AESIP)
General Fund Enterprise Business System (GFEBS)
Defense Logistics Agency (DLA) IT Support Contracts
Department of Defense IT Modernization Initiatives

Risk Flags

Potential for cost overruns due to CPFF contract type.
Risk of technological obsolescence over the long contract duration.
Limited competition may have resulted in suboptimal pricing.
Scope creep is a risk given the extended performance period.
Dependence on a single contractor for critical logistics sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $129.4 million to MAXIMUS FEDERAL CONSULTING, LLC. IGF::OT::IGF ARMY SHARED SERVICES CENTER SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL.

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL CONSULTING, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $129.4 million.

What is the period of performance?

Start: 2015-06-04. End: 2022-09-01.

What is the specific nature of the 'logistics modernization program (LMP) sustainment support services' provided under this contract?

The contract details specify 'LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL.' This generally refers to the ongoing maintenance, updates, troubleshooting, and operational support required to keep the Army's Logistics Modernization Program software and systems running effectively. This can include help desk support, system administration, software patching and upgrades, database management, cybersecurity maintenance, and potentially minor enhancements or modifications to ensure the system meets evolving operational needs. The inclusion of travel suggests that on-site support or collaboration may be a necessary component of the sustainment services.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of value for money for IT sustainment services?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is a high degree of uncertainty, such as in research and development or complex system integration. For IT sustainment, CPFF offers flexibility, allowing the contractor to adapt to unforeseen technical issues or evolving requirements. However, it places a greater burden on the government to meticulously track costs and ensure they are reasonable and allocable. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally carries a higher risk of cost overruns for the government because the contractor is reimbursed for all allowable costs plus a fixed fee. While it can ensure critical services are maintained, it may not always yield the best value for money if robust cost controls and oversight are not rigorously applied.

What are the potential risks associated with the 2646-day duration of this contract?

A contract duration of 2646 days (approximately 7.25 years) presents several risks. Firstly, the extended timeline increases the likelihood of scope creep, where requirements may evolve significantly beyond the original intent, potentially leading to cost increases or contract modifications. Secondly, maintaining system relevance and technological currency over such a long period can be challenging; the technology underpinning the LMP could become outdated, requiring substantial reinvestment or re-competition. Thirdly, long-term contracts can reduce flexibility for the agency to adopt newer, potentially more cost-effective solutions that emerge during the contract period. Finally, contractor performance can degrade over time, and addressing issues may be more complex due to the established relationship and duration.

Given the 'Full and Open Competition After Exclusion of Sources' designation, what does this imply about the competitive landscape for this specific contract?

The designation 'Full and Open Competition After Exclusion of Sources' indicates that the solicitation was made available to all responsible sources, but specific sources were excluded based on predefined criteria or justifications. This is often used when certain capabilities or past performance are deemed essential, and only a limited number of firms meet those stringent requirements, or when specific national security concerns necessitate source exclusion. In this case, with only three bidders, it suggests that the market for providing this specialized sustainment support might be concentrated among a few large federal contractors. While competition occurred, the exclusion of certain sources and the limited number of participants could have constrained the breadth of competitive offers, potentially impacting the final price and the range of innovative solutions considered.

What is the historical spending pattern for logistics modernization support within the Department of the Army?

Historical spending on logistics modernization support within the Department of the Army has been substantial and consistent, reflecting the critical nature of these systems. Agencies like the Army continuously invest in maintaining and upgrading their complex logistics information systems to ensure operational efficiency and readiness. While specific historical data for LMP sustainment prior to this award isn't detailed here, overall IT spending for the Army runs into billions annually. Trends show a persistent need for sustainment services for legacy systems alongside investments in new technologies and integrated platforms. This contract represents a significant portion of that ongoing investment in ensuring the backbone of Army logistics remains functional and effective.

What is the track record of Maximus Federal Consulting, LLC, in managing large-scale IT support contracts for the federal government?

Maximus Federal Consulting, LLC has a substantial track record in managing large-scale IT and program support contracts for various federal agencies, including the Department of Defense. They are known for providing a range of services, from IT modernization and system integration to citizen services and healthcare IT. Their experience often involves complex, mission-critical systems similar to the Army's Logistics Modernization Program. While specific performance details for this particular contract are not provided, their consistent award of large federal contracts suggests a demonstrated capability to handle significant program scope, manage large teams, and meet government requirements, although like any large contractor, they may have faced performance challenges on specific projects that are not publicly detailed.

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

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Federal Consulting LLC

Address: 8000 TOWERS CRESCENT DR STE 1500, VIENNA, VA, 22182

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $154,290,702

Exercised Options: $138,557,313

Current Obligation: $129,365,389

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ11D0016

IDV Type: IDC

Timeline