DoD's $42.6M IT Labor Support Contract with EMPOWER AI, Inc. Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $42,619,902 ($42.6M)
Contractor: Empower AI, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-01-15
End Date: 2023-02-25
Contract Duration: 5,154 days
Daily Burn Rate: $8.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 16
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IT LABOR SUPPORT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $42.6 million to EMPOWER AI, INC. for work described as: IT LABOR SUPPORT Key points: 1. Significant contract value of $42.6 million over its duration. 2. EMPOWER AI, Inc. is the sole awardee, raising questions about competition. 3. The contract spans a long period (2009-2023), potentially impacting price competitiveness. 4. IT Labor Support is a critical sector for defense operations.
Value Assessment
Rating: questionable
The contract's total value of $42.6 million over 14 years suggests a potential for overpayment if not rigorously managed. Benchmarking against similar IT labor support contracts is crucial to assess if the pricing reflects current market rates and value delivered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded under full and open competition, the long duration and single awardee raise concerns about sustained price discovery. It's unclear if subsequent delivery orders were competitively bid or if the initial competition set a benchmark that held for the entire contract period.
Taxpayer Impact: The long-term nature of this contract, even if initially competitively awarded, warrants scrutiny to ensure taxpayers are not overpaying for IT labor support services over an extended period.
Public Impact
Long-term IT support for the Department of Defense impacts operational readiness. The substantial contract value could represent a significant portion of agency IT budgets. Questions about competition and value may lead to calls for improved procurement practices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration
- Single awardee over extended period
- Potential for price escalation
Positive Signals
- Firm Fixed Price contract type
- Awarded under Full and Open Competition
Sector Analysis
IT labor support is essential for maintaining and upgrading complex defense systems. Benchmarks for similar contracts vary widely based on skill sets, duration, and specific requirements, but a $42.6 million contract over 14 years requires careful evaluation of the services rendered against the cost.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or if they had an opportunity to compete for this contract. Further analysis is needed to determine the impact on small business participation in defense IT contracts.
Oversight & Accountability
The long duration of this contract necessitates robust oversight to ensure continued value and performance. Regular reviews of pricing, service delivery, and adherence to contract terms are essential for accountability.
Related Government Programs
- Electronic Computer Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for price creep over long contract duration.
- Lack of clarity on competition for subsequent delivery orders.
- Significant contract value warrants detailed performance and cost review.
- Limited insight into small business participation.
Tags
electronic-computer-manufacturing, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.6 million to EMPOWER AI, INC.. IT LABOR SUPPORT
Who is the contractor on this award?
The obligated recipient is EMPOWER AI, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $42.6 million.
What is the period of performance?
Start: 2009-01-15. End: 2023-02-25.
What specific IT labor support services were provided under this contract, and how did their scope evolve over the 14-year period?
The contract, NA 334111, falls under Electronic Computer Manufacturing, suggesting services related to IT infrastructure, maintenance, or development. The long duration implies a broad scope that likely evolved to meet changing technological needs and defense requirements. Detailed task orders and performance reports would clarify the specific services and their evolution.
How was the 'full and open competition' process structured, and were there mechanisms to ensure ongoing price competitiveness for subsequent delivery orders?
Full and open competition typically involves broad solicitation to all responsible sources. However, for long-term contracts with multiple delivery orders, the initial competition might set a benchmark. Subsequent orders could be sole-sourced or competed among a limited pool, potentially impacting price discovery and taxpayer value over time. Clarity on the bidding process for each order is needed.
What is the benchmarked cost per unit or per hour for the IT labor support provided, compared to similar government or commercial contracts?
Without specific details on the labor categories, skill levels, and hours worked, establishing a precise per-unit cost benchmark is challenging. However, a total contract value of $42.6 million over 5154 days (approx. 14 years) averages to roughly $8,269 per day or $1,033,600 per year. This figure needs to be broken down by labor hours and roles to compare effectively with industry standards.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 16
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: NCI, Inc. (UEI: 195313866)
Address: 11730 PLAZA AMERICA DR, RESTON, VA, 20190
Business Categories: Category Business, Minority Owned Business, Not Designated a Small Business, Indian (Subcontinent) American Owned Business
Financial Breakdown
Contract Ceiling: $168,735,179
Exercised Options: $51,593,310
Current Obligation: $42,619,902
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ07D0004
IDV Type: IDC
Timeline
Start Date: 2009-01-15
Current End Date: 2023-02-25
Potential End Date: 2023-02-25 00:00:00
Last Modified: 2016-08-26
More Contracts from Empower AI, Inc.
- Digit Award. to Enable GSA IDT to Leverage Infrastructure-Led Disruption to Drive Digital Transformation and Deliver Continuous Improvement and Continuous Business Value to ITS Customers — $328.7M (General Services Administration)
- Systems Engineering and Technical Assitance (seta) Support Services for PEO Soldier and PM Subordinates — $220.5M (Department of Defense)
- JSP Service Delivery — $212.7M (Department of Defense)
- THE Cert Program Calculates Bi-Annual Improper Payment Rates Based on the Results of the Reviews Conducted. These Rates Include an Overall National Medicare FFS Improper Payment Rate and Improper Payment Rates for Each Claim Type [part a Inpatient Hospital Prospective Payment System (PPS); Part a Excluding Inpatient Hospital PPS; Part B; and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (dmepos)]. the Cert Program Ensures a Statistically Valid Random Sample; Therefore, the Improper Payment Rate Calculated From This Sample IS Considered to BE Reflective of ALL of Claims Processed by Medicare FFS Program During the Report Period. CMS Also Uses the Cert Program to Perform Special Studies and Supplemental Measurements to Determine the Improper Payment Rates of Particular Claim Types. Calculations of These Rates Facilitate CMS Ability to Take Appropriate Corrective Actions to Reduce Improper Payments — $206.7M (Department of Health and Human Services)
- National Capital Region (NCR) IT Support Services — $150.1M (Department of the Interior)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)