DoD's $63.5M IT contract to STG LLC for computer facilities management services awarded in 2002

Contract Overview

Contract Amount: $63,494,179 ($63.5M)

Contractor: STG LLC

Awarding Agency: Department of Defense

Start Date: 2002-08-13

End Date: 2009-09-30

Contract Duration: 2,605 days

Daily Burn Rate: $24.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 65

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Place of Performance

Location: FAIRFAX, FAIRFAX (CITY) County, VIRGINIA, 22032, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $63.5 million to STG LLC for work described as: Key points: 1. Contract awarded under full and open competition after exclusion of sources, indicating a competitive process. 2. The contract type is Cost Plus Award Fee (CPAF), which incentivizes performance but can lead to higher costs. 3. With a duration of 2605 days, this represents a significant long-term commitment for IT services. 4. The contract was awarded to STG LLC, a contractor with a substantial federal presence. 5. The North American Industry Classification System (NAICS) code 541513 points to a focus on computer facilities management. 6. The contract's value of $63.5 million over its term suggests a substantial investment in IT infrastructure support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and detailed cost breakdowns. The Cost Plus Award Fee (CPAF) structure allows for flexibility but requires careful oversight to ensure cost-effectiveness. Comparing it to similar IT facilities management contracts awarded around the same period (2002-2009) would be necessary to assess if the pricing was competitive and if the award fees were justified by performance. The total award amount of $63.5 million over approximately 7 years suggests an average annual spend of around $9 million, which is within a reasonable range for large-scale IT support services.

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.' This specific designation implies that while the competition was intended to be full and open, certain sources were excluded prior to the solicitation. The number of bidders is not explicitly stated in the provided data, but the 'full and open' nature suggests multiple interested parties were likely considered. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive award process, even with exclusions, generally benefits taxpayers by driving down prices and encouraging efficient service delivery from contractors.

Public Impact

The Department of the Army benefits from consistent and managed computer facilities, ensuring operational readiness. Services delivered likely include maintenance, operation, and support of critical IT infrastructure. The geographic impact is primarily within the areas served by the Department of the Army, potentially worldwide. Workforce implications include the employment of IT professionals by STG LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition type warrants further investigation to understand the rationale and impact on overall competition.
Cost Plus Award Fee contracts can incentivize contractors to incur costs to achieve award fees, potentially leading to less stringent cost control.
The long contract duration (2605 days) could lead to vendor lock-in and reduced flexibility for the agency to adapt to changing technological needs.

Positive Signals

The contract was awarded through a competitive process, suggesting an effort to secure value for money.
The Cost Plus Award Fee structure, if managed effectively, can drive high performance and quality of service.
The award to STG LLC indicates a selection based on their capabilities to meet the complex IT facilities management needs of the Department of the Army.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT facilities management. This sector is characterized by rapid technological advancements and a high demand for skilled personnel. The market size for IT services to the federal government is substantial, with agencies constantly seeking to modernize and maintain their digital infrastructure. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded to manage data centers, network infrastructure, and end-user computing environments.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the primary focus was on securing the best technical solution and price from a larger, potentially more experienced contractor. There is no explicit information on subcontracting plans for small businesses, which would be a key area to examine for potential impacts on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting officers and program managers. Accountability measures are built into the Cost Plus Award Fee structure, where contractor performance directly influences the award fee received. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed performance reviews are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Management Services
Computer Systems Design Services
Information Technology Professional Services
Cloud Computing Services
Cybersecurity Services

Risk Flags

Potential for cost overruns due to CPAF structure
Risk of technical obsolescence over contract duration
Unclear rationale for source exclusion in competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.5 million to STG LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is STG 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 $63.5 million.

What is the period of performance?

Start: 2002-08-13. End: 2009-09-30.

What was the specific rationale for excluding certain sources in a 'full and open competition after exclusion of sources' award?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests that while the competition was intended to be open to all responsible sources, specific entities were excluded from the outset. The reasons for such exclusions can vary widely and might include pre-qualification requirements, specific technical capabilities not met by all potential bidders, or prior performance issues. Without further documentation from the solicitation or award decision, it is difficult to ascertain the precise rationale. However, such exclusions can sometimes limit the breadth of competition and potentially impact the final price and innovation achieved. Understanding the criteria used for exclusion is crucial for assessing the true competitiveness of the award.

How did STG LLC's performance compare to the award fee criteria under this Cost Plus Award Fee contract?

Assessing STG LLC's performance against the award fee criteria requires access to the contract's performance work statement (PWS) and the documented award fee determinations made by the government over the contract's life. Cost Plus Award Fee (CPAF) contracts are designed such that the contractor's fee is tied to achieving specific performance objectives, quality standards, and cost management goals. If STG LLC consistently received high award fees, it would indicate strong performance. Conversely, lower award fees would suggest performance shortfalls. Without these internal government assessments, it's impossible to definitively state how their performance compared to the award fee structure. This information is typically considered sensitive and not publicly released in detail.

What were the key risks identified for this contract, and how were they mitigated?

Key risks for a contract of this nature (IT facilities management, CPAF) could include technical obsolescence, cybersecurity threats, contractor performance failures, cost overruns, and difficulties in managing a large, complex service. Technical obsolescence is a risk as IT evolves rapidly; mitigation might involve contract clauses for technology refresh or service level agreements (SLAs) that adapt to new standards. Cybersecurity risks are paramount and would be addressed through stringent security requirements, regular audits, and incident response plans. Contractor performance risks are managed through the CPAF structure and regular performance reviews. Cost overrun risks are inherent in CPAF but are intended to be controlled by the award fee mechanism and government oversight. Mitigation strategies would involve detailed PWS, clear performance metrics, and proactive program management.

How does the $63.5 million total award value compare to similar IT facilities management contracts for the Department of Defense during that period?

The total award value of $63.5 million over approximately seven years (2002-2009) translates to an average annual value of roughly $9 million. To benchmark this, one would need to compare it against other large-scale IT facilities management contracts awarded by the Department of Defense or its branches during the same timeframe. Factors influencing comparison include the scope of services (e.g., data center operations, network management, end-user support), the number of users or systems supported, and the geographic locations covered. Generally, for managing complex IT infrastructure for a major military branch, an annual spend in the single-digit to low double-digit millions would be considered substantial but not necessarily out of line, especially if it encompassed critical operational support.

What was the historical spending trend for computer facilities management services by the Department of the Army prior to this contract?

Analyzing historical spending trends for computer facilities management services by the Department of the Army prior to this contract (awarded in 2002) would provide context for the $63.5 million award. This would involve examining previous contracts for similar services, their values, durations, and the contractors involved. A significant increase in spending might indicate an expansion of IT infrastructure, a shift towards outsourcing, or a response to new operational requirements. Conversely, a stable or decreasing trend could suggest mature IT operations or consolidation. Without access to historical procurement data for the Army's IT facilities management, it's impossible to detail these trends, but such an analysis would be crucial for understanding the strategic context of this particular award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management 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

Offers Received: 65

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: 11250 WAPLES MILL ROAD, FAIRFAX, VA, 22030

Business Categories: Category Business, Small Business

Parent Contract

Parent Award PIID: 50CMMA900064

IDV Type: IDC

Timeline