CNI Federal Services awarded $16.3M for IT services to Department of Energy, a sole-source contract
Contract Overview
Contract Amount: $16,332,019 ($16.3M)
Contractor: CNI Federal Services, LLC
Awarding Agency: Department of Energy
Start Date: 2006-08-01
End Date: 2011-09-30
Contract Duration: 1,886 days
Daily Burn Rate: $8.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: PROVIDE INFORMATION TECHNOLOGY SERVICES TO DOE-CH
Place of Performance
Location: LEMONT, DUPAGE County, ILLINOIS, 60439
State: Illinois Government Spending
Plain-Language Summary
Department of Energy obligated $16.3 million to CNI FEDERAL SERVICES, LLC for work described as: PROVIDE INFORMATION TECHNOLOGY SERVICES TO DOE-CH Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for flexibility but requiring careful oversight of costs and performance. 2. The contract duration of 1886 days (over 5 years) indicates a long-term need for these IT services. 3. Awarded as a sole-source contract, raising questions about potential lack of competition and its impact on pricing. 4. The North American Industry Classification System (NAICS) code 541519 suggests a broad range of computer-related services were procured. 5. The contract was awarded to CNI Federal Services, LLC, with the Department of Energy acting as both the contracting and servicing agency. 6. The contract was not set aside for small businesses, suggesting the scope or nature of services may not have been suitable for smaller entities.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source IT service contracts. The cost-plus-award-fee structure can lead to higher costs if not managed diligently, as the contractor is reimbursed for allowable costs plus an award fee based on performance. Without insight into the award fee criteria and actual awarded fees, a definitive value assessment is difficult. However, sole-source awards often carry a premium due to the lack of competitive pressure.
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. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means that the Department of Energy did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors. The rationale for this sole-source award would need to be thoroughly documented by the agency to ensure it was justified.
Taxpayer Impact: Taxpayers may have paid a higher price for these IT services due to the absence of competitive bidding. The government did not have the opportunity to leverage multiple offers to secure the best possible value.
Public Impact
The Department of Energy benefits from the provision of essential IT services required for its operations. Employees within the Department of Energy are likely the primary users of the IT services delivered under this contract. The geographic impact is primarily within Illinois, where the contract was administered. The contract supports the IT infrastructure and potentially the workforce of the Department of Energy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
- Cost-plus-award-fee contracts require robust oversight to ensure costs are reasonable and award fees are justified.
- Lack of transparency regarding the specific IT services procured and performance metrics makes independent value assessment difficult.
Positive Signals
- Long contract duration suggests a sustained and critical need for the IT services provided.
- The award to CNI Federal Services, LLC indicates a potentially established relationship or specialized capability.
- The contract was administered by the Department of Energy, suggesting internal alignment with agency needs.
Sector Analysis
The IT services sector is vast and highly competitive, encompassing a wide range of capabilities from software development to network management. Federal IT spending represents a significant portion of the overall IT market. Contracts like this, even when sole-source, are part of the government's ongoing effort to maintain and upgrade its technological infrastructure. Benchmarking this contract's value is difficult without specific service details, but the total award amount falls within the range of many mid-sized IT service contracts for federal agencies.
Small Business Impact
This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. This suggests that the scope of work was likely too large or required specialized capabilities not typically met by small business set-asides. The absence of small business participation could mean missed opportunities for smaller IT firms to contribute to federal projects.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. As a cost-plus-award-fee contract, rigorous monitoring of incurred costs and performance against award fee criteria is crucial. Transparency regarding the justification for the sole-source award and the details of the performance evaluations would be key indicators of effective oversight. The Inspector General's office for the Department of Energy would have jurisdiction for audits and investigations if any irregularities were suspected.
Related Government Programs
- Department of Energy IT Modernization Initiatives
- Federal Civilian Agency IT Services Contracts
- Cost-Plus-Award-Fee Contracts
- Sole-Source IT Procurements
Risk Flags
- Sole-source award may result in higher costs.
- Cost-plus-award-fee requires diligent oversight to control costs and ensure performance.
- Lack of detailed service description hinders value assessment.
Tags
it-services, department-of-energy, illinois, definitive-contract, cost-plus-award-fee, sole-source, computer-related-services, federal-agency, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $16.3 million to CNI FEDERAL SERVICES, LLC. PROVIDE INFORMATION TECHNOLOGY SERVICES TO DOE-CH
Who is the contractor on this award?
The obligated recipient is CNI FEDERAL SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $16.3 million.
What is the period of performance?
Start: 2006-08-01. End: 2011-09-30.
What specific IT services were provided under this contract?
The contract description indicates 'PROVIDE INFORMATION TECHNOLOGY SERVICES TO DOE-CH'. The NAICS code 541519, 'Other Computer Related Services,' suggests a broad scope. Without access to the contract's statement of work (SOW), the precise services are not detailed. This could encompass a wide array of IT functions, such as network administration, system maintenance, software support, cybersecurity, or IT consulting, tailored to the needs of the Department of Energy's Chicago office (DOE-CH).
What was the justification for awarding this contract on a sole-source basis?
Sole-source awards are typically justified when only one responsible source is available or when the agency determines that a competitive procurement is not feasible or not in the best interest of the government. Common justifications include unique capabilities, urgent needs, or follow-on work where only the incumbent contractor can provide the required services without unacceptable delay or cost. For this specific contract, the Department of Energy would have had to document a compelling reason, such as a critical system only CNI Federal Services could maintain, or a lack of other qualified vendors in the market for the specific services required.
How does the cost-plus-award-fee (CPAF) structure impact the overall cost and performance?
The Cost-Plus-Award-Fee (CPAF) contract type reimburses the contractor for allowable costs incurred and provides a base fee plus an award fee. The award fee is earned based on the contractor's performance against pre-defined criteria. This structure incentivizes good performance but can also lead to higher costs compared to fixed-price contracts if not managed carefully. For taxpayers, it means the final cost is variable and depends heavily on the contractor's effectiveness and the agency's oversight in evaluating performance and determining the award fee. Robust performance metrics and diligent administration are essential to ensure value for money.
What is the historical spending pattern for IT services at the Department of Energy for similar contracts?
Analyzing historical spending patterns for similar IT services at the Department of Energy (DOE) would require access to broader federal procurement data. However, the $16.3 million awarded over approximately five years for this specific contract suggests a significant, ongoing IT support requirement. Without comparative data on other DOE IT contracts, particularly sole-source ones, it's difficult to definitively benchmark this spending. Generally, federal IT spending is substantial, and agencies often award multi-year contracts for essential services, with costs varying based on scope, complexity, and competition.
What are the potential risks associated with a sole-source IT services contract of this duration?
The primary risks associated with a long-term sole-source IT contract include a lack of competitive pricing, potential for complacency from the contractor, and reduced innovation. Without the pressure of competition, the contractor may not be incentivized to offer the most cost-effective solutions or to proactively seek efficiencies. Furthermore, the government is locked into a single provider, which can be problematic if the contractor's performance declines or if their business circumstances change. The extended duration also means that the agency is committed to this specific solution for a considerable period, potentially missing out on newer, more advanced technologies that might emerge.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Chickasaw Nation (UEI: 070848361)
Address: 7100 N CLASSEN BLVD, STE 403, OKLAHOMA CITY, OK, 73116
Business Categories: 8(a) Program Participant, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations
Financial Breakdown
Contract Ceiling: $18,005,467
Exercised Options: $18,005,467
Current Obligation: $16,332,019
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2006-08-01
Current End Date: 2011-09-30
Potential End Date: 2020-01-29 00:00:00
Last Modified: 2020-01-31
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