Energy Department's $120.7M IT Support Contract Awarded to Energy Enterprise Solutions, LLC

Contract Overview

Contract Amount: $120,750,593 ($120.8M)

Contractor: Energy Enterprise Solutions, LLC

Awarding Agency: Department of Energy

Start Date: 2006-10-01

End Date: 2012-06-30

Contract Duration: 2,099 days

Daily Burn Rate: $57.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SUPPORT SERVICES TO THE ENERGY EFFICIENCY AND RENEWABLE ENERGY

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20585

State: District of Columbia Government Spending

Plain-Language Summary

Department of Energy obligated $120.8 million to ENERGY ENTERPRISE SOLUTIONS, LLC for work described as: IT SUPPORT SERVICES TO THE ENERGY EFFICIENCY AND RENEWABLE ENERGY Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of approximately 6.6 years (2099 days) is substantial for IT support services. 3. Awarded as a delivery order, indicating it's part of a larger contract vehicle. 4. The contract type is Time and Materials, which can pose cost control challenges if not managed carefully. 5. The North American Industry Classification System (NAICS) code 541519 covers 'Other Computer Related Services', a broad category. 6. The contract was awarded to a single entity, Energy Enterprise Solutions, LLC. 7. The contract was active in the District of Columbia. 8. No small business set-aside was indicated for this contract.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging without comparable Time and Materials IT support contracts of similar scope and duration. The total award amount of over $120 million over nearly seven years suggests a significant investment. However, the Time and Materials pricing structure inherently carries a higher risk of cost overruns compared to fixed-price contracts if not meticulously managed and monitored for efficiency and necessity of hours billed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust competitive process was intended. However, the data only shows one award action (no: 1), which could mean only one bid was received or that this is one of potentially multiple awards under a broader contract. Further details on the number of bids received would be needed to fully assess the level of competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering price discovery and potentially leading to more competitive pricing. However, the ultimate value depends on the number of actual bids submitted and the effectiveness of the evaluation process.

Public Impact

The primary beneficiary is the Department of Energy, which receives IT support services. Services delivered likely include a range of IT functions essential for the agency's operations, such as system maintenance, network support, and potentially software development or management. The geographic impact is centered in the District of Columbia, where the contract was active. The contract supports the IT infrastructure and personnel within the Department of Energy, indirectly impacting the federal workforce's ability to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to higher costs if not closely monitored for labor hours and rates.
The long duration of the contract (nearly 7 years) increases the risk of scope creep and potential for outdated technology if not managed proactively.
Lack of specific details on performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
The broad NAICS code (541519) might indicate a wide range of services, potentially making oversight more complex.

Positive Signals

Awarded through 'Full and Open Competition,' which typically promotes competitive pricing.
The contract is a delivery order, suggesting it was likely awarded under an existing, potentially pre-vetted, contract vehicle.
The contractor, Energy Enterprise Solutions, LLC, has secured a significant federal contract, indicating some level of established capability.
The contract duration, while long, also provides stability for essential IT support services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically under 'Other Computer Related Services.' The federal IT services market is vast and highly competitive, with agencies constantly seeking support for their complex technological infrastructures. Contracts like this are crucial for maintaining government operations. Comparable spending benchmarks for IT support services vary widely based on scope, duration, and service level agreements, but a contract of this magnitude over several years represents a significant investment in maintaining critical IT functions.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (sb: false). Furthermore, there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a non-small business entity, and the direct impact on the small business ecosystem through this specific contract may be limited unless subcontracting opportunities arise organically or are mandated under a broader contract vehicle not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Department of Energy. As a delivery order under a larger contract, oversight might also involve the entity managing the parent contract vehicle. The Time and Materials nature of the contract necessitates rigorous monitoring of labor hours, rates, and the necessity of services rendered to ensure cost efficiency and prevent overbilling. Transparency would be enhanced by public reporting of performance metrics and expenditures, though specific details are not provided in the summary data. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Services
Computer Systems Design
Cloud Computing Services
Network Support
Software Development

Risk Flags

Time and Materials Contract Type
Long Contract Duration
Broad NAICS Code
Single Award Action

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $120.8 million to ENERGY ENTERPRISE SOLUTIONS, LLC. IT SUPPORT SERVICES TO THE ENERGY EFFICIENCY AND RENEWABLE ENERGY

Who is the contractor on this award?

The obligated recipient is ENERGY ENTERPRISE SOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $120.8 million.

What is the period of performance?

Start: 2006-10-01. End: 2012-06-30.

What specific IT support services were included under this contract?

The provided data indicates the contract falls under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide array of IT support functions. While specific details are not available in the summary, typical services under such a classification for a large federal agency like the Department of Energy could include help desk support, network administration, server maintenance, cybersecurity services, database management, IT infrastructure support, and potentially custom software development or integration. The Time and Materials (T&M) pricing structure suggests that the scope might have been flexible or evolving, allowing for adaptation to changing needs, but also requiring close oversight to manage costs effectively.

How does the Time and Materials (T&M) pricing structure compare to other contract types for IT support, and what are the implications for value?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change significantly. They reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. Compared to fixed-price contracts, T&M offers flexibility but carries a higher risk of cost overruns if not managed diligently. For taxpayers, this means the final cost can exceed initial estimates. Effective value is achieved through stringent oversight, clear performance expectations, and regular reviews of billed hours and rates to ensure efficiency and prevent unnecessary work. Fixed-price contracts, conversely, offer cost certainty but may require a more detailed initial scope definition and can lead to disputes if unforeseen issues arise.

What is the typical duration for IT support contracts of this nature, and how does this contract's duration compare?

The duration of IT support contracts can vary significantly based on the agency's needs, the complexity of the systems supported, and the contracting strategy. Contracts can range from short-term projects (months) to long-term sustainment efforts (several years). This contract, with a duration of approximately 6.6 years (2099 days), is considered a long-term engagement. Such extended durations are common for core IT infrastructure support where stability and continuity are paramount. However, the extended timeline also increases the risk of technological obsolescence and the need for careful contract management to ensure services remain relevant and cost-effective throughout the period.

What does the 'Full and Open Competition' designation imply about the bidding process and potential cost savings?

A 'Full and Open Competition' designation signifies that the contracting agency made an effort to solicit bids from all responsible sources. This is generally the preferred method for federal contracting as it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive offers. In theory, this process should lead to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios. However, the actual level of competition achieved depends on factors such as the clarity of the solicitation, the attractiveness of the contract requirements, and the number of bids actually submitted and evaluated.

What are the potential risks associated with awarding a large IT support contract to a single entity for an extended period?

Awarding a large IT support contract to a single entity for an extended period, like this $120.7 million contract over nearly seven years, presents several potential risks. Firstly, there's a risk of vendor lock-in, where the agency becomes heavily reliant on the incumbent contractor, making it difficult and costly to switch providers even if performance declines or better options emerge. Secondly, reduced competitive pressure over time could lead to complacency or less incentive for the contractor to innovate or optimize costs. Thirdly, the long duration increases the risk of the contractor's technology or methodologies becoming outdated if not actively managed. Finally, a single point of failure exists; if the contractor experiences significant financial or operational issues, it could severely disrupt the agency's IT services.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 656 QUINCE ORCHARD STE 500, GAITHERSBURG, MD, 20878

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Small Business

Financial Breakdown

Contract Ceiling: $134,569,847

Exercised Options: $134,569,847

Current Obligation: $120,750,593

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DEAM0106IM00054

IDV Type: IDC

Timeline