Department of Energy's $925.6M IT support contract awarded to Action Inc. shows cost-plus structure
Contract Overview
Contract Amount: $925,642,845 ($925.6M)
Contractor: Actionet Inc
Awarding Agency: Department of Energy
Start Date: 2012-04-03
End Date: 2019-07-12
Contract Duration: 2,656 days
Daily Burn Rate: $348.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: OCIO OPERATIONAL INFORMATION TECHNOLOGY SUPPORT SERVICES IN ACCORDANCE WITH THE STATEMENT OF WORK IN DE-DT0003143 HEREOF. (PROPOSAL REQUIREMENTS ARE SET FORTH IN THE ATTACHMENTS HERETO.)
Place of Performance
Location: GERMANTOWN, MONTGOMERY County, MARYLAND, 20874
State: Maryland Government Spending
Plain-Language Summary
Department of Energy obligated $925.6 million to ACTIONET INC for work described as: OCIO OPERATIONAL INFORMATION TECHNOLOGY SUPPORT SERVICES IN ACCORDANCE WITH THE STATEMENT OF WORK IN DE-DT0003143 HEREOF. (PROPOSAL REQUIREMENTS ARE SET FORTH IN THE ATTACHMENTS HERETO.) Key points: 1. The contract utilized a cost-plus fixed fee pricing structure, which can lead to cost overruns if not carefully managed. 2. Awarded under full and open competition, this contract suggests a competitive bidding process was intended. 3. The duration of the contract (over 7 years) indicates a long-term need for these IT services. 4. The significant value of the contract points to a substantial scope of IT operational support required by the agency. 5. The contract was a delivery order against a larger contract vehicle, suggesting a phased approach to service delivery. 6. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services.
Value Assessment
Rating: fair
The contract's cost-plus fixed fee structure necessitates close monitoring to ensure value for money. Without detailed breakdowns of cost components and profit margins, a direct comparison to market rates is challenging. However, the total award value of over $925 million for more than seven years of IT operational support suggests a significant investment. Benchmarking this against similar large-scale IT support contracts would be necessary for a comprehensive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition after exclusion of sources,' indicating that multiple bidders were solicited and considered. The presence of a single award suggests that Action Inc. was the most advantageous offer. The level of competition, while stated as full and open, would ideally involve multiple competitive bids to ensure optimal price discovery.
Taxpayer Impact: A full and open competition aims to leverage market forces to secure the best possible pricing for taxpayers. The success of this in achieving cost savings depends on the number and quality of bids received.
Public Impact
The Department of Energy benefits from sustained operational IT support, crucial for its mission-critical functions. The contract delivers essential computer systems design and support services. The primary geographic impact is likely within the Department of Energy's facilities, potentially nationwide. The contract supports a workforce involved in IT operations and systems design.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus contracts can incentivize higher spending if not rigorously overseen.
- The long duration of the contract may reduce flexibility to adopt newer technologies if not managed proactively.
- Reliance on a single contractor for a significant period could pose risks if performance degrades or the contractor faces financial instability.
Positive Signals
- Awarded through full and open competition, suggesting a structured procurement process.
- The contract is a delivery order, implying a managed approach to service acquisition.
- The significant value indicates the agency's commitment to robust IT infrastructure.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design and related services. The IT services market is highly competitive and dynamic, with significant government spending allocated to maintaining and upgrading federal IT infrastructure. Contracts of this magnitude are typical for large federal agencies requiring comprehensive IT support over extended periods. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded to system integrators and managed service providers.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract, it may offer subcontracting opportunities for small businesses, but this is not explicitly detailed in the provided information. The absence of a small business set-aside suggests the primary focus was on securing specialized IT capabilities from larger, established providers.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of Energy's contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- IT Operations and Support Services
- Computer Systems Design
- Federal IT Modernization Programs
- Cloud Computing Services Contracts
- Cybersecurity Support Services
Risk Flags
- Cost-plus contract type can lead to cost uncertainty.
- Long contract duration may limit adoption of newer technologies.
- Potential for vendor lock-in with a single provider over an extended period.
Tags
it-services, department-of-energy, occio, operational-support, computer-systems-design, cost-plus-fixed-fee, full-and-open-competition, delivery-order, actionet-inc, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $925.6 million to ACTIONET INC. OCIO OPERATIONAL INFORMATION TECHNOLOGY SUPPORT SERVICES IN ACCORDANCE WITH THE STATEMENT OF WORK IN DE-DT0003143 HEREOF. (PROPOSAL REQUIREMENTS ARE SET FORTH IN THE ATTACHMENTS HERETO.)
Who is the contractor on this award?
The obligated recipient is ACTIONET INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $925.6 million.
What is the period of performance?
Start: 2012-04-03. End: 2019-07-12.
What was the specific nature of the IT operational support services provided under this contract?
The contract, identified by DE-DT0003143, was for 'OCIO OPERATIONAL INFORMATION TECHNOLOGY SUPPORT SERVICES.' This broadly encompasses the management, maintenance, and enhancement of the Department of Energy's (DOE) information technology infrastructure and systems. Services likely included help desk support, network management, server administration, cybersecurity operations, software maintenance, and potentially IT systems design and integration, all in accordance with a detailed Statement of Work (SOW). The OCIO (Office of the Chief Information Officer) is responsible for the overall IT strategy and operations of the department, making this a critical contract for ensuring the continuity and effectiveness of DOE's digital environment.
How does the cost-plus fixed fee (CPFF) structure compare to other IT support contracts at the Department of Energy?
Cost-Plus Fixed Fee (CPFF) contracts are common for complex IT projects where the scope may evolve or is not fully defined at the outset, allowing for flexibility. However, they carry inherent risks of cost overruns as the contractor is reimbursed for actual costs plus a fixed fee. Compared to fixed-price contracts, CPFF can offer less price certainty for the government but may be necessary for R&D or services with high uncertainty. At the DOE, the prevalence of CPFF for IT support would depend on the specific nature of the services. For routine operations, fixed-price or performance-based contracts might be preferred for better cost control. Analyzing a portfolio of DOE IT contracts would reveal the typical pricing arrangements for similar services.
What were the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?
While the provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract, they are typically defined within the Statement of Work (SOW). For IT operational support services, common KPIs/SLAs would likely include metrics related to system uptime and availability (e.g., 99.9% uptime for critical systems), response times for help desk tickets and incident resolution, patch management compliance rates, cybersecurity incident response times, and successful completion of system upgrades or maintenance tasks. Failure to meet these defined metrics would usually result in penalties or reduced payments, serving as a crucial oversight mechanism.
What is the track record of Action Inc. in performing large-scale federal IT support contracts?
Action Inc. has a history of performing federal IT support contracts. The award of this significant $925.6 million contract by the Department of Energy indicates a level of trust and demonstrated capability in handling large, complex IT service requirements. To fully assess their track record, one would need to examine past performance reviews, contract award histories, and any reported issues or successes on similar government contracts. Their ability to secure and execute such a substantial contract suggests they possess the necessary resources, expertise, and experience required for federal IT operational support.
How did the 'exclusion of sources' clause in the 'full and open competition' affect the bidding process?
The term 'full and open competition after exclusion of sources' is somewhat contradictory and requires clarification. Typically, 'full and open competition' means all responsible sources are permitted to submit an offer. An 'exclusion of sources' implies that certain potential bidders were deliberately excluded, which would normally fall under other transaction authorities or specific justifications for limited competition. If this refers to a pre-qualification process where only certain types of companies could bid, it might limit the pool of competitors. However, if it means that after an initial broad solicitation, only a subset were invited to submit final proposals, it could still be considered competitive if the initial phase was sufficiently open. The exact impact depends on the specific interpretation and implementation by the agency.
What is the historical spending trend for similar IT operational support services at the Department of Energy?
To understand the historical spending trend for similar IT operational support services at the Department of Energy (DOE), one would need to analyze the agency's budget allocations and contract awards over several fiscal years. This would involve looking at spending patterns for IT services, particularly those related to operational support, infrastructure management, and systems maintenance. Examining prior contracts for similar services, their values, durations, and contractors would provide context. A trend analysis could reveal whether spending has increased, decreased, or remained stable, and whether the DOE is consolidating IT support or diversifying its contractor base.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 2600 PARK TOWER DR STE 1000, VIENNA, VA, 22180
Business Categories: Asian Pacific American Owned Business, Category Business, Community Developed Corporation Owned Firm, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, Woman Owned Business
Financial Breakdown
Contract Ceiling: $1,449,814,270
Exercised Options: $1,449,814,270
Current Obligation: $925,642,845
Actual Outlays: $3,870,074
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS06F0594Z
IDV Type: GWAC
Timeline
Start Date: 2012-04-03
Current End Date: 2019-07-12
Potential End Date: 2019-07-12 00:00:00
Last Modified: 2024-04-09
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