DOJ's $20.8M IT contract with Sotera Defense Solutions saw 3 bidders, raising questions about price discovery

Contract Overview

Contract Amount: $20,826,757 ($20.8M)

Contractor: Sotera Defense Solutions, Inc.

Awarding Agency: Department of Justice

Start Date: 2014-11-18

End Date: 2015-12-08

Contract Duration: 385 days

Daily Burn Rate: $54.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20535

State: District of Columbia Government Spending

Plain-Language Summary

Department of Justice obligated $20.8 million to SOTERA DEFENSE SOLUTIONS, INC. for work described as: IGF::OT::IGF Key points: 1. The contract's value of over $20 million for IT services warrants scrutiny for cost-effectiveness. 2. With only three bidders, the level of competition may have limited price negotiation. 3. The use of Time and Materials pricing introduces potential for cost overruns. 4. This contract's performance context is within the Federal Bureau of Investigation's IT modernization efforts. 5. Sotera Defense Solutions operates within the broader IT services sector, a significant area of federal spending.

Value Assessment

Rating: fair

Benchmarking this $20.8 million contract against similar IT services contracts is challenging without more granular data on the specific services rendered. However, the Time and Materials (T&M) pricing structure, while common, can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently. The relatively short duration of the contract (385 days) suggests a focused scope, but the total value still requires careful justification against market rates for comparable computer systems design services.

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 bids. However, with only three bidders, the competition may not have been as robust as ideal for achieving the lowest possible prices. This level of competition suggests that while the process was open, the market for these specific services might be concentrated, potentially impacting price discovery and the government's ability to secure the most competitive rates.

Taxpayer Impact: A limited number of bidders can mean taxpayers may not benefit from the full cost savings that a more competitive environment could provide.

Public Impact

The Federal Bureau of Investigation (FBI) is the primary beneficiary, receiving essential computer systems design services. These services likely support critical FBI operations and infrastructure, enhancing national security and law enforcement capabilities. The contract's impact is concentrated in the District of Columbia, where the FBI's headquarters and major operations are located. The contract supports jobs within the IT services sector, contributing to the federal workforce in specialized technical roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost escalation if not closely monitored.
Limited competition (3 bidders) may have resulted in a higher-than-optimal price for taxpayers.
The specific nature of 'Computer Systems Design Services' can be broad, requiring clear scope management to prevent scope creep.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
The contract was awarded to Sotera Defense Solutions, a known entity in the defense and IT sector.
The contract duration is relatively short, suggesting a defined project with a clear end-point.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically Computer Systems Design Services. This sector is a major area of federal spending, with agencies constantly seeking to upgrade and maintain their technological infrastructure. The market for these services is competitive but often specialized, with a mix of large prime contractors and smaller niche providers. Federal spending in this area is driven by the need for advanced cybersecurity, data management, and system integration to support agency missions.

Small Business Impact

There is no indication that this contract included a small business set-aside. Furthermore, the data does not specify any subcontracting plans for small businesses. This suggests that the primary contractor, Sotera Defense Solutions, likely performed the majority of the work, with limited direct benefit or opportunity for the small business ecosystem through subcontracting on this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's Office of the Inspector General (OIG) and the Federal Bureau of Investigation's internal contracting oversight mechanisms. Transparency is facilitated through contract databases like FPDS, but detailed performance reviews and cost audits are usually internal or conducted by the OIG. Accountability rests with the contracting officers and program managers responsible for ensuring the contractor meets performance requirements and stays within budget.

Related Government Programs

IT Services
Computer Systems Design
Department of Justice Contracts
Federal Bureau of Investigation IT Modernization
Time and Materials Contracts

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited competition may have impacted price discovery.
Need for robust oversight on T&M contract execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $20.8 million to SOTERA DEFENSE SOLUTIONS, INC.. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is SOTERA DEFENSE SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $20.8 million.

What is the period of performance?

Start: 2014-11-18. End: 2015-12-08.

What was the specific nature of the 'Computer Systems Design Services' provided under this contract?

The provided data indicates the contract was for 'Computer Systems Design Services' (NAICS 541512) awarded to SOTERA DEFENSE SOLUTIONS, INC. by the Department of Justice's Federal Bureau of Investigation. While the specific details of the services are not fully elaborated in the summary data, this category typically encompasses a range of activities including analyzing user needs, designing system architecture, developing software, integrating hardware and software, and providing technical support for computer systems. Given the FBI's mission, these services likely supported critical law enforcement, intelligence, or administrative IT infrastructure, potentially involving network design, database management, or application development.

How does the $20.8 million contract value compare to similar FBI IT contracts awarded around the same period?

Comparing the $20.8 million value requires context regarding the scope and duration of similar FBI IT contracts from 2014-2015. Contracts for 'Computer Systems Design Services' can vary significantly in price based on complexity, duration, and specific deliverables. Without a detailed analysis of comparable contracts for similar services (e.g., system integration, software development, cybersecurity design) awarded by the FBI or other law enforcement agencies during that timeframe, it's difficult to definitively state if $20.8 million represents a high, low, or average expenditure. However, for a contract with a duration of just over a year, this represents a substantial investment.

What are the potential risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with Time and Materials (T&M) contracts is the potential for cost overruns, as the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or நிர்ணயிக்கப்பட்ட rate. Unlike fixed-price contracts, T&M offers less cost certainty. If not managed rigorously with strong oversight, including detailed tracking of hours, efficient task execution, and clear definition of work, contractors may incur higher costs than anticipated, leading to the government paying more than the originally estimated value. This necessitates robust government monitoring to ensure efficient performance and prevent scope creep.

What does the limited competition (3 bidders) imply for the government's negotiating power and potential value for money?

Having only three bidders for a 'full and open' competition suggests that the market for these specific computer systems design services might be relatively concentrated, or that the requirements were highly specialized, deterring broader participation. While three bidders provide some level of competition, it is less than ideal compared to a scenario with numerous bidders, which typically drives prices down more effectively. This limited competition could imply that the government had less negotiating leverage and may not have achieved the best possible price. It raises questions about whether a more robust competition could have yielded better value for the taxpayer's money.

What is Sotera Defense Solutions' track record with federal IT contracts, particularly with the FBI?

Sotera Defense Solutions, Inc. has a history of performing federal contracts, particularly within the defense and intelligence sectors, including work for agencies like the FBI. Their track record generally involves providing a range of IT, engineering, and professional services. While specific performance metrics for this particular $20.8 million contract are not detailed here, the company's continued success in securing federal awards suggests a capacity to meet government requirements. However, as with any contractor, a deeper dive into past performance reviews, any past disputes, or specific project successes/failures would be necessary for a comprehensive assessment.

How has federal spending on IT services like computer systems design evolved since this contract was awarded?

Federal spending on IT services, including computer systems design, has generally continued to increase significantly since 2014-2015. Agencies face ongoing demands to modernize legacy systems, enhance cybersecurity, adopt cloud computing, and leverage data analytics. This trend is driven by evolving technological landscapes and increasing cybersecurity threats. Consequently, the market for computer systems design services remains robust, with agencies consistently investing substantial amounts to maintain and upgrade their IT infrastructure to support critical missions. This contract represents a snapshot of that ongoing investment trend.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sentinel Acquisition Holdings Inc. (UEI: 968002589)

Address: 760 LYNNHAVEN PKWY STE 200, VIRGINIA BEACH, VA, 23452

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,826,757

Exercised Options: $20,826,757

Current Obligation: $20,826,757

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200048W

IDV Type: GWAC

Timeline