Commerce Dept. Pays $31.3M for Underground Data Center Services from Iron Mountain
Contract Overview
Contract Amount: $31,343,227 ($31.3M)
Contractor: Iron Mountain Information Management LLC
Awarding Agency: Department of Commerce
Start Date: 2011-08-01
End Date: 2021-08-31
Contract Duration: 3,683 days
Daily Burn Rate: $8.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: SECURE, REMOTE PRODUCTION, OPERATION, AND DISASTER RECOVERY DATA CENTER IN BOYERS, PA UNDERGROUND MINE FACILITY.
Place of Performance
Location: PORTSMOUTH, ROCKINGHAM County, NEW HAMPSHIRE, 03801
Plain-Language Summary
Department of Commerce obligated $31.3 million to IRON MOUNTAIN INFORMATION MANAGEMENT LLC for work described as: SECURE, REMOTE PRODUCTION, OPERATION, AND DISASTER RECOVERY DATA CENTER IN BOYERS, PA UNDERGROUND MINE FACILITY. Key points: 1. Significant long-term contract for specialized data center infrastructure. 2. Sole-source award raises questions about price discovery and competition. 3. Underground facility offers unique security and disaster recovery benefits. 4. High cost suggests premium pricing for specialized services.
Value Assessment
Rating: fair
The contract value of $31.3 million over 10 years averages $3.13 million annually. Benchmarking is difficult due to the unique nature of an underground data center, but this appears to be a premium price for specialized, secure facilities.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs compared to a competitive environment. The government may have relied on market research or prior relationships to establish a fair price.
Taxpayer Impact: Taxpayers may be paying a premium for the unique security and operational benefits of the underground facility, as competition was bypassed.
Public Impact
Ensures continuity of critical government data and operations. Provides enhanced security and disaster recovery capabilities. Supports the U.S. Patent and Trademark Office's mission. Long-term commitment locks in services but limits flexibility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Unique, secure facility
- Disaster recovery capabilities
- Essential government service
Sector Analysis
The contract falls under the 'Lessors of Nonresidential Buildings' category, with a specific focus on specialized data center operations. Spending benchmarks for underground, secure facilities are scarce, making direct comparison challenging.
Small Business Impact
The contract was awarded to Iron Mountain Information Management LLC, a large corporation. There is no indication of small business participation in this specific contract.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the price paid was fair and reasonable. Further review of the justification for other than full and open competition is recommended.
Related Government Programs
- Lessors of Nonresidential Buildings (except Miniwarehouses)
- Department of Commerce Contracting
- U.S. Patent and Trademark Office Programs
Risk Flags
- Lack of competitive bidding
- Potential for overpayment
- Long-term commitment without flexibility
- Risk of technological obsolescence
- Limited transparency on pricing justification
Tags
lessors-of-nonresidential-buildings-exce, department-of-commerce, nh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Commerce awarded $31.3 million to IRON MOUNTAIN INFORMATION MANAGEMENT LLC. SECURE, REMOTE PRODUCTION, OPERATION, AND DISASTER RECOVERY DATA CENTER IN BOYERS, PA UNDERGROUND MINE FACILITY.
Who is the contractor on this award?
The obligated recipient is IRON MOUNTAIN INFORMATION MANAGEMENT LLC.
Which agency awarded this contract?
Awarding agency: Department of Commerce (U.S. Patent and Trademark Office).
What is the total obligated amount?
The obligated amount is $31.3 million.
What is the period of performance?
Start: 2011-08-01. End: 2021-08-31.
What was the specific justification for awarding this contract on a sole-source basis, and what market research was conducted to ensure a fair price?
The justification for sole-source procurement typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, the government likely cited the unique underground facility and its specific security and operational features as the sole-source justification. Market research would have involved assessing available alternatives and determining if Iron Mountain's offering was the only viable option, alongside price analysis to ensure reasonableness.
How does the cost of this underground data center compare to similar secure, above-ground data center leases, considering the added security and operational costs?
Direct cost comparison is challenging due to the unique nature of underground facilities. However, underground locations generally incur higher construction and operational costs (e.g., climate control, power, access). While Iron Mountain's pricing may reflect these higher costs and the premium for enhanced security and disaster recovery, the lack of competition makes it difficult to ascertain if the price is truly competitive relative to the value provided.
What are the long-term risks associated with a 10-year sole-source contract for essential data center services, particularly regarding technological obsolescence and vendor lock-in?
A 10-year sole-source contract carries risks of technological obsolescence if the facility's infrastructure doesn't keep pace with industry advancements. Vendor lock-in is also a significant concern, as the government is committed to a single provider, potentially limiting its ability to leverage newer, more cost-effective solutions that may emerge during the contract term.
Industry Classification
NAICS: Real Estate and Rental and Leasing › Lessors of Real Estate › Lessors of Nonresidential Buildings (except Miniwarehouses)
Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Iron Mountain Incorporated
Address: ONE FEDERAL STREET, BOSTON, MA, 02110
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,343,227
Exercised Options: $31,343,227
Current Obligation: $31,343,227
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-08-01
Current End Date: 2021-08-31
Potential End Date: 2021-10-31 00:00:00
Last Modified: 2025-06-17
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