Department of Labor's $59.8M IT Facilities Management contract awarded to Altech Services, Inc. shows fair value

Contract Overview

Contract Amount: $59,783,611 ($59.8M)

Contractor: Altech Services, Inc.

Awarding Agency: Department of Labor

Start Date: 2009-07-01

End Date: 2014-06-30

Contract Duration: 1,825 days

Daily Burn Rate: $32.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: JOB CORPS DATA CENTER IT FACILITIES MANAGEMENT

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78741

State: Texas Government Spending

Plain-Language Summary

Department of Labor obligated $59.8 million to ALTECH SERVICES, INC. for work described as: JOB CORPS DATA CENTER IT FACILITIES MANAGEMENT Key points: 1. The contract's value appears reasonable when benchmarked against similar IT facilities management services. 2. Full and open competition was utilized, suggesting a competitive bidding process that should drive price discovery. 3. The contract duration of five years presents a moderate risk of price escalation or service degradation. 4. Performance context is limited due to the absence of specific performance metrics in the provided data. 5. This contract falls within the IT services sector, specifically focusing on computer facilities management. 6. No small business set-aside was utilized, indicating potential missed opportunities for small business participation.

Value Assessment

Rating: fair

The total contract value of approximately $59.8 million over five years averages to about $11.96 million annually. Benchmarking against similar IT facilities management contracts suggests this pricing is within a reasonable range, though specific service level agreements and market conditions could influence true value. Without detailed performance data or a direct comparison to identical services, a definitive value assessment is challenging, but the pricing does not appear excessively high or low.

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,' which implies that while the competition was open, certain sources were initially excluded. This suggests a deliberate selection process that still allowed for broad participation. The presence of 9 bidders indicates a healthy level of competition, which is generally favorable for achieving competitive pricing and selecting a capable vendor.

Taxpayer Impact: The robust competition among 9 bidders suggests that taxpayers likely benefited from a more competitive pricing structure and a wider pool of qualified service providers, leading to a better overall value for the government.

Public Impact

The primary beneficiary is the Department of Labor, which receives essential IT facilities management services to support its operations. Services delivered include the management and maintenance of IT infrastructure, ensuring operational continuity. The geographic impact is primarily within Texas, where the contractor, Altech Services, Inc., is based. Workforce implications include the employment of IT professionals by Altech Services, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Time and Materials' contract type can lead to cost overruns if not closely monitored.
The exclusion of sources in the competition, even if justified, warrants scrutiny to ensure fairness and optimal selection.
The long contract duration (5 years) increases the risk of vendor lock-in and potential price increases over time.

Positive Signals

The utilization of 'Full and Open Competition' suggests a commitment to leveraging market competition.
The award to Altech Services, Inc. implies they met the technical and financial requirements of the solicitation.
The presence of 9 bidders indicates significant market interest and a competitive landscape for these services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on Computer Facilities Management Services (NAICS 541513). This sub-sector involves the operation and management of computer systems and related infrastructure. The market for IT facilities management is substantial, driven by the increasing reliance of government agencies on robust and secure IT operations. Comparable spending benchmarks would typically involve analyzing other federal contracts for similar IT infrastructure support and data center management services.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified. This suggests that larger businesses were the primary focus of this procurement. While this may lead to the selection of a vendor with extensive resources, it represents a missed opportunity to foster small business growth and participation in federal IT contracting. Future procurements could explore set-aside options or subcontracting requirements to enhance small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM). Accountability measures would be defined in the contract's performance work statement (PWS) and monitored through regular progress reports and performance reviews. Transparency is facilitated by the contract award data being publicly available, though detailed performance metrics and financial expenditures may require specific Freedom of Information Act (FOIA) requests or Inspector General (IG) reports.

Related Government Programs

IT Infrastructure Management
Data Center Operations
Cloud Computing Services
Cybersecurity Services
IT Support Services

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Risk of vendor lock-in with a five-year contract duration.
Lack of specific performance metrics in provided data makes value assessment difficult.
Exclusion of sources in competition warrants review for fairness and optimal outcome.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $59.8 million to ALTECH SERVICES, INC.. JOB CORPS DATA CENTER IT FACILITIES MANAGEMENT

Who is the contractor on this award?

The obligated recipient is ALTECH SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $59.8 million.

What is the period of performance?

Start: 2009-07-01. End: 2014-06-30.

What is the track record of Altech Services, Inc. in performing similar federal IT facilities management contracts?

Information regarding Altech Services, Inc.'s specific track record on similar federal contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract histories, and any reported issues or successes on previous government engagements. Federal procurement databases and agency performance rating systems (like the Contractor Performance Assessment Reporting System - CPARS) would be the primary sources for this information. Without this data, it's difficult to definitively assess their capability and reliability for this specific IT facilities management role.

How does the average annual cost of this contract compare to industry benchmarks for IT facilities management?

The contract's average annual cost is approximately $11.96 million ($59.8M / 5 years). Benchmarking this against industry standards for IT facilities management requires detailed analysis of service scope, scale, and location. General industry reports suggest that large-scale data center and IT infrastructure management can range significantly, from several million to tens of millions annually, depending on the complexity and services provided. While this figure appears within a plausible range for a federal agency's needs, a precise comparison would necessitate access to detailed service level agreements and specific market rate data for comparable government or commercial contracts.

What are the primary risks associated with a five-year 'Time and Materials' contract for IT facilities management?

The primary risks associated with a five-year 'Time and Materials' (T&M) contract for IT facilities management include potential cost overruns and a lack of defined scope, which can lead to scope creep. T&M contracts pay for the labor hours and materials used, rather than a fixed price, making budget predictability challenging if not managed rigorously. Over a five-year period, the risk of escalating labor rates and material costs is also significant. Effective oversight, detailed task orders, and strong performance management are crucial to mitigate these risks and ensure value for money.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring optimal vendor selection and pricing?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance broad market participation with specific requirements. By excluding certain sources, the agency might be targeting vendors with particular expertise or capabilities deemed essential. When combined with a sufficient number of bidders (9 in this case), it can still foster robust competition. However, the effectiveness hinges on the justification for excluding sources; if exclusions are arbitrary or limit competition unduly, it could lead to suboptimal pricing or vendor selection. Transparency in the exclusion rationale is key to assessing its impact.

What historical spending patterns exist for IT facilities management within the Department of Labor?

The provided data only pertains to this specific contract (ID: DCA, value: $59.8M, duration: 5 years). To understand historical spending patterns for IT facilities management within the Department of Labor, one would need to analyze contract awards over several fiscal years for similar services (NAICS 541513). This would involve querying federal procurement databases (like FPDS or USASpending.gov) for the agency's spending on IT infrastructure, data center management, and related support services. Such an analysis would reveal trends in contract values, types of services procured, and the contractors frequently utilized.

What are the implications of not having a small business set-aside for this contract?

The absence of a small business set-aside for this contract means that the primary competition was open to all eligible businesses, likely favoring larger, established firms with the resources to compete on such a large-scale requirement. This can limit opportunities for small businesses to gain experience and revenue within federal IT facilities management. While not inherently negative, it represents a strategic choice by the agency that prioritizes other factors over direct small business participation. Agencies often use other mechanisms, like subcontracting goals, to ensure small business involvement when set-asides are not used.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOL099RP20634

Offers Received: 9

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Intellibridge, LLC (UEI: 805476137)

Address: 1300 S MERIDIAN AVE STE 325, OKLAHOMA CITY, OK, 90

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $282,339,474

Exercised Options: $117,049,032

Current Obligation: $59,783,611

Contract Characteristics

Cost or Pricing Data: NO

Timeline