Department of Labor's $46.9M IT OIS contract to OBXTEK INC shows fair value with 1 bidder

Contract Overview

Contract Amount: $46,916,470 ($46.9M)

Contractor: Obxtek Inc

Awarding Agency: Department of Labor

Start Date: 2016-12-10

End Date: 2022-09-07

Contract Duration: 2,097 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF, OSHA INFORMATION SYSTEM (OIS)OPERATIONS AND MAINTENANCE (O&M) AND SUPPORT SERVICES TO EXISTING GOVERNMENT OSHA/OIS HARDWARE AND SOFTWARE, PER ATTACHED PERFORMANCE WORK STATEMENT (PWS) FOR CONTINUOUS OPERATIONAL OSHA IT OIS SYSTEMS 24/7.

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of Labor obligated $46.9 million to OBXTEK INC for work described as: IGF::OT::IGF, OSHA INFORMATION SYSTEM (OIS)OPERATIONS AND MAINTENANCE (O&M) AND SUPPORT SERVICES TO EXISTING GOVERNMENT OSHA/OIS HARDWARE AND SOFTWARE, PER ATTACHED PERFORMANCE WORK STATEMENT (PWS) FOR CONTINUOUS OPERATIONAL OSHA IT OIS SYSTEMS 24/7. Key points: 1. The contract value of $46.9M over approximately 7 years suggests a moderate annual spend for IT operations and maintenance. 2. Competition was limited to one bidder after exclusion of sources, raising questions about price discovery and potential for overpayment. 3. The fixed-price contract type shifts some performance risk to the contractor, but the limited competition could still lead to higher costs. 4. This contract supports critical OSHA IT systems, ensuring 24/7 operational capability, which is essential for agency functions. 5. The sector is dominated by large, established IT service providers, making it challenging for smaller firms to compete on such large contracts. 6. The contract's duration of nearly 7 years indicates a long-term need for these IT support services.

Value Assessment

Rating: fair

The contract's total value of $46.9M over nearly 7 years averages to approximately $6.7M annually. Benchmarking this against similar IT operations and maintenance contracts is difficult without more specific service details. However, given the limited competition, it is plausible that the pricing may not reflect the most competitive market rates. The fixed-price nature of the contract provides some cost certainty, but the lack of robust competition warrants careful scrutiny of the value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that initial broad competition was considered, but ultimately narrowed down. The fact that only one bidder remained suggests potential issues with the solicitation process, the scope of work, or the eligibility criteria that may have deterred other qualified vendors. This limited competition restricts the government's ability to leverage market forces to secure the best possible pricing and service terms.

Taxpayer Impact: A single bidder scenario typically means taxpayers may not benefit from the most competitive pricing. The government has less leverage to negotiate favorable terms, potentially leading to higher overall costs for the services rendered.

Public Impact

Federal employees within the Department of Labor and OSHA benefit from reliable IT systems. The contract ensures the continuous operational availability of OSHA's IT systems, supporting regulatory enforcement and public safety initiatives. The geographic impact is primarily national, as OSHA operates across the United States. The contract supports IT professionals and technicians involved in system maintenance and support, potentially including subcontracting opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (one bidder) may result in suboptimal pricing for taxpayers.
The long contract duration could lead to vendor lock-in and reduced flexibility.
Lack of transparency in the 'exclusion of sources' process raises concerns about fairness and market access for other potential bidders.

Positive Signals

Contract ensures 24/7 operational support for critical OSHA IT systems.
Fixed-price contract type provides cost predictability for the government.
The contractor, OBXTEK INC, is tasked with maintaining essential government IT infrastructure.

Sector Analysis

The IT services sector, particularly for government operations and maintenance, is a large and competitive market. However, contracts of this nature often require specialized knowledge and security clearances, which can limit the pool of eligible bidders. The market size for government IT support services is in the billions annually, with significant spending across various agencies. This contract fits within the broader category of IT support and managed services, where agencies outsource the maintenance and upkeep of their critical systems.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as the 'sb' field is false. While OBXTEK INC may be a small business, the contract itself was not specifically set aside for small businesses. There is no explicit information regarding subcontracting plans for small businesses within the provided data. This suggests that opportunities for small businesses to participate in this specific contract may be limited unless they are direct subcontractors to the prime vendor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. The Inspector General's office for the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS, but detailed performance metrics and oversight reports are not publicly available in this summary.

Related Government Programs

OSHA Information System (OIS)
IT Operations and Maintenance Contracts
Federal IT Support Services
Department of Labor IT Spending

Risk Flags

Limited Competition
Potential for Overpricing
Long Contract Duration
Lack of Transparency in Source Exclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $46.9 million to OBXTEK INC. IGF::OT::IGF, OSHA INFORMATION SYSTEM (OIS)OPERATIONS AND MAINTENANCE (O&M) AND SUPPORT SERVICES TO EXISTING GOVERNMENT OSHA/OIS HARDWARE AND SOFTWARE, PER ATTACHED PERFORMANCE WORK STATEMENT (PWS) FOR CONTINUOUS OPERATIONAL OSHA IT OIS SYSTEMS 24/7.

Who is the contractor on this award?

The obligated recipient is OBXTEK 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 $46.9 million.

What is the period of performance?

Start: 2016-12-10. End: 2022-09-07.

What is the track record of OBXTEK INC in performing similar government IT support contracts?

Assessing OBXTEK INC's track record requires a deeper dive into their contract history beyond this single award. While this contract represents a significant value ($46.9M), it's crucial to examine past performance on similar IT operations and maintenance (O&M) contracts. This includes reviewing past performance evaluations, any reported issues or disputes, and their ability to meet delivery timelines and quality standards on previous government engagements. Without this historical context, it's difficult to fully gauge their reliability and expertise in managing complex IT systems for federal agencies. Information on their financial stability and capacity to handle large-scale projects would also be pertinent.

How does the per-unit cost or annual cost of this contract compare to industry benchmarks for similar IT O&M services?

Directly comparing the per-unit cost is challenging without a detailed breakdown of services provided and their associated quantities (e.g., number of users supported, servers maintained, software licenses managed). The annual average of approximately $6.7M for IT O&M is a starting point. To benchmark effectively, one would need to identify comparable contracts awarded to other agencies or within the private sector for similar scope and scale. Factors like geographic location, specific technologies supported, and service level agreements (SLAs) significantly influence pricing. Given the limited competition, it's possible this contract's pricing is higher than what might be achieved in a more competitive environment.

What are the primary risks associated with this contract, considering the limited competition and long duration?

The primary risks associated with this contract stem from its limited competition and extended duration. The 'Full and Open Competition After Exclusion of Sources' resulting in only one bidder significantly reduces the government's leverage to negotiate favorable pricing, potentially leading to cost overruns or suboptimal value for taxpayers. The long duration (nearly 7 years) increases the risk of vendor lock-in, making it difficult and costly to switch providers if performance degrades or market alternatives become more attractive. Furthermore, a single-source environment can sometimes lead to complacency in service delivery, as the contractor may feel less pressure to innovate or maintain high standards compared to a competitive scenario.

How effective has OBXTEK INC been in delivering the IT O&M services as per the Performance Work Statement (PWS)?

Evaluating the effectiveness of OBXTEK INC's service delivery requires access to performance reports, quality assurance reviews, and potentially user feedback from the Department of Labor and OSHA. The provided data does not include specific performance metrics or evaluations. Key indicators of effectiveness would include system uptime, response times to incidents, successful implementation of updates and maintenance, and adherence to security protocols. Without these details, a definitive assessment of their performance cannot be made. Future analysis should focus on obtaining performance data and contractor evaluation reports.

What has been the historical spending trend for OSHA IT O&M services over the past 5-10 years?

Analyzing historical spending trends for OSHA IT O&M services is crucial for contextualizing the $46.9M award. This would involve examining previous contracts for similar services, noting any significant increases or decreases in spending, and understanding the reasons behind these fluctuations (e.g., system upgrades, changes in agency needs, shifts in contracting strategies). Understanding past spending patterns helps identify potential cost efficiencies or areas where spending may have escalated without corresponding improvements in service. This contract's value should be compared against this historical baseline to assess if it represents a reasonable continuation or a significant deviation.

What specific IT systems are covered under the OSHA Information System (OIS) Operations and Maintenance (O&M) contract?

The contract specifies 'OSHA INFORMATION SYSTEM (OIS) OPERATIONS AND MAINTENANCE (O&M) AND SUPPORT SERVICES TO EXISTING GOVERNMENT OSHA/OIS HARDWARE AND SOFTWARE'. This indicates the contract covers the ongoing support, maintenance, and operational continuity for the hardware and software components of the OSHA Information System. The Performance Work Statement (PWS) would contain the granular details of which specific systems, applications, databases, servers, network infrastructure, and related software are included. This could range from case management systems and data repositories to communication platforms and administrative tools essential for OSHA's regulatory and operational functions.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: DOL-OPS-16-Q-00087

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8300 BOONE BLVD STE 800, TYSONS CORNER, VA, 22182

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $50,656,772

Exercised Options: $50,656,772

Current Obligation: $46,916,470

Actual Outlays: $37,771,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS06F0650Z

IDV Type: GWAC

Timeline