DHS's $22.6M IT support contract awarded to Unisys Corporation shows a high per-unit cost

Contract Overview

Contract Amount: $22,648,864 ($22.6M)

Contractor: Unisys Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2003-03-27

End Date: 2003-09-30

Contract Duration: 187 days

Daily Burn Rate: $121.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20593

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $22.6 million to UNISYS CORPORATION for work described as: IT SUPPORT Key points: 1. The contract's value of $22.6 million for IT support services over 187 days suggests a significant investment. 2. Unisys Corporation, a large established IT services provider, was awarded this contract. 3. The contract was awarded under a full and open competition, indicating a broad solicitation process. 4. The fixed-price contract type suggests that the government aimed to control costs by setting a predetermined price. 5. The contract's duration of 187 days is relatively short for a large IT support engagement. 6. The specific North American Industry Classification System (NAICS) code 541611 points to administrative and general management consulting services, which may encompass IT support.

Value Assessment

Rating: questionable

The total award amount of $22.6 million for a 187-day contract is substantial. Benchmarking against similar IT support contracts is difficult without more specific service details. However, the implied daily cost is over $121,000, which appears high for IT support services, even for comprehensive solutions. This suggests a potential for overpayment or a scope of work that extends beyond typical IT support.

Cost Per Unit: $121,117 per day (based on total award and duration)

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. The fact that it was competed broadly is a positive sign for price discovery. However, the number of bidders is not specified, which would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to a lower overall cost for the government.

Public Impact

The U.S. Coast Guard, a component of the Department of Homeland Security, is the primary beneficiary of these IT support services. The services delivered are expected to maintain and enhance the IT infrastructure critical for the Coast Guard's operations. The contract's impact is primarily concentrated within the District of Columbia, where the services are likely performed. The contract supports the federal workforce by ensuring the availability of essential IT systems and potentially requiring specialized IT personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High daily cost suggests potential for inefficient spending.
Short contract duration for a large IT support award may indicate a stop-gap measure or a highly specialized, short-term need.
Lack of specific service details makes it difficult to fully assess value for money.

Positive Signals

Awarded through full and open competition, promoting a competitive bidding environment.
Fixed-price contract type helps to cap government liability and manage costs.
Contract is with a well-established IT services provider, Unisys Corporation.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on administrative and management consulting services that encompass IT support. The IT services market is vast and highly competitive, with numerous large and small businesses offering a wide range of solutions. Government spending in this area is substantial, driven by the need to maintain complex and evolving technological infrastructures across various agencies. Benchmarking this contract's value is challenging without granular details on the specific IT support provided, but the high daily rate warrants scrutiny.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless Unisys Corporation engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. The U.S. Coast Guard would also have internal oversight mechanisms. Transparency is facilitated by the contract award data, but detailed performance reports and Inspector General audits would provide a more comprehensive view of accountability and effectiveness.

Related Government Programs

IT Professional Services
IT Operations and Support
Management and Consulting Services
Department of Homeland Security IT Contracts
U.S. Coast Guard Procurement

Risk Flags

High Per-Unit Cost
Undefined Scope of Work
Potential for Overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $22.6 million to UNISYS CORPORATION. IT SUPPORT

Who is the contractor on this award?

The obligated recipient is UNISYS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2003-03-27. End: 2003-09-30.

What specific IT support services were included in this $22.6 million contract?

The provided data indicates the contract was for 'IT SUPPORT' under NAICS code 541611, 'Administrative Management and General Management Consulting Services.' However, the specific deliverables, scope of work, and detailed services are not itemized in the summary data. This could range from help desk support, network management, system administration, cybersecurity services, to strategic IT consulting. Without a detailed statement of work, it is impossible to ascertain the precise nature of the IT support provided, which is crucial for evaluating the contract's value and appropriateness of the cost.

How does the per-unit cost of this contract compare to similar IT support contracts awarded by the government?

The implied daily cost of approximately $121,117 is exceptionally high for standard IT support services. While specific comparisons are difficult without knowing the exact services rendered, typical IT support contracts, even for complex environments, rarely reach such daily expenditures unless they involve highly specialized, mission-critical, or emergency response functions. For instance, contracts for general IT help desk or infrastructure maintenance are usually priced significantly lower on a per-day or per-hour basis. This high cost suggests the possibility of a very specialized scope, a premium for rapid deployment, or potentially an inefficiently priced contract.

What is Unisys Corporation's track record with the Department of Homeland Security and similar government contracts?

Unisys Corporation is a large, established government contractor with a significant history of providing IT services to various federal agencies, including the Department of Homeland Security (DHS). They have held numerous contracts across different departments, covering a wide array of IT solutions. While their extensive experience suggests a capacity to handle large government IT procurements, their performance history across all contracts would need a deeper review. Specific to DHS, Unisys has been involved in various IT modernization and support initiatives. A thorough assessment would involve examining past performance evaluations, any contract disputes, and the overall success of their previous engagements with DHS and similar agencies.

What are the potential risks associated with a contract of this magnitude and duration?

Risks associated with this contract include potential cost overruns if the scope is not tightly managed, vendor lock-in if the services are highly integrated, and performance issues if the contractor fails to meet service level agreements. Given the high daily cost, there's a risk of inefficient resource allocation or paying a premium for services that could be obtained at a lower cost. The short duration (187 days) might also indicate a stop-gap measure, introducing risks related to transition and continuity of services if not properly planned for subsequent contract awards.

How does the fixed-price contract type influence the risk and value proposition for the government?

A Firm Fixed Price (FFP) contract type, as indicated for this award, shifts most of the cost risk to the contractor (Unisys Corporation). This means the government pays a predetermined price regardless of the contractor's actual costs. For the government, this offers budget certainty and protects against cost overruns. The value proposition is that the government knows its maximum liability upfront. However, for FFP to be effective, the scope of work must be clearly defined and stable. If the scope changes significantly, change orders can become costly. The high price suggests that either the scope is very well-defined and includes significant contingencies by the contractor, or the price itself is inflated.

What is the historical spending pattern for IT support services within the U.S. Coast Guard or DHS?

Historical spending on IT support services by the U.S. Coast Guard and the broader Department of Homeland Security (DHS) is substantial and has generally trended upwards with the increasing reliance on technology. Agencies like DHS, responsible for national security and critical infrastructure, invest heavily in maintaining and upgrading their IT systems. This includes significant expenditures on hardware, software, network infrastructure, and the personnel or services required to manage and support them. While specific year-over-year spending on IT support can fluctuate based on major modernization projects or contract cycles, it remains a consistent and significant portion of agency budgets. This particular contract, though large, represents one component of that overall IT investment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 11720 PLAZA AMERICA DRIVE, RESTON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,648,864

Exercised Options: $22,648,864

Current Obligation: $22,648,864

Timeline