DOT's $13.5M data services contract awarded to Data Transformation Corp. raises questions on competition and value

Contract Overview

Contract Amount: $13,581,027 ($13.6M)

Contractor: Data Transformation Corp

Awarding Agency: Department of Transportation

Start Date: 2003-10-11

End Date: 2008-12-31

Contract Duration: 1,908 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DAFIS UDO RECONSTRUCT W/O ADVANCE

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $13.6 million to DATA TRANSFORMATION CORP for work described as: DAFIS UDO RECONSTRUCT W/O ADVANCE Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Long contract duration of 1908 days suggests a need for sustained data services. 3. The contract's value, while significant, requires benchmarking against similar data transformation projects. 4. Performance context is limited due to the 'NOT AVAILABLE FOR COMPETITION' status. 5. Sector positioning within 'Other Computer Related Services' is broad, requiring deeper analysis of specific deliverables. 6. Risk indicators include the lack of competitive bidding and the extended performance period.

Value Assessment

Rating: questionable

The contract value of $13.58 million over approximately five years presents a substantial investment. Without competitive bidding, it is difficult to assess if this represents a fair market price. Benchmarking against similar data transformation and IT services contracts awarded by the FAA or other agencies would be necessary to determine value for money. The lack of transparency in the pricing structure due to the sole-source award makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can fulfill the requirement. The absence of multiple bidders means there was no opportunity for price competition, which could lead to higher costs for the government. The specific reasons for the sole-source award, such as unique capabilities or prior performance, would need to be examined to understand the rationale.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competition, potentially resulting in taxpayer funds being used less efficiently.

Public Impact

The Federal Aviation Administration (FAA) benefits from this contract by receiving essential data transformation services. The services delivered are critical for managing and analyzing complex aviation data, supporting operational efficiency and safety. The geographic impact is primarily within the agency's operational areas, likely supporting headquarters and key data centers. Workforce implications may include the direct employment of personnel by Data Transformation Corp. and potential indirect impacts on FAA staff managing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Extended contract duration without competitive re-evaluation increases risk of vendor lock-in.
Limited public information on specific performance metrics and outcomes.
Sole-source award requires strong justification to ensure necessity and fairness.

Positive Signals

Award to a single, potentially specialized vendor can ensure continuity of critical services.
A long-term contract can provide stability for the vendor to invest in necessary infrastructure and expertise.
Firm Fixed Price contract type helps manage cost certainty for the government.

Sector Analysis

This contract falls within the broader IT services sector, specifically 'Other Computer Related Services.' The market for data transformation and management is highly competitive, with numerous firms offering specialized solutions. The FAA's spending in this area is indicative of the growing need for advanced data analytics to manage complex systems like air traffic control. Comparable spending benchmarks would typically involve analyzing IT services contracts for data warehousing, analytics, and system integration awarded to firms of similar size and specialization.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary awardee is likely a larger entity, and opportunities for small businesses to participate in this specific contract may be limited unless they are direct subcontractors to Data Transformation Corp. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Federal Aviation Administration. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is limited due to the sole-source nature of the award and the proprietary aspects of data transformation services. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

FAA Data Management Systems
DOT IT Modernization Initiatives
Federal Data Analytics Services
Government Cloud Computing Services
IT Services for Aviation Safety

Risk Flags

Sole-source award lacks competitive pricing.
Extended contract duration increases risk.
Limited transparency on specific services and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $13.6 million to DATA TRANSFORMATION CORP. DAFIS UDO RECONSTRUCT W/O ADVANCE

Who is the contractor on this award?

The obligated recipient is DATA TRANSFORMATION CORP.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $13.6 million.

What is the period of performance?

Start: 2003-10-11. End: 2008-12-31.

What specific data transformation services were provided under this contract, and how did they align with the FAA's mission objectives?

The contract, NA 541519, falls under 'Other Computer Related Services,' suggesting a broad scope. While specific deliverables are not detailed in the provided data, data transformation services typically involve cleaning, structuring, and preparing raw data for analysis, reporting, or integration into other systems. For the FAA, this could encompass transforming air traffic control data, maintenance records, or operational metrics to improve efficiency, safety analysis, or predictive maintenance. The alignment with mission objectives would depend on how these transformed datasets were utilized by FAA analysts and decision-makers to enhance aviation safety, optimize airspace management, or improve operational performance.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Government agencies typically justify sole-source awards when only one vendor possesses the unique capabilities, technology, or proprietary knowledge required to meet the government's needs, or in cases of urgent and compelling circumstances where competition is not feasible. Without access to the specific justification documentation (e.g., a Justification and Approval document), it's impossible to detail the exact reasons. However, agencies must demonstrate that reasonable efforts were made to ensure competition was not possible before proceeding with a sole-source award. This often involves market research to confirm the lack of alternatives.

How does the $13.58 million contract value compare to similar data transformation contracts awarded by the FAA or other federal agencies?

Benchmarking this $13.58 million contract requires comparing it to similar IT services contracts, specifically those involving data transformation, data management, and analytics, awarded by the FAA or other agencies like the Department of Defense or NASA. Factors such as contract duration (1908 days), service scope (NA 541519 - Other Computer Related Services), and contract type (Firm Fixed Price) are crucial for a meaningful comparison. Given the sole-source nature, it's harder to establish a direct price-per-unit benchmark. However, a review of publicly available contract data (e.g., through FPDS or USAspending) for competitively awarded contracts of similar scope and duration could reveal average pricing trends, helping to assess whether Data Transformation Corp.'s pricing was potentially higher due to the lack of competition.

What are the potential risks associated with a sole-source award for data transformation services over a nearly five-year period?

Sole-source awards, especially for extended periods like this 1908-day contract, carry several risks. Firstly, the lack of competition can lead to reduced incentive for the contractor to offer the most competitive pricing, potentially resulting in higher costs for the government. Secondly, there's a risk of vendor lock-in, where the agency becomes heavily reliant on a single provider, making it difficult and costly to switch vendors even if performance or pricing becomes unsatisfactory. Thirdly, without the scrutiny of a competitive bidding process, there's a potential for less rigorous evaluation of the contractor's capabilities and proposed solution upfront. Finally, the absence of market pressure might reduce the contractor's drive for innovation compared to a competitive environment.

What performance metrics or oversight mechanisms were likely in place to ensure Data Transformation Corp. delivered value and met FAA requirements?

While specific performance metrics are not detailed, federal contracts typically include a Statement of Work (SOW) outlining required services and deliverables, along with measurable performance standards. For a data transformation contract, metrics could include data accuracy rates, turnaround times for data processing, system uptime, and successful integration of transformed data. Oversight would likely involve a Contracting Officer's Representative (COR) responsible for monitoring performance, approving invoices, and ensuring compliance with the contract terms. Regular progress meetings and performance reviews would also be standard. The Firm Fixed Price (FFP) contract type itself provides a degree of cost control, as the price is set regardless of the contractor's actual costs, incentivizing efficiency.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Data Transformation Corp. (UEI: 061204350)

Address: 1010 WAYNE AVE, SILVER SPRING, MD, 08

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $550,856,874

Exercised Options: $23,864,152

Current Obligation: $13,581,027

Timeline