DOT's $30M data center hosting contract awarded to ACTIONET INC. shows fair value with 6 bidders
Contract Overview
Contract Amount: $30,009,951 ($30.0M)
Contractor: Actionet Inc
Awarding Agency: Department of Transportation
Start Date: 2009-11-10
End Date: 2019-09-30
Contract Duration: 3,611 days
Daily Burn Rate: $8.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 6
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: ACTIONET TASK ORDER: DATA CENTER HOSTING MANAGEMENT.
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591
Plain-Language Summary
Department of Transportation obligated $30.0 million to ACTIONET INC for work described as: ACTIONET TASK ORDER: DATA CENTER HOSTING MANAGEMENT. Key points: 1. Contract value appears reasonable given the 10-year duration and services provided. 2. Full and open competition with six bidders suggests a healthy market for these services. 3. No immediate red flags regarding contractor performance or risk indicators are apparent. 4. This contract represents a significant portion of IT infrastructure spending for the agency. 5. The IT services sector is highly competitive, with many providers offering similar solutions. 6. The contract's duration and scope indicate a strategic investment in IT operations.
Value Assessment
Rating: good
The contract's total value of approximately $30 million over 10 years averages to $3 million annually. This figure seems competitive when benchmarked against similar large-scale data center hosting and management contracts awarded by federal agencies. While specific per-unit cost data is not provided, the overall price appears to reflect the extensive services and long-term commitment required for managing critical IT infrastructure. The presence of multiple bidders in a full and open competition further supports the notion that the pricing was likely market-driven and offered good value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with six distinct bidders vying for the opportunity. The inclusion of multiple, presumably qualified, offerors indicates a robust competitive landscape for data center hosting and management services within the federal IT sector. This level of competition is generally favorable for price discovery and ensures that the agency receives proposals from a range of providers, potentially leading to more innovative solutions and better overall value.
Taxpayer Impact: The extensive competition for this contract suggests that taxpayer dollars were likely used efficiently, as multiple companies worked to offer their best pricing and services. This competitive environment helps prevent overpayment and encourages cost-effectiveness.
Public Impact
The Department of Transportation benefits from reliable and managed data center operations, ensuring the continuity of its IT services. Essential IT infrastructure services are delivered, supporting the agency's mission-critical functions. The contract's impact is primarily within the District of Columbia, where the data center operations are likely located. The contract supports jobs within the IT services sector, contributing to the federal workforce in technology management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (10 years) could lead to vendor lock-in if not managed carefully.
- Reliance on a single vendor for critical data center infrastructure poses a potential risk if the vendor faces financial or operational issues.
- The 'Computer Facilities Management Services' NAICS code is broad; specific service details are crucial for a complete risk assessment.
Positive Signals
- Awarded under full and open competition, indicating a competitive market and potentially favorable pricing.
- The contract has a long history, suggesting consistent performance and satisfaction with the vendor.
- The agency has secured a long-term solution for essential IT infrastructure, providing stability.
Sector Analysis
The IT services sector, particularly data center hosting and management, is a mature and highly competitive market. Federal agencies increasingly rely on specialized providers for these services to ensure efficiency, security, and scalability. Comparable spending benchmarks for data center services vary widely based on scope, location, and service level agreements, but contracts in the tens of millions over several years are common for agencies of the Department of Transportation's size. This contract fits within the broader trend of federal agencies outsourcing or managing complex IT infrastructure to specialized firms.
Small Business Impact
This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. ACTIONET INC. is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without this data, it is difficult to assess the direct impact on the small business ecosystem, though the primary awardee's size suggests limited direct subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime contractor.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Transportation's contracting officers and program managers. Accountability measures are inherent in the contract's performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported concerning the contract's execution.
Related Government Programs
- Federal Data Center Consolidation Initiative
- IT Infrastructure Modernization Programs
- Cloud Computing Services Contracts
- Managed IT Services Contracts
Risk Flags
- Potential for technological obsolescence over the 10-year term.
- Risk of vendor lock-in due to long-term commitment.
- Time and Materials contract type requires diligent oversight to control costs.
Tags
it-services, data-center-hosting, department-of-transportation, actionet-inc, full-and-open-competition, time-and-materials, district-of-columbia, large-contract, it-infrastructure, managed-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $30.0 million to ACTIONET INC. ACTIONET TASK ORDER: DATA CENTER HOSTING MANAGEMENT.
Who is the contractor on this award?
The obligated recipient is ACTIONET INC.
Which agency awarded this contract?
Awarding agency: Department of Transportation (Immediate Office of the Secretary of Transportation).
What is the total obligated amount?
The obligated amount is $30.0 million.
What is the period of performance?
Start: 2009-11-10. End: 2019-09-30.
What is the track record of ACTIONET INC. with federal contracts, particularly in IT services?
ACTIONET INC. has a history of securing federal contracts, primarily within the IT services domain. While this specific contract with the Department of Transportation is substantial, a comprehensive review of their contract portfolio would reveal their experience across various agencies and contract types. Analyzing past performance evaluations, any contract disputes, and the types of services they have successfully delivered would provide a clearer picture of their reliability and expertise. It's important to note that contract awards do not always equate to flawless execution, and a deeper dive into their performance history, including any awards or penalties, is recommended for a full assessment.
How does the pricing of this $30 million contract compare to similar data center hosting contracts?
Benchmarking this $30 million contract against similar federal data center hosting agreements requires detailed comparison points such as duration, scope of services (e.g., colocation, managed services, cloud integration), security requirements, and Service Level Agreements (SLAs). On average, annual costs for federal data center services can range from hundreds of thousands to millions of dollars, depending on these factors. Given the 10-year duration, the average annual cost of $3 million appears to be within a reasonable range for a large agency like the Department of Transportation. The fact that it was awarded under full and open competition with six bidders further suggests that the pricing was likely competitive and reflective of market rates, rather than being excessively high.
What are the primary risks associated with a 10-year contract for data center hosting?
A significant risk with a 10-year data center hosting contract is technological obsolescence. The IT landscape evolves rapidly, and a 10-year commitment could lock the agency into outdated technology or infrastructure, hindering its ability to adopt newer, more efficient solutions. Another key risk is vendor lock-in, making it difficult and costly to switch providers if performance declines or better alternatives emerge. Financial stability of the vendor over such a long period is also a concern; if ACTIONET INC. were to face financial difficulties, it could disrupt critical IT operations. Finally, changes in the agency's own needs or strategic direction over a decade might not be adequately accommodated by the original contract terms.
How effective is full and open competition in ensuring value for money in IT service contracts?
Full and open competition is generally considered the most effective method for ensuring value for money in IT service contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment where multiple companies vie for the contract. This competition drives down prices as bidders strive to offer the most attractive cost proposals. Furthermore, it encourages innovation and the presentation of diverse technical solutions, allowing the agency to select the best combination of performance and price. The presence of six bidders in this specific contract underscores the effectiveness of this approach in generating a competitive landscape and likely securing a fair market price for the services.
What are the implications of this contract's duration on the Department of Transportation's IT strategy?
The 10-year duration of this data center hosting contract suggests a strategic decision by the Department of Transportation to ensure long-term stability and predictability for its core IT infrastructure. This allows the agency to focus resources on other IT initiatives rather than constantly managing short-term hosting arrangements. However, it also necessitates careful planning to ensure that the contracted services remain aligned with evolving technological advancements and the agency's future IT strategy. Flexibility clauses within the contract, or a proactive approach to contract management, will be crucial to adapt to potential shifts in technology or agency requirements over the decade.
Are there any indications of potential cost overruns or budget issues related to this contract?
Based on the provided data, there are no explicit indications of cost overruns or budget issues. The contract was awarded under full and open competition, and the total award amount is stated. However, without access to detailed spending reports, performance metrics, and potential change orders throughout the contract's lifecycle, a definitive assessment of cost control is not possible. The 'Time and Materials' contract type (PT) can sometimes present a higher risk for cost overruns if not closely monitored, as costs are directly tied to labor hours and material expenses. Vigilant oversight by the contracting officer would be essential to manage costs effectively.
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
Offers Received: 6
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 2600 PARK TOWER DR STE 1000, VIENNA, VA, 22180
Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, Woman Owned Business
Financial Breakdown
Contract Ceiling: $30,009,951
Exercised Options: $30,009,951
Current Obligation: $30,009,951
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DTOS5909D00467
IDV Type: IDC
Timeline
Start Date: 2009-11-10
Current End Date: 2019-09-30
Potential End Date: 2019-09-30 00:00:00
Last Modified: 2021-04-14
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