Education's $43.5M virtual data center O&M contract awarded to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC

Contract Overview

Contract Amount: $43,511,502 ($43.5M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of Education

Start Date: 2009-09-01

End Date: 2011-08-19

Contract Duration: 717 days

Daily Burn Rate: $60.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OPERATIONS AND MAINTENANCE AND VARIOUS TECHNICAL UPDATES TO THE VIRTUAL DATA CENTER, SUCH AS CHANGES TO SERVERS, COMPUTER MEMORY, STORAGE, ETC.

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75075, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Education obligated $43.5 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: OPERATIONS AND MAINTENANCE AND VARIOUS TECHNICAL UPDATES TO THE VIRTUAL DATA CENTER, SUCH AS CHANGES TO SERVERS, COMPUTER MEMORY, STORAGE, ETC. Key points: 1. Contract focuses on essential virtual data center operations and technical updates. 2. The firm fixed-price structure aims to control costs for the government. 3. A single award indicates a specific need met by the selected contractor. 4. The contract duration spans over 6 years, suggesting a long-term operational requirement. 5. Geographic location in Texas may influence local IT workforce dynamics.

Value Assessment

Rating: good

The contract's value of approximately $43.5 million over more than six years for virtual data center operations and maintenance appears reasonable given the scope. Benchmarking against similar IT infrastructure management contracts is challenging without more specific service details. However, the firm fixed-price nature suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. The award to a single entity implies a thorough evaluation process to ensure the best value was identified for these specific technical services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of multiple bidders in such a scenario typically drives competitive pricing and encourages innovation. While the exact number of bidders is not specified, the 'full and open' designation suggests a robust competition that likely resulted in a fair market price for the services rendered.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives the most advantageous pricing and terms through a competitive bidding process, minimizing the risk of overpayment.

Public Impact

The Department of Education benefits from reliable and updated virtual data center infrastructure, crucial for its operations. Services include maintenance and technical updates to servers, memory, and storage, ensuring system stability. The contract's impact is primarily on the internal IT operations of the Department of Education. Workforce implications are likely within the IT sector, potentially supporting specialized roles in data center management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future upgrades or expansions are heavily reliant on NTT DATA's proprietary solutions.
Dependence on a single contractor for critical IT infrastructure could pose risks if performance issues arise.
The long-term nature of the contract might limit opportunities for other vendors to compete on future iterations.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely secured favorable terms.
Firm fixed-price contract shifts cost overrun risks to the contractor, benefiting the government's budget predictability.
The contract addresses essential operational needs for the virtual data center, ensuring continuity of services.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management. The market for IT operations and maintenance services is substantial, with government agencies being significant consumers. This contract represents a portion of the federal government's spending on maintaining and updating its digital infrastructure, ensuring the smooth functioning of critical systems. Comparable spending benchmarks would typically involve analyzing other large-scale IT infrastructure support contracts across various federal agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like NTT DATA SERVICES FEDERAL GOVERNMENT, LLC were eligible to bid and were awarded the contract. There is no explicit information provided regarding subcontracting plans for small businesses. This means the primary impact on the small business ecosystem would be indirect, through potential competition or lack thereof, rather than direct set-aside opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Education's contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
IT Operations and Maintenance Support
Data Center Consolidation Initiatives

Risk Flags

Potential for vendor lock-in
Reliance on single contractor for critical infrastructure
Long-term contract duration may limit future competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $43.5 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. OPERATIONS AND MAINTENANCE AND VARIOUS TECHNICAL UPDATES TO THE VIRTUAL DATA CENTER, SUCH AS CHANGES TO SERVERS, COMPUTER MEMORY, STORAGE, ETC.

Who is the contractor on this award?

The obligated recipient is NTT DATA SERVICES FEDERAL GOVERNMENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $43.5 million.

What is the period of performance?

Start: 2009-09-01. End: 2011-08-19.

What is the track record of NTT DATA SERVICES FEDERAL GOVERNMENT, LLC in managing similar large-scale IT infrastructure contracts for federal agencies?

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC has a significant history of performing IT services for the federal government, including managing complex infrastructure projects. Their experience often encompasses areas like data center operations, cloud migration, cybersecurity, and IT modernization. While specific performance metrics for this particular contract are not detailed here, their broader federal contracting history suggests a capacity to handle large, long-term engagements. Agencies typically evaluate a contractor's past performance, including on-time delivery, quality of service, and adherence to budget, as part of the source selection process for new awards. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations related to their previous federal IT contracts.

How does the per-unit cost or pricing structure of this contract compare to industry benchmarks for virtual data center operations and maintenance?

Determining a precise per-unit cost benchmark for this contract is challenging without granular data on the specific services provided (e.g., cost per server managed, cost per terabyte of storage, cost per hour of technical support). The contract is a firm fixed-price award, meaning the total price is set, and the contractor assumes the risk of cost fluctuations. To benchmark, one would need to compare the overall price against the volume and complexity of services delivered, and then contrast that with similar contracts awarded by other federal agencies or even large private sector organizations. Industry reports on IT infrastructure management costs could provide general ranges, but the unique requirements and service level agreements (SLAs) of a government contract often lead to different pricing dynamics compared to commercial offerings.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include potential performance deficiencies by the contractor, leading to disruptions in critical IT services for the Department of Education. Another risk is the potential for cost overruns if the firm fixed-price contract did not adequately account for unforeseen technical challenges or scope creep, although the contractor bears this risk. Vendor lock-in, where the agency becomes overly dependent on the incumbent contractor's specific technologies or expertise, is also a concern for future flexibility. Mitigation strategies likely include robust performance monitoring, clearly defined service level agreements (SLAs) with penalties for non-compliance, regular technical reviews, and contingency planning by the Department of Education. The competitive nature of the initial award also serves as a risk mitigation factor, as it implies a thorough vetting of the contractor's capabilities.

How effective has the Department of Education been in managing its IT infrastructure spending, as evidenced by contracts like this one?

This contract, valued at approximately $43.5 million over more than six years for virtual data center operations, represents a significant but necessary investment in maintaining essential IT infrastructure. Its effectiveness can be partially assessed by its firm fixed-price nature, which aids in budget predictability. The fact that it was awarded under full and open competition suggests a process aimed at achieving value for money. To fully gauge effectiveness, one would need to examine the operational uptime and performance metrics achieved under the contract, compare its cost efficiency against similar government IT contracts, and assess whether it supported the Department's broader IT modernization goals. Consistent performance and adherence to budget over its duration would indicate effective management.

What is the historical spending pattern of the Department of Education on virtual data center operations and maintenance?

Analyzing the historical spending pattern requires looking at previous contracts for similar services. This $43.5 million contract, awarded in 2009 and ending in 2011, represents a specific period's investment. To understand the pattern, one would need to aggregate spending on data center operations and maintenance over multiple fiscal years, identifying trends in contract values, durations, and awarded vendors. This would reveal whether spending has been consistent, increasing, or decreasing, and whether there have been shifts towards different service models (e.g., cloud adoption). Understanding this history helps contextualize the current contract's value and assess the agency's long-term strategy for managing its IT infrastructure.

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

Solicitation Procedures: TWO STEP

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

Address: 8270 WILLOW OAKS CORPORATE DR, FAIRFAX, VA, 22031

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $43,511,502

Exercised Options: $43,511,502

Current Obligation: $43,511,502

Parent Contract

Parent Award PIID: ED06CO0107

IDV Type: IDC

Timeline