Federal student aid data center contract awarded to NTT DATA SERVICES for over $42.6 million

Contract Overview

Contract Amount: $42,649,593 ($42.6M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of Education

Start Date: 2012-08-31

End Date: 2013-08-31

Contract Duration: 365 days

Daily Burn Rate: $116.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF CRITICAL FUNCTION: FEDERAL STUDENT AID'S VIRTUAL DATA CENTER, PROVIDING CENTRALIZED HOSTING AND MANAGEMENT OF ELECTRONIC DATA AND COMPUTER APPLICATIONS, AND RELATED SERVICES TO SUPPORT FEDERAL STUDENT AID MISSION OF SERVICING STUDENT LOANS.

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22031

State: Virginia Government Spending

Plain-Language Summary

Department of Education obligated $42.6 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: IGF::CT::IGF CRITICAL FUNCTION: FEDERAL STUDENT AID'S VIRTUAL DATA CENTER, PROVIDING CENTRALIZED HOSTING AND MANAGEMENT OF ELECTRONIC DATA AND COMPUTER APPLICATIONS, AND RELATED SERVICES TO SUPPORT FEDERAL STUDENT AID MISSION OF SERVICING STUDENT LOANS. Key points: 1. The contract supports critical IT infrastructure for federal student loan servicing. 2. A firm-fixed-price contract was used, indicating defined costs for services. 3. The award was made under full and open competition, suggesting a competitive process. 4. The contract duration is one year, with a potential for extensions. 5. The services provided are essential for the operational continuity of student aid programs. 6. The contractor, NTT DATA SERVICES, is a significant player in the federal IT services market.

Value Assessment

Rating: good

The contract value of approximately $42.6 million for a one-year period for virtual data center services appears reasonable given the critical nature of supporting federal student aid. Benchmarking against similar large-scale IT infrastructure contracts for government agencies suggests that pricing is within expected ranges for comprehensive data center management and hosting. The firm-fixed-price structure helps manage cost certainty for the government.

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 a bid. The presence of 5 bidders suggests a healthy level of competition for this significant IT services contract. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Federal Student Aid (FSA) benefits through the reliable hosting and management of its electronic data and computer applications. Students and loan servicers benefit indirectly from the stable operation of systems that manage federal student loans. The services ensure the continuity of operations for critical student loan servicing functions. The contract supports the Department of Education's mission to service student loans effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if renewal options are exercised without re-competition.
Reliance on a single contractor for critical data center functions poses a risk if performance issues arise.
The contract's one-year base period may lead to frequent re-procurement efforts, potentially increasing administrative burden.

Positive Signals

Award to a well-established IT services provider with a track record in the federal sector.
The use of full and open competition suggests a robust evaluation process and competitive pricing.
Firm-fixed-price contract provides cost certainty for the government.
The contract supports a critical government function, ensuring operational continuity for student aid programs.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management and data center operations. The federal government is a significant consumer of such services, with substantial spending allocated to maintaining and modernizing its IT infrastructure. Comparable spending benchmarks for large-scale data center hosting and management services for federal agencies often run into tens of millions of dollars annually, depending on the scope and criticality of the supported functions.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business. The absence of set-aside provisions means that opportunities for small businesses to directly participate in this specific contract are limited, though they may be involved as subcontractors to the prime vendor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Education's contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of accountability through adherence to the defined scope and price. Transparency is generally maintained through contract award databases, though detailed performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Federal Student Aid IT Operations
Department of Education IT Infrastructure
Government Data Center Services
Cloud Computing Services (if applicable to virtual data center)

Risk Flags

Critical IT Infrastructure Dependency
Cybersecurity Risk for Sensitive Data
Contractor Performance Risk
Potential for Vendor Lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $42.6 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. IGF::CT::IGF CRITICAL FUNCTION: FEDERAL STUDENT AID'S VIRTUAL DATA CENTER, PROVIDING CENTRALIZED HOSTING AND MANAGEMENT OF ELECTRONIC DATA AND COMPUTER APPLICATIONS, AND RELATED SERVICES TO SUPPORT FEDERAL STUDENT AID MISSION OF SERVICING STUDENT LOANS.

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 $42.6 million.

What is the period of performance?

Start: 2012-08-31. End: 2013-08-31.

What is the track record of NTT DATA SERVICES FEDERAL GOVERNMENT, LLC in managing federal IT infrastructure contracts of similar scale and criticality?

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC has a significant presence in the federal IT services market, frequently winning large contracts across various agencies. Their experience typically includes managing complex IT infrastructure, data centers, and application hosting. For contracts of this scale (over $42 million), their track record generally indicates a capacity to deliver on critical government functions. However, a detailed review of past performance on similar student aid or financial services IT contracts would provide a more precise assessment of their specific suitability and reliability for this particular role. Past performance evaluations and any reported issues or successes on prior federal contracts would be key data points.

How does the awarded price of $42.6 million compare to market rates for similar virtual data center services?

The awarded price of $42.6 million for a one-year virtual data center contract supporting Federal Student Aid appears to be within the expected range for large-scale government IT infrastructure services. Benchmarking against industry reports and government spending data for similar managed hosting and data center facilities management contracts reveals that costs can vary significantly based on service level agreements (SLAs), security requirements, data volume, and geographic location. Given the critical nature of student aid data and the need for robust security and availability, a price in the tens of millions for a comprehensive solution is not unusual. A more precise comparison would require detailed knowledge of the specific services, uptime guarantees, and security protocols included in the contract.

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

Primary risks include potential performance failures by the contractor leading to disruptions in student aid services, cybersecurity threats to sensitive student data, and cost overruns if the firm-fixed-price model is not strictly adhered to or if scope creep occurs. Mitigation strategies typically involve robust Service Level Agreements (SLAs) with financial penalties for non-compliance, stringent cybersecurity protocols and audits mandated by the contract, and active contract management by the Department of Education to monitor performance and control scope. Regular performance reviews and contingency planning for service disruptions are also crucial.

How effective is the current virtual data center solution in supporting the mission of Federal Student Aid?

The effectiveness of the virtual data center solution is directly tied to its ability to ensure the availability, integrity, and security of the data and applications supporting Federal Student Aid's mission. As this contract is for critical functions, its effectiveness is paramount. Success would be measured by metrics such as system uptime, data processing speed, successful transaction rates, and the absence of data breaches or significant service disruptions. While the contract's existence implies a need for these services, a formal assessment of its effectiveness would require access to performance reports, user feedback, and operational metrics from the Department of Education.

What have been the historical spending patterns for Federal Student Aid's virtual data center and related IT infrastructure services?

Historical spending patterns for Federal Student Aid's virtual data center and IT infrastructure would likely show a consistent need for significant investment in these areas, given the scale of student loan operations. Spending may have evolved over time, potentially shifting from on-premises solutions to virtualized or cloud-based environments. Analyzing past contract awards, their values, and durations for similar services would reveal trends in government expenditure on IT infrastructure for student aid. This could indicate whether current spending levels are consistent with, higher than, or lower than previous years, and whether there has been a strategic shift in IT procurement.

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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Computer Corporation (UEI: 114315195)

Address: 8270 WILLOW OAKS CORPORATE DR, FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $42,649,593

Exercised Options: $42,649,593

Current Obligation: $42,649,593

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $44,126

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: ED06CO0107

IDV Type: IDC

Timeline