Department of Education's $40.9M virtual data center contract awarded to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC

Contract Overview

Contract Amount: $40,909,571 ($40.9M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of Education

Start Date: 2013-09-01

End Date: 2015-12-30

Contract Duration: 850 days

Daily Burn Rate: $48.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CRITICAL FUNCTION IGF::CT::IGF 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: PLANO, COLLIN County, TEXAS, 75023

State: Texas Government Spending

Plain-Language Summary

Department of Education obligated $40.9 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: CRITICAL FUNCTION IGF::CT::IGF 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 Aid. 2. A firm-fixed-price contract was used, indicating defined scope and cost. 3. The duration of the contract was 850 days. 4. The award was made under full and open competition. 5. The contractor, NTT DATA SERVICES FEDERAL GOVERNMENT, LLC, has a significant presence in federal IT services. 6. The contract value represents a portion of the Department of Education's IT spending.

Value Assessment

Rating: good

The contract value of approximately $40.9 million over 850 days suggests a moderate annual spend for IT infrastructure services. Benchmarking against similar contracts for virtual data center operations and management would be necessary for a precise value-for-money assessment. However, the firm-fixed-price structure implies that the government has a clear understanding of the costs involved, which can be advantageous. The absence of significant contract modifications or overruns, if applicable, would further support a 'good' rating.

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 5 bidders suggests a reasonably competitive environment, which typically leads to better price discovery and potentially more favorable terms for the government. The level of competition is a positive indicator for achieving value for taxpayer dollars.

Taxpayer Impact: Full and open competition ensures that the government explores a wide range of solutions and pricing, maximizing the potential for cost savings and obtaining the best value for taxpayers.

Public Impact

Students and borrowers benefit from the reliable operation of Federal Student Aid's IT systems. The contract ensures the continuous availability of electronic data and computer applications supporting student loan servicing. The services provided are crucial for the day-to-day operations of the Department of Education's student aid mission. The contract supports IT professionals employed by NTT DATA SERVICES FEDERAL GOVERNMENT, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm-fixed-price contract type helps control costs and provides budget certainty.
The contract supports a critical function for Federal Student Aid's mission.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management. The market for such services is large and competitive, with numerous providers offering solutions for data center hosting, management, and related IT support. The Department of Education's spending on virtual data centers is part of a broader trend among federal agencies to modernize IT infrastructure, often moving towards cloud-based or consolidated virtual environments to improve efficiency and reduce costs. Comparable spending benchmarks would typically be found within IT services categories for federal agencies of similar size and mission scope.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem from this particular award is not evident from the data. Further investigation into subcontracting reports would be needed to assess any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of Education. Accountability measures are inherent in the firm-fixed-price contract structure, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is generally facilitated through contract award databases and reporting requirements, though specific oversight reports or Inspector General involvement would depend on performance and any identified issues.

Related Government Programs

Federal Student Aid IT Modernization
Department of Education IT Infrastructure
Virtual Data Center Services
Cloud Computing Services (if applicable)
IT Operations and Maintenance

Risk Flags

Cybersecurity Risk
Performance Dependency
Data Integrity and Availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $40.9 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. CRITICAL FUNCTION IGF::CT::IGF 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 $40.9 million.

What is the period of performance?

Start: 2013-09-01. End: 2015-12-30.

What is the track record of NTT DATA SERVICES FEDERAL GOVERNMENT, LLC with the Department of Education and similar federal contracts?

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC has a substantial history of performing IT services for the federal government, including the Department of Education. Their portfolio often includes large-scale IT infrastructure management, application development, and modernization projects. For the Department of Education, they have likely been involved in various capacities supporting the Federal Student Aid mission and other departmental IT needs. Analyzing their past performance on similar virtual data center or IT hosting contracts would reveal their ability to meet performance requirements, manage costs, and adhere to security protocols. A review of contract performance reports and any past performance evaluations would provide deeper insights into their reliability and effectiveness in delivering critical IT services to federal agencies.

How does the per-unit cost or overall value of this contract compare to industry benchmarks for virtual data center management?

Without specific details on the exact services included (e.g., processing power, storage, network bandwidth, specific management tools), a precise per-unit cost comparison is challenging. However, the total contract value of approximately $40.9 million over roughly 2.3 years (850 days) suggests an annual spend in the range of $17-18 million. Industry benchmarks for managed data center services vary widely based on the scale of operations, level of service (e.g., colocation, managed hosting, cloud), and geographic location. Generally, federal contracts for such services are subject to competitive bidding, which aims to align pricing with market rates. If this contract was awarded competitively and without significant modifications or cost overruns, it suggests the pricing is likely within a reasonable range for the services rendered. Further analysis would require detailed service level agreements and comparison with similar government or commercial contracts.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks for this contract include potential performance issues leading to disruptions in Federal Student Aid operations, cybersecurity threats to sensitive student data, and vendor lock-in if transitioning to new solutions becomes difficult. Mitigation strategies likely involve robust Service Level Agreements (SLAs) with defined performance metrics and penalties for non-compliance, stringent cybersecurity requirements and regular audits, and clear contract clauses regarding data ownership and transition assistance. The firm-fixed-price nature of the contract also mitigates financial risk for the government by capping costs. Regular performance reviews and proactive communication between the Department of Education and NTT DATA SERVICES FEDERAL GOVERNMENT, LLC are crucial for identifying and addressing risks early.

How effective has NTT DATA SERVICES FEDERAL GOVERNMENT, LLC been in delivering services under this contract, based on performance data?

Assessing the effectiveness requires access to performance reports, contract surveillance data, and potentially user feedback from Federal Student Aid. Without this specific data, a definitive statement on effectiveness cannot be made. However, the contract's completion without significant reported issues or early termination suggests a level of satisfactory performance. Key indicators of effectiveness would include meeting uptime requirements, successful data management and security, timely support, and adherence to the scope of work. If the contract was renewed or extended, it would generally imply a positive performance history. Conversely, any documented performance deficiencies or disputes would indicate areas where effectiveness was lacking.

What are the historical spending patterns for virtual data center services at the Department of Education, and how does this contract fit in?

Historical spending patterns for virtual data center services at the Department of Education would likely show an increasing trend, mirroring broader government efforts towards IT modernization and consolidation. Agencies often transition from on-premises data centers to virtualized environments or cloud solutions to improve scalability, reduce operational costs, and enhance agility. This $40.9 million contract represents a significant investment in maintaining and managing critical IT infrastructure for Federal Student Aid. It fits into a pattern of strategic IT procurement aimed at ensuring the reliable delivery of student financial aid services. Understanding the total IT budget and how funds are allocated across different service categories (e.g., infrastructure, software, personnel) would provide context for this contract's place within the department's overall IT spending strategy.

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 Technologies Inc. (UEI: 601839660)

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

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,909,571

Exercised Options: $40,909,571

Current Obligation: $40,909,571

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $435,686

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: ED06CO0107

IDV Type: IDC

Timeline