Education Dept. awards $60.5M for IT operations, with Avineon Inc. securing a firm-fixed-price contract

Contract Overview

Contract Amount: $60,527,211 ($60.5M)

Contractor: Avineon, Inc.

Awarding Agency: Department of Education

Start Date: 2008-11-19

End Date: 2018-11-30

Contract Duration: 3,663 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FINANCIAL MANAGEMENT SYSTEM (FMS) OPERATIONS&MAINTENANCE SERVICES

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Education obligated $60.5 million to AVINEON, INC. for work described as: FINANCIAL MANAGEMENT SYSTEM (FMS) OPERATIONS&MAINTENANCE SERVICES Key points: 1. Contract value of $60.5M over its period of performance suggests significant investment in IT infrastructure. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The firm-fixed-price structure shifts cost risk to the contractor, potentially leading to more predictable expenses. 4. The duration of the contract (over 10 years) implies a need for sustained IT support and maintenance. 5. The specific NAICS code (541513) points to a focus on computer facilities management services. 6. The award was a delivery order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle.

Value Assessment

Rating: good

The contract's total value of $60.5M over approximately 10 years averages to about $6M annually. Without specific benchmarks for FMS operations and maintenance services for a department of this size, a direct comparison is difficult. However, the firm-fixed-price nature suggests that the pricing was determined through negotiation and competition, aiming for value. The duration indicates a long-term need, and the award amount appears reasonable for sustained IT operations and maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was open, certain sources may have been excluded prior to the final award. This suggests a competitive process was intended, but the specifics of the exclusion could impact the breadth of competition. With 6 bidders, there was a moderate level of competition, which typically aids in price discovery and achieving fair market value.

Taxpayer Impact: The open competition, despite potential exclusions, suggests that taxpayers benefited from a process designed to solicit multiple bids, likely leading to a more competitive price than a sole-source award.

Public Impact

The primary beneficiaries are the Department of Education and its staff, who rely on the Financial Management System (FMS) for critical operations. The services delivered include essential operations and maintenance for the FMS, ensuring its functionality and reliability. The geographic impact is primarily within the Department of Education's operational locations, likely concentrated in Washington D.C. and potentially other federal offices. Workforce implications include the direct employment of IT professionals by Avineon, Inc. to perform these services, as well as the indirect impact on federal employees who utilize the FMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'EXCLUSION OF SOURCES' clause in the competition type warrants further investigation to understand the rationale and impact on overall competition.
The long contract duration (over 10 years) could present risks if technology evolves rapidly or if the contractor's performance falters over time.
The reliance on a single contractor for critical FMS operations and maintenance could create vendor lock-in.

Positive Signals

The award was made under full and open competition, indicating an effort to maximize bidder participation.
The firm-fixed-price contract type generally provides cost certainty for the government.
The contract was awarded to Avineon, Inc., suggesting they possess the necessary expertise for these IT services.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and upgrading federal IT infrastructure. The $60.5M award over its term is substantial for a single system's operations and maintenance, reflecting the critical nature of financial management systems for government agencies. Comparable spending benchmarks would typically involve analyzing other large federal agencies' IT O&M contracts for similar financial systems.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests the contract was not specifically set aside for small businesses, nor does it appear to have significant subcontracting requirements mandated for small businesses. Consequently, the direct impact on the small business ecosystem for this particular award is likely minimal, though the prime contractor may engage small businesses as subcontractors at their discretion.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program/technical monitors within the Department of Education. The firm-fixed-price nature shifts some financial risk to the contractor, but performance monitoring remains crucial. Transparency is facilitated by contract award databases, but detailed performance metrics and oversight reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Financial Management Systems
IT Operations and Maintenance Services
Department of Education IT Contracts
Large IT Service Contracts
Information Technology Professional Services

Risk Flags

Potential for reduced competition due to 'Exclusion of Sources'
Risk of technological obsolescence over long contract duration
Contractor performance degradation over extended period
Potential for cost overruns if scope is not well-defined for FFP

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $60.5 million to AVINEON, INC.. FINANCIAL MANAGEMENT SYSTEM (FMS) OPERATIONS&MAINTENANCE SERVICES

Who is the contractor on this award?

The obligated recipient is AVINEON, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $60.5 million.

What is the period of performance?

Start: 2008-11-19. End: 2018-11-30.

What is the historical spending trend for Financial Management System (FMS) Operations & Maintenance Services at the Department of Education?

Analyzing historical spending for FMS O&M at the Department of Education requires access to detailed budget and contract data over multiple fiscal years. Without specific historical data, it's challenging to establish a precise trend. However, the $60.5M award over approximately 10 years suggests an average annual spend of around $6M for this specific contract. Federal agencies typically maintain IT systems like FMS continuously, implying consistent, albeit potentially fluctuating, spending. Factors influencing historical spending could include system upgrades, changes in technology, security requirements, and the overall size and complexity of the department's financial operations. A comprehensive analysis would involve reviewing past contract awards, task orders, and budget allocations related to FMS O&M to identify patterns, increases, or decreases in investment over time.

How does the awarded amount compare to similar IT operations and maintenance contracts for financial management systems in other federal agencies?

Directly comparing the $60.5M award for FMS O&M to similar contracts across federal agencies is complex due to variations in system scope, complexity, user base, and contract duration. However, for a large federal department, an average annual spend of approximately $6M for critical financial system O&M is within a plausible range. Larger agencies with more intricate financial systems and a greater number of users might see higher annual expenditures. Conversely, smaller agencies or those with less complex systems could have lower costs. Benchmarking would ideally involve comparing contracts with similar service requirements (e.g., help desk, system updates, security patching, database management) and contract types (firm-fixed-price) for systems of comparable criticality and scale. The firm-fixed-price nature here suggests a negotiated value based on anticipated work.

What are the key performance indicators (KPIs) used to measure the success of Avineon, Inc.'s performance under this contract?

While the specific Key Performance Indicators (KPIs) for this contract are not publicly detailed, typical metrics for IT Operations & Maintenance (O&M) services, especially for financial management systems, often include system uptime/availability, response times for issue resolution, patch deployment success rates, security vulnerability remediation timelines, and user satisfaction. For a firm-fixed-price contract, the government would closely monitor adherence to service level agreements (SLAs) tied to these KPIs. Failure to meet critical performance standards could result in penalties or remedies outlined in the contract. The Department of Education's technical monitors would be responsible for tracking these metrics and ensuring Avineon, Inc. meets the required performance standards to maintain the FMS's operational integrity.

What is Avineon, Inc.'s track record with the Department of Education and other federal agencies for IT services?

Avineon, Inc. has a history of providing IT and engineering services to various government agencies, including the Department of Education. Publicly available contract databases show multiple awards to Avineon, Inc. from different federal entities over the years. Their track record with the Department of Education specifically would involve reviewing past contracts, their performance evaluations (if accessible), and any reported issues or successes. Generally, a company winning a significant, long-term contract like this suggests a satisfactory performance history and demonstrated capability. However, a deeper dive into past performance reviews and contract close-outs would provide a more definitive assessment of their reliability and expertise in delivering IT O&M services.

What are the potential risks associated with a firm-fixed-price contract for IT operations and maintenance over a long duration?

Firm-fixed-price (FFP) contracts, while offering cost certainty, carry specific risks, especially for long-duration IT O&M. A primary risk is that the contractor, Avineon, Inc., might face unforeseen cost increases (e.g., labor, software licensing) that erode their profit margin, potentially leading to reduced service quality or attempts to cut corners if not strictly monitored. Conversely, if the scope of work is not precisely defined or if technological advancements require significant deviations, the government might end up paying more than necessary if the contractor efficiently manages costs. For long durations (over 10 years), the risk of technological obsolescence is also significant; the FFP structure might not easily accommodate necessary, costly upgrades or shifts to newer technologies without contract modifications, potentially leading to a system that becomes outdated.

How does the 'EXCLUSION OF SOURCES' clause in the contract's competition type affect transparency and potential cost savings for taxpayers?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause indicates that while the competition was intended to be open, certain potential bidders were excluded prior to the solicitation or evaluation phase. The specific reasons for these exclusions are critical to understanding the impact. If the exclusions were based on legitimate technical qualifications or prior performance issues, it might not significantly harm competition. However, if the exclusions were arbitrary or overly restrictive, it could limit the number of bidders, potentially reducing competitive pressure and leading to higher prices for taxpayers. Transparency is somewhat diminished as the full universe of potential competitors was not considered. Taxpayers benefit most from broad competition; therefore, any exclusion warrants scrutiny to ensure it was justified and did not inflate costs.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4825 MARK CENTER DR STE 700, ALEXANDRIA, VA, 22311

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Subchapter S Corporation, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $60,527,211

Exercised Options: $60,527,211

Current Obligation: $60,527,211

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: ED08CO0053

IDV Type: IDC

Timeline