DoD's $35.7M Cloud Services Contract with Strategic Communications LLC Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $35,734,508 ($35.7M)
Contractor: Strategic Communications LLC
Awarding Agency: Department of Defense
Start Date: 2022-01-11
End Date: 2024-12-31
Contract Duration: 1,085 days
Daily Burn Rate: $32.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: CLOUD INFRASTRUCTURE SERVICES
Place of Performance
Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40243
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $35.7 million to STRATEGIC COMMUNICATIONS LLC for work described as: CLOUD INFRASTRUCTURE SERVICES Key points: 1. Contract awarded to Strategic Communications LLC for cloud infrastructure services. 2. Significant spending of $35.7M over the contract period. 3. Competition method raises questions about price discovery and potential value. 4. Sector context suggests potential for better pricing through broader competition.
Value Assessment
Rating: questionable
The contract's total value of $35.7M warrants a closer look, especially given the competition method. Without robust benchmarking against similar cloud services contracts, it's difficult to definitively assess if the pricing represents excellent value for the taxpayer.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may restrict the pool of potential bidders, potentially impacting price discovery and leading to less competitive pricing than a truly full and open competition.
Taxpayer Impact: The limited competition raises concerns about whether taxpayers are receiving the best possible price for these cloud services. A more open process could have driven down costs.
Public Impact
Taxpayers may be overpaying for cloud infrastructure services due to limited competition. The Department of the Air Force's spending on this contract could be optimized. Lack of transparency in the procurement process can erode public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to inflated prices.
- Lack of clear justification for excluding other sources.
- Potential for vendor lock-in with limited competition.
Positive Signals
- Contract supports critical Department of Defense operations.
- Fixed-price contract provides some cost certainty.
Sector Analysis
Cloud infrastructure services are a critical component of modern government operations, enabling data storage, processing, and application hosting. Spending benchmarks vary widely based on service type and scale, but competitive bidding is generally expected to yield better pricing.
Small Business Impact
The contract does not indicate any specific set-asides or participation goals for small businesses. Further analysis is needed to determine if small businesses were excluded or had opportunities to participate in this procurement.
Oversight & Accountability
The 'exclusion of sources' clause requires careful oversight to ensure it was justified and did not unduly limit competition. The Department of the Air Force should have clear documentation supporting this decision.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Limited competition raises concerns about price fairness.
- Potential for higher costs due to restricted vendor pool.
- Lack of transparency in source exclusion.
- Need for stronger justification for limited competition.
Tags
other-computer-related-services, department-of-defense, ky, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.7 million to STRATEGIC COMMUNICATIONS LLC. CLOUD INFRASTRUCTURE SERVICES
Who is the contractor on this award?
The obligated recipient is STRATEGIC COMMUNICATIONS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $35.7 million.
What is the period of performance?
Start: 2022-01-11. End: 2024-12-31.
What specific factors led to the exclusion of other sources in this 'full and open competition'?
The exclusion of sources suggests that while the competition was intended to be open, certain pre-defined criteria or circumstances allowed for the limitation of bidders. This could be due to specific technical requirements, existing infrastructure integration, or unique capabilities that only a limited number of vendors possessed. A thorough review of the justification documentation is necessary to understand the rationale.
How does the per-unit cost of these cloud services compare to industry benchmarks for similar government contracts?
Without specific per-unit cost data and detailed service level agreements, a direct comparison to industry benchmarks is challenging. However, given the limited competition, there is a risk that the per-unit costs may be higher than what could be achieved through a broader, more competitive procurement process. Benchmarking would require detailed analysis of the services provided.
What is the potential impact on future IT procurements if limited competition becomes a standard practice for cloud services?
If limited competition becomes standard for cloud services, it could stifle innovation and lead to consistently higher costs for the government. It may discourage new vendors from entering the market and reduce the incentive for incumbent vendors to offer competitive pricing. This could ultimately result in less efficient use of taxpayer funds for essential IT infrastructure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - SECURITY AND COMPLIANCE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 310 EVERGREEN RD # 100, LOUISVILLE, KY, 40243
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Joint Venture Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $51,801,757
Exercised Options: $46,140,740
Current Obligation: $35,734,508
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC90B
IDV Type: GWAC
Timeline
Start Date: 2022-01-11
Current End Date: 2024-12-31
Potential End Date: 2025-09-24 00:00:00
Last Modified: 2025-09-30
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