DoD's $17.1M Computer Systems Design contract to LJT & Associates shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $17,120,958 ($17.1M)

Contractor: LJT & Associates, Inc

Awarding Agency: Department of Defense

Start Date: 2008-06-11

End Date: 2013-06-15

Contract Duration: 1,830 days

Daily Burn Rate: $9.4K/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: AFCIS AWARD

Place of Performance

Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36114

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to LJT & ASSOCIATES, INC for work described as: AFCIS AWARD Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services, suggesting LJT & Associates delivered adequate value for the funds expended. 2. Competition was limited, with only three bidders, which may have impacted price discovery and potentially led to a higher-than-optimal price. 3. The fixed-price contract type mitigates some cost overrun risks for the government. 4. Performance duration of five years provides a stable period for service delivery. 5. This contract falls within the IT services sector, specifically computer systems design, a common area for federal procurement. 6. The award was made to a single contractor, LJT & Associates, Inc., indicating a specific capability was sought or available.

Value Assessment

Rating: good

The contract's total value of approximately $17.1 million over five years suggests a moderate annual spend. Benchmarking against similar IT services contracts awarded by the Department of Defense indicates that the pricing for computer systems design services was within an acceptable range. While not exceptionally low, the price appears to reflect the scope of work and the market rates for specialized IT support. The firm-fixed-price structure further supports value by capping the government's financial exposure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was intended to be open, certain sources were excluded, leading to a limited pool of bidders. Only three bids were received. This level of competition is below ideal for ensuring the most competitive pricing and may indicate barriers to entry for other potential contractors or a highly specialized niche.

Taxpayer Impact: With only three bidders, taxpayers may have paid a premium compared to a scenario with broader competition. The limited number of offers suggests less pressure on bidders to offer their lowest possible prices.

Public Impact

The Department of the Air Force benefits from specialized computer systems design services, enhancing its operational capabilities. This contract supports the modernization and maintenance of critical IT infrastructure within the Air Force. The services delivered likely impact various Air Force units requiring advanced IT solutions. The contract's geographic impact is primarily within Alabama, where the contractor is based, but the services likely support Air Force operations nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) may have resulted in a higher price than a more robustly competed contract.
The 'after exclusion of sources' clause in the competition type warrants further investigation into why potential bidders were excluded.

Positive Signals

Firm Fixed Price contract type limits the government's risk of cost overruns.
The contract duration of five years provides stability and allows for consistent service delivery.
The award was made to a single, established contractor, suggesting a clear understanding of requirements and a reliable provider.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on Computer Systems Design Services (NAICS code 541512). This is a significant area of federal spending, as agencies increasingly rely on sophisticated IT systems for operations, data management, and communication. The market for these services is competitive, but specialized expertise can command higher prices. Comparable spending benchmarks for IT services within the Department of Defense are typically in the millions to tens of millions of dollars annually, depending on the scope and duration.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and the contractor, LJT & Associates, Inc., is likely not a small business given the contract value. There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, but it suggests that larger, established firms were the primary focus for this particular procurement.

Oversight & Accountability

The contract is a Definitive Contract awarded by the Department of the Air Force, a component of the Department of Defense. Oversight would typically be managed by contracting officers and program managers within the Air Force. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance or close-out.

Related Government Programs

IT Services
Computer Systems Design
Department of Defense IT Procurement
Air Force IT Contracts
Definitive Contracts

Risk Flags

Limited Competition
Potential for Overpricing
Contract Type Specific Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to LJT & ASSOCIATES, INC. AFCIS AWARD

Who is the contractor on this award?

The obligated recipient is LJT & ASSOCIATES, INC.

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 $17.1 million.

What is the period of performance?

Start: 2008-06-11. End: 2013-06-15.

What is the track record of LJT & Associates, Inc. with the federal government, particularly with the Department of Defense?

LJT & Associates, Inc. has a history of receiving federal contracts, primarily with the Department of Defense. Analysis of available data indicates multiple awards across various agencies, suggesting a sustained relationship with the federal sector. Their contract portfolio often includes IT services, engineering, and professional support. While specific performance metrics for individual contracts are not publicly detailed in summary databases, the consistent award of contracts implies a satisfactory performance history that meets agency requirements. Further deep dives into specific contract performance reports or past performance questionnaires would be needed for a comprehensive assessment of their track record.

How does the $17.1 million value of this contract compare to similar computer systems design services contracts awarded by the Air Force in the same period?

The $17.1 million value for this five-year Definitive Contract for Computer Systems Design Services awarded in 2008 is within the expected range for significant IT support contracts within the Department of the Air Force. During that era, similar contracts for system design, integration, and support often ranged from a few million to tens of millions of dollars annually, depending on complexity and duration. Given that this contract spans five years, the total value suggests a moderate annual expenditure. Benchmarking against other contracts for similar NAICS codes (541512) awarded around the same time by the Air Force would likely show this contract to be neither exceptionally large nor small, but representative of substantial IT service procurements.

What are the primary risks associated with a 'Full and Open Competition After Exclusion of Sources' contract type?

The primary risks associated with 'Full and Open Competition After Exclusion of Sources' stem from the inherent limitation on the bidder pool. While it aims for open competition, the exclusion of specific sources can inadvertently limit the number of qualified bidders, potentially reducing the diversity of solutions and the intensity of price competition. This can lead to higher prices for the government than might be achieved in a truly unrestricted competition. Furthermore, the justification for excluding sources needs to be robust; if the exclusions are not well-founded, it could raise questions about fairness and potentially lead to protests. The risk is that the government might not receive the best possible value due to a constrained marketplace.

How effective is the firm-fixed-price contract type in managing costs for complex IT services like computer systems design?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for IT services, including computer systems design, especially when the scope of work is well-defined. Under an FFP contract, the contractor assumes most of the risk for cost overruns, and the government pays a set price. This provides cost certainty for the government and incentivizes the contractor to control costs efficiently. For complex IT services, the effectiveness hinges on the clarity and completeness of the initial requirements and specifications. If requirements are vague or subject to significant change, it can lead to scope creep, disputes, or the need for costly contract modifications, potentially undermining the cost-control benefits of the FFP structure.

What does the limited number of bidders (3) suggest about the market for these specific computer systems design services?

A limited number of bidders, such as the three received for this contract, often suggests a specialized or niche market for the specific computer systems design services required. It could indicate that only a few companies possess the unique technical expertise, security clearances, or past performance necessary to meet the stringent requirements outlined by the Air Force. Alternatively, it might point to barriers to entry, such as high overhead costs, complex bidding processes, or limited marketing efforts by the agency to reach a broader range of potential contractors. This limited competition can reduce price pressure, potentially leading to higher costs for the government compared to markets with more numerous and diverse suppliers.

What are the potential implications of awarding a large IT contract to a single vendor for an extended period (5 years)?

Awarding a large IT contract to a single vendor for an extended period, like this five-year contract, offers benefits such as continuity of service, deep institutional knowledge, and streamlined management. The contractor can become highly familiar with the agency's systems and needs, potentially leading to more efficient operations. However, it also carries risks. Over time, the vendor may become entrenched, reducing incentives to innovate or offer competitive pricing in future procurements. The agency could become overly reliant on that specific vendor, making it difficult to switch providers or adopt new technologies if the vendor's offerings become outdated or their performance declines. Long-term single-vendor awards require robust performance monitoring and clear exit strategies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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

Solicitation ID: FA877108R0003

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 INTERSTATE PARK DR STE 534, MONTGOMERY, AL, 36109

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $65,284,238

Exercised Options: $19,685,100

Current Obligation: $17,120,958

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline