DoD's $61.3M IGF Modernization contract awarded to PHACIL, LLC for network services

Contract Overview

Contract Amount: $61,290,495 ($61.3M)

Contractor: Phacil, LLC

Awarding Agency: Department of Defense

Start Date: 2013-11-15

End Date: 2022-01-31

Contract Duration: 2,999 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE

Sector: IT

Official Description: IGF::CT::IGF MODERNIZATION EASTERN RANGE NETWORK

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $61.3 million to PHACIL, LLC for work described as: IGF::CT::IGF MODERNIZATION EASTERN RANGE NETWORK Key points: 1. Contract value of $61.3M over nearly 8 years suggests significant investment in network infrastructure. 2. Awarded under 'Full and Open Competition After Exclusion of Sources', indicating a specific justification for limited competition. 3. The Fixed Price Incentive (FPI) contract type introduces performance risk for the contractor and potential cost savings for the government. 4. The contract duration of 2999 days (over 8 years) points to a long-term need for sustained network services. 5. The contractor, PHACIL, LLC, has been awarded this significant sum, warranting scrutiny of their past performance and capacity. 6. The 'Computer Systems Design Services' NAICS code points to a focus on IT infrastructure and support. 7. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The contract value of $61.3 million over approximately 8 years for network modernization services appears substantial. Benchmarking this against similar large-scale IT infrastructure projects within the Department of Defense is crucial. The Fixed Price Incentive (FPI) structure suggests an attempt to balance cost control with performance, but the ultimate value-for-money will depend on the achievement of incentive targets and the contractor's ability to manage costs effectively. Without specific performance metrics or comparison data, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation implies that while the competition was intended to be open, specific circumstances led to the exclusion of certain sources. The exact reasons for this exclusion are not detailed but typically involve national security, proprietary technology, or unique capabilities. The limited nature of the competition may have restricted the number of potential bidders, potentially impacting price discovery and the government's ability to secure the most competitive pricing.

Taxpayer Impact: The limited competition may have resulted in higher costs for taxpayers compared to a truly open competition with multiple bidders. It also raises questions about whether the government received the best possible value due to a restricted bidder pool.

Public Impact

The primary beneficiaries are the Department of Defense and its Air Force component, receiving modernized network capabilities essential for operations. The services delivered include computer systems design and network support, crucial for maintaining secure and efficient communication. The geographic impact is likely concentrated within the operational areas supported by the Air Force, potentially worldwide. Workforce implications could include the need for specialized IT personnel within the contractor organization and potential impacts on government IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential price inflation and reduced innovation.
The long contract duration could lead to vendor lock-in and challenges in adapting to future technological advancements.
The FPI contract type, while incentivizing performance, can lead to cost overruns if not managed meticulously.
The 'Exclusion of Sources' justification requires careful review to ensure it was truly necessary and not a barrier to fair competition.

Positive Signals

The FPI contract structure aims to align contractor incentives with government objectives, potentially leading to better performance.
Awarding to a single contractor for a large, complex project can ensure focused expertise and streamlined project management.
The contract's long duration suggests a commitment to sustained network modernization, indicating a strategic investment.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and network services. The IT services market is highly dynamic and competitive, with significant government spending allocated to modernization and cybersecurity. The $61.3 million value positions this as a substantial project within the federal IT landscape. Comparable spending benchmarks would involve analyzing other large-scale network infrastructure and IT modernization contracts awarded by defense agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the large contract value and specialized nature of computer systems design services, it is unlikely that small businesses would be the primary awardees, though they could potentially participate as subcontractors. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Inspector General (IG) of the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency would be enhanced through contract award databases and reporting requirements, though specific performance metrics and detailed justifications for the 'Exclusion of Sources' may not be publicly available.

Related Government Programs

DoD IT Modernization Programs
Air Force Network Infrastructure Contracts
Computer Systems Design Services Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles
Fixed Price Incentive Contracts

Risk Flags

Limited competition justification requires scrutiny.
Potential for cost overruns with FPI contract type.
Risk of technological obsolescence due to long contract duration.
Need for detailed past performance review of PHACIL, LLC.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.3 million to PHACIL, LLC. IGF::CT::IGF MODERNIZATION EASTERN RANGE NETWORK

Who is the contractor on this award?

The obligated recipient is PHACIL, 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 $61.3 million.

What is the period of performance?

Start: 2013-11-15. End: 2022-01-31.

What was the specific justification for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?

The designation 'Full and Open Competition After Exclusion of Sources' typically implies that the agency initially intended to compete the contract broadly but subsequently found reasons to limit the pool of eligible bidders. Common justifications include the need for a specific proprietary technology, unique capabilities possessed by only one or a few contractors, national security concerns, or the requirement to leverage existing infrastructure or expertise tied to a particular vendor. Without access to the agency's internal documentation and justification records, the precise reason for excluding other sources for this IGF Modernization contract remains unknown. This lack of transparency can raise concerns about whether the government truly explored all viable options to ensure the most competitive outcome for taxpayers.

How does the performance of PHACIL, LLC on similar contracts compare to the $61.3 million value of this award?

Assessing PHACIL, LLC's track record is crucial given the significant $61.3 million value of the IGF Modernization contract. A review of their past performance on comparable federal contracts, particularly those involving network modernization, computer systems design, and large-scale IT infrastructure projects for defense agencies, would be necessary. Key indicators to examine include on-time delivery, adherence to budget, quality of services rendered, and any history of contract disputes or performance issues. If PHACIL has a strong history of successful project execution and positive past performance reviews, it would lend confidence to their ability to manage this substantial award effectively. Conversely, any documented performance deficiencies would represent a significant risk factor.

What are the potential risks associated with the Fixed Price Incentive (FPI) contract type for this network modernization project?

The Fixed Price Incentive (FPI) contract type introduces a shared risk and reward dynamic between the government and the contractor. For this $61.3 million network modernization project, the primary risk for the government is that the final cost could exceed the target price if the contractor incurs higher-than-expected costs, even though the contractor's profit is capped. Conversely, the contractor bears the risk of cost overruns impacting their profit margin. The incentive aspect means that if costs are lower than the target, both parties share in the savings, which can be beneficial. However, the complexity of network modernization can make accurate cost estimation challenging, potentially leading to disputes over incentive targets and final costs. Effective oversight is critical to ensure the contractor is managing costs prudently and that the incentive structure is driving the desired outcomes without excessive government expenditure.

How does the $61.3 million spending on IGF Modernization compare to historical spending on similar network infrastructure projects within the Air Force?

To contextualize the $61.3 million award for IGF Modernization, a comparative analysis of historical spending on similar network infrastructure projects within the Department of the Air Force is essential. This involves examining data from previous years to identify trends in contract values, project scopes, and the types of services procured for network upgrades and modernization. Understanding whether this $61.3 million represents an increase, decrease, or stable level of investment compared to past efforts provides insight into the agency's strategic priorities and budget allocation for network capabilities. If historical data shows a pattern of significant investment in network modernization, this contract aligns with that trend. If it represents a substantial departure, further investigation into the drivers behind this specific award would be warranted.

What are the implications of the contract's long duration (nearly 8 years) for technological relevance and future adaptability?

The nearly 8-year duration of this $61.3 million contract for IGF Modernization presents both opportunities and challenges regarding technological relevance and future adaptability. On the one hand, the extended period allows for sustained focus and implementation of complex network upgrades, ensuring long-term stability. On the other hand, the rapid pace of technological advancement in IT means that network solutions implemented early in the contract could become outdated before its completion. This necessitates robust contract management to ensure the contractor incorporates flexibility, modularity, and upgrade paths within the designed systems. The government must also consider mechanisms for incorporating new technologies or adapting the scope as needed, potentially through contract modifications or future procurements, to avoid obsolescence and maintain a cutting-edge network infrastructure.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: BY Light Professional IT Services LLC

Address: 8484 WESTPARK DRIVE SUITE 600, MCLEAN, VA, 22102

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,559,073

Exercised Options: $62,559,073

Current Obligation: $61,290,495

Actual Outlays: $1,175,729

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS06F0651Z

IDV Type: GWAC

Timeline