SMARTRONIX, LLC awarded $485.6M for Computer Systems Design Services by GSA

Contract Overview

Contract Amount: $485,622,789 ($485.6M)

Contractor: Smartronix, LLC

Awarding Agency: General Services Administration

Start Date: 2015-01-16

End Date: 2024-05-24

Contract Duration: 3,416 days

Daily Burn Rate: $142.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF

Place of Performance

Location: HOLLYWOOD, SAINT MARYS County, MARYLAND, 20636

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $485.6 million to SMARTRONIX, LLC for work described as: IGF::OT::IGF Key points: 1. Contract value represents significant investment in IT infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Long contract duration (over 9 years) may indicate ongoing need and potential for cost overruns. 4. Cost Plus Fixed Fee (CPFF) pricing structure can incentivize contractor to increase costs. 5. Services are categorized under Computer Systems Design, a broad IT sector. 6. Awarded by the General Services Administration (GSA), a common contracting vehicle. 7. Delivery Order under a larger contract vehicle, indicating task-based execution.

Value Assessment

Rating: fair

The contract's total value of $485.6 million over nearly a decade warrants scrutiny. While specific performance metrics are not provided, the CPFF structure requires careful monitoring to ensure costs remain reasonable and do not escalate unnecessarily. Benchmarking against similar GSA IT service contracts would be necessary to definitively assess value for money, but the sheer scale suggests a substantial investment. The contract's duration also raises questions about long-term cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this significant IT services contract. While two bidders is better than one, a higher number of competitors could potentially drive prices down further and foster greater innovation.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing due to the full and open competition. However, the limited number of bidders means there is room for improvement in price discovery.

Public Impact

Federal agencies requiring computer systems design and related IT support services benefit from this contract. The services delivered likely encompass a range of IT solutions, from system design to implementation and maintenance. The contract's primary geographic impact is in Maryland, where the contractor is located. The contract supports IT professionals and potentially other roles within the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely managed.
Long contract duration (over 9 years) may not reflect current market prices or evolving technological needs.
Limited number of bidders (2) suggests potential for higher prices than with broader competition.
Lack of specific performance metrics makes it difficult to assess efficiency and effectiveness.
Contract value is substantial, increasing the financial risk associated with any performance issues.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
Contractor (SMARTRONIX, LLC) has secured a significant award, suggesting a level of established capability.
GSA contract vehicles are generally designed for efficiency and cost savings for federal agencies.
The contract addresses a core IT service need for government operations.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically Computer Systems Design Services. This is a critical area for government operations, encompassing the design, development, and integration of complex IT systems. The market for these services is highly competitive, with numerous large and small businesses vying for federal contracts. GSA's role as an intermediary often streamlines the procurement process for agencies, but the overall market dynamics are driven by technological advancements and agency-specific requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). There is no explicit information on subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business IT ecosystem is unclear, though large prime contracts often involve some level of subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA) and potentially the contracting agency utilizing the delivery order. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is generally facilitated through contract award databases, but detailed performance and cost reporting may be internal to the agencies involved. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

GSA IT Schedule 70
IT Professional Services
Computer Systems Design
Cloud Computing Services
Cybersecurity Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires close monitoring to prevent cost overruns.
Long contract duration may lead to outdated services or increased costs over time.
Limited number of bidders (2) could indicate suboptimal price competition.
Lack of specific performance metrics makes objective assessment of value difficult.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $485.6 million to SMARTRONIX, LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is SMARTRONIX, LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $485.6 million.

What is the period of performance?

Start: 2015-01-16. End: 2024-05-24.

What is SMARTRONIX, LLC's track record with federal contracts, particularly those of similar size and scope?

SMARTRONIX, LLC has a history of securing federal contracts, primarily within the IT and defense sectors. Their awards often involve complex IT services, including systems integration, cybersecurity, and cloud solutions. Analyzing their past performance on large-scale contracts, especially those with Cost Plus Fixed Fee (CPFF) structures, is crucial. A review of their contract history would reveal their ability to manage budgets, meet deadlines, and deliver on technical requirements. Past performance evaluations and any reported issues or successes on previous GSA or other agency contracts would provide valuable context for assessing their reliability and capability in executing this current $485.6 million award.

How does the awarded price compare to market rates for similar Computer Systems Design Services?

Determining the precise value for money requires a detailed comparison against market rates for Computer Systems Design Services. This involves benchmarking the labor categories, hours, and overhead rates against industry standards and other government contracts. Given the Cost Plus Fixed Fee (CPFF) structure, it's essential to analyze the 'fixed fee' component and the 'cost' ceiling. If the total cost, including the fee, significantly exceeds benchmarks for comparable services, it could indicate overpricing or inefficient service delivery. The limited competition (two bidders) might also suggest that market rates were not fully realized through competitive pressure. A thorough analysis would involve examining the specific tasks performed and the complexity involved relative to the price.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks with a CPFF contract of this magnitude ($485.6 million) and duration (over 9 years) revolve around cost control and potential for contractor inefficiency. CPFF contracts provide the contractor with reimbursement for allowable costs plus a fixed fee representing profit. This structure can incentivize the contractor to increase costs, as their profit margin (the fixed fee) remains constant regardless of the total cost incurred. Effective oversight is critical to ensure that all costs are reasonable, allocable, and allowable. Without stringent monitoring and auditing, there's a risk of cost overruns and reduced value for taxpayer money. The long duration also increases the risk of scope creep and the potential for the contract to become outdated before completion.

How effective has GSA been in managing similar large-scale IT service contracts awarded through full and open competition?

The General Services Administration (GSA) manages a vast portfolio of IT service contracts, many of which are awarded through full and open competition. Their effectiveness can be assessed by examining contract performance metrics, customer satisfaction surveys, and the overall value delivered to federal agencies. GSA's IT Schedule 70 (now IT Professional Services) is a primary vehicle for such procurements, designed to offer competitive pricing and streamlined acquisition. While GSA generally aims for efficiency, the effectiveness of managing any large contract depends heavily on the specific program office, the contract type, and the diligence of oversight. Analyzing GSA's historical success rates, dispute resolutions, and cost savings achieved on comparable contracts would provide insight into their management capabilities.

What are the historical spending patterns for Computer Systems Design Services within the General Services Administration?

Historical spending patterns for Computer Systems Design Services within the GSA reveal a consistent and significant demand from federal agencies. GSA acts as a procurement agent, facilitating access to IT services through various contract vehicles, including IT Schedules. Spending in this category typically fluctuates based on agency modernization initiatives, cybersecurity needs, and the adoption of new technologies like cloud computing. Analyzing GSA's historical data would show trends in contract awards, average contract values, and the distribution of spending across different service types within computer systems design. This context helps in understanding whether the $485.6 million award to SMARTRONIX, LLC aligns with or deviates from established spending norms for this category.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 44150 SMARTRONIX WAY, HOLLYWOOD, MD, 20636

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Minority Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $523,270,857

Exercised Options: $523,270,857

Current Obligation: $485,622,789

Subaward Activity

Number of Subawards: 461

Total Subaward Amount: $286,406,941

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0050

IDV Type: GWAC

Timeline