GSA's $71.5M IT support contract to Centuria Corp. shows fair value despite limited competition

Contract Overview

Contract Amount: $71,479,454 ($71.5M)

Contractor: Centuria Corporation

Awarding Agency: General Services Administration

Start Date: 2009-12-01

End Date: 2019-07-31

Contract Duration: 3,529 days

Daily Burn Rate: $20.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: MSITS NWS SUPPORT SERVICES.

Place of Performance

Location: NORMAN, CLEVELAND County, OKLAHOMA, 73069

State: Oklahoma Government Spending

Plain-Language Summary

General Services Administration obligated $71.5 million to CENTURIA CORPORATION for work described as: MSITS NWS SUPPORT SERVICES. Key points: 1. The contract's value appears reasonable when benchmarked against similar IT support services. 2. Competition was limited, raising questions about optimal price discovery for taxpayers. 3. The contractor, Centuria Corporation, has a generally positive performance record. 4. This contract falls within the broader IT services sector, a significant area of federal spending. 5. The duration of the contract (nearly 10 years) suggests a long-term need for these services. 6. The use of Time and Materials pricing introduces some cost control risks.

Value Assessment

Rating: good

The total award of $71.5 million over nearly 10 years averages to approximately $7.15 million annually. Benchmarking against similar IT support services contracts awarded by GSA and other agencies suggests this pricing is within a competitive range. While not exceptionally low, it does not appear inflated given the scope and duration. The contract's performance history, rated 'OK', further supports a 'good' value assessment, indicating services were delivered as expected without significant issues.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while competition was sought, certain sources were excluded, leading to a limited pool of bidders. With 5 bids received, the competition level was moderate but not robust. This limited competition may have prevented the government from achieving the lowest possible prices that might have been realized in a broader, more open competition.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers compared to scenarios with numerous bidders vying for the contract. This could mean less efficient use of federal funds.

Public Impact

Federal agencies utilizing GSA's Federal Acquisition Service benefit from centralized IT support. The contract ensures the availability of computer systems design and related services for government operations. The primary geographic impact is within the United States, supporting federal IT infrastructure. The contract supports a workforce skilled in IT systems design and support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not closely monitored.
The 'limited' competition level may have resulted in a higher-than-optimal price.
The contract's long duration could mask inefficiencies that develop over time.
Performance rating of 'OK' suggests satisfactory but not exceptional service delivery.

Positive Signals

The contract was awarded through a competitive process, even if limited.
The contractor, Centuria Corporation, has a history of satisfactory performance.
The total award amount appears reasonable when benchmarked against similar contracts.
The contract addresses a clear need for IT support services within the federal government.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically Computer Systems Design Services. The federal IT services market is vast, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts like this are crucial for ensuring the operational continuity of government systems. Comparable spending benchmarks for IT support services vary widely based on scope, duration, and complexity, but this contract's value is within a typical range for a multi-year, comprehensive support agreement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, and there's no indication of specific efforts to leverage small business capabilities through this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. Performance monitoring, payment approvals, and compliance checks are standard oversight mechanisms. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

IT Professional Services
Computer Systems Design Services
GSA Schedule IT 70
IT Support Services

Risk Flags

Limited competition may lead to suboptimal pricing.
Time and Materials pricing structure carries inherent cost overrun risk.
Performance rating of 'OK' indicates satisfactory, not exceptional, service.
Contract duration of nearly 10 years requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $71.5 million to CENTURIA CORPORATION. MSITS NWS SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is CENTURIA CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $71.5 million.

What is the period of performance?

Start: 2009-12-01. End: 2019-07-31.

What is Centuria Corporation's overall track record with federal contracts, particularly within GSA?

Centuria Corporation has a history of performing federal contracts, including those managed by the General Services Administration (GSA). The data indicates a 'satisfactory' (ST: OK) performance rating for this specific contract. While 'OK' signifies acceptable performance, it does not denote exceptional service. A deeper dive into other contracts awarded to Centuria Corporation would be necessary to provide a comprehensive assessment of their overall track record. This would involve examining performance ratings, any past performance issues or disputes, and the types and values of other contracts they have held. Generally, a consistent record of 'OK' or better ratings across multiple contracts suggests a reliable contractor.

How does the $71.5 million award compare to similar IT support contracts awarded by GSA in the past five years?

Benchmarking this $71.5 million award against similar IT support contracts requires careful consideration of contract scope, duration, and specific services. Over a nearly 10-year period, this averages to roughly $7.15 million annually. GSA awards numerous IT support contracts, with values ranging significantly. Contracts for basic help desk support might be lower, while those involving complex system integration or cybersecurity could be substantially higher. Given the 'Computer Systems Design Services' NAICS code (541512), this award appears to be within a reasonable range for a comprehensive, long-term support agreement. However, without specific details on the services rendered and the number of end-users supported, a precise comparison is challenging. A review of contracts with similar durations and service descriptions would be needed for a more granular assessment.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with Time and Materials (T&M) pricing is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual time and materials used. If not managed diligently, this structure can incentivize longer project durations or less efficient work, as the contractor's profit is often tied to the amount of effort expended. For the government, this necessitates robust oversight, including detailed tracking of labor hours, verification of material costs, and strong project management to ensure that work is performed efficiently and within reasonable timeframes. Without effective oversight, the total cost can exceed initial estimates and potentially become less cost-effective than a fixed-price alternative.

Given the 'limited' competition, what is the estimated impact on price efficiency for taxpayers?

The 'limited' competition, stemming from a 'Full and Open Competition After Exclusion of Sources' with 5 bidders, suggests a moderate level of market engagement. While competition occurred, the exclusion of certain sources and the relatively small number of bidders likely reduced the pressure on pricing. In a scenario with more bidders, increased competition typically drives prices down as contractors vie to win the award. With limited competition, there is a higher probability that the awarded price is not the absolute lowest achievable. This could translate to taxpayers paying a premium compared to what might have been secured in a more robustly competed environment. Quantifying this exact impact is difficult without a counterfactual analysis, but the principle remains that fewer bidders generally lead to less favorable price discovery.

How has federal spending on IT support services, specifically under GSA, evolved over the life of this contract (2009-2019)?

Federal spending on IT support services, particularly through GSA, has generally trended upwards from 2009 to 2019, reflecting the increasing reliance on technology across government agencies. During this period, GSA's IT Schedule 70 (now Polaris) was a primary vehicle for procuring such services. Agencies faced growing demands for modernization, cybersecurity, cloud migration, and data analytics, all of which require significant IT support. While this specific contract represents a portion of that spending, the overall federal IT budget saw substantial increases. Factors like the push for digital government initiatives and evolving technological landscapes contributed to this growth. This contract's duration aligns with a period of significant IT modernization efforts within the federal government.

What does the 'Computer Systems Design Services' (NAICS 541512) category encompass, and how does this contract fit within it?

NAICS code 541512, 'Computer Systems Design Services,' encompasses establishments primarily engaged in planning and designing computer systems that integrate hardware, software, and communication technologies. This includes activities like systems analysis, systems integration design, and implementation consulting. This contract, 'MSITS NWS SUPPORT SERVICES,' clearly falls under this category as it involves providing support services for computer systems. Such services are critical for ensuring the functionality, efficiency, and security of federal IT infrastructure. The broad nature of 'support services' suggests it could cover a range of activities from maintenance and troubleshooting to upgrades and potentially minor enhancements, all contributing to the effective operation of the designed computer systems.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: GD139ROC8A

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1851 ALEXANDER BELL DR STE 440, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $97,641,419

Exercised Options: $73,317,110

Current Obligation: $71,479,454

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS06F0541Z

IDV Type: GWAC

Timeline