DoD's $27.5M IT services contract with Advanced Technology Systems, Inc. shows potential value concerns

Contract Overview

Contract Amount: $27,453,977 ($27.5M)

Contractor: Advanced Technology Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-07-13

End Date: 2010-03-15

Contract Duration: 1,341 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SERVICES TAS::97 0100::TAS

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to ADVANCED TECHNOLOGY SYSTEMS, INC. for work described as: IT SERVICES TAS::97 0100::TAS Key points: 1. The contract's duration and cost raise questions about cost-effectiveness over its lifespan. 2. Limited competition data suggests potential for suboptimal pricing. 3. The use of Time and Materials pricing can introduce cost escalation risks. 4. Performance context is limited without specific deliverables and outcomes. 5. This contract falls within the IT services sector, specifically computer facilities management. 6. The contract was awarded via full and open competition, indicating broad market access. 7. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

The total award of $27.5 million over approximately 3.7 years suggests an average annual spend of roughly $7.4 million. Benchmarking this against similar IT facilities management contracts requires detailed analysis of scope and service levels. However, the use of Time and Materials (T&M) pricing, especially for a contract of this duration, can be a red flag for potential cost overruns if not managed tightly. Without specific performance metrics or comparison to industry benchmarks for similar services, it's difficult to definitively assess value for money, but the T&M structure warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' which theoretically allows any qualified vendor to bid. However, the provided data does not specify the number of bids received. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. If only a few bids were submitted despite full and open competition, it might indicate specific market dynamics or barriers to entry for other potential contractors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, driving competition and potentially leading to better pricing and service offerings.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who receive essential IT facilities management services. Services delivered include computer facilities management, crucial for maintaining operational readiness. The geographic impact is likely concentrated within the Defense Information Systems Agency's operational areas. Workforce implications may include direct employment for Advanced Technology Systems, Inc. staff and indirect support for DoD IT personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Risk of cost escalation due to Time and Materials pricing structure over a multi-year period.
Potential for vendor lock-in if follow-on contracts are not competitively re-awarded.
Lack of specific performance metrics makes it difficult to assess efficiency and effectiveness.
The contract's duration (over 3 years) could lead to technology obsolescence if not managed proactively.

Positive Signals

Awarded through full and open competition, suggesting a broad market search.
The contractor, Advanced Technology Systems, Inc., has a track record with federal contracts.
The contract supports critical IT infrastructure for the Department of Defense.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer facilities management. This sub-sector involves the operation, maintenance, and support of data centers and related IT infrastructure. The federal government is a significant consumer of such services, with spending often driven by the need for secure, reliable, and scalable IT operations to support agency missions. Comparable spending benchmarks would involve analyzing other large-scale IT infrastructure support contracts awarded by agencies like DoD, GSA, or DHS.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from a small business set-aside. The focus remains on large business prime contractors. Any involvement of small businesses would be at the discretion of the prime contractor, Advanced Technology Systems, Inc., for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IT Infrastructure Support Services
Information Technology Professional Services
Cloud Computing Services
Cybersecurity Services
Defense Information Technology Contracting

Risk Flags

Potential for cost overruns due to T&M pricing
Risk of technology obsolescence over contract duration
Limited visibility into number of bidders despite full and open competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to ADVANCED TECHNOLOGY SYSTEMS, INC.. IT SERVICES TAS::97 0100::TAS

Who is the contractor on this award?

The obligated recipient is ADVANCED TECHNOLOGY SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2006-07-13. End: 2010-03-15.

What is the specific scope of 'Computer Facilities Management Services' under this contract, and how does it align with DISA's operational needs?

The scope of 'Computer Facilities Management Services' (NAICS 541513) typically encompasses the operation, maintenance, and support of computer systems and related facilities. This can include managing data centers, server rooms, network infrastructure, environmental controls (cooling, power), physical security, and potentially help desk support for IT infrastructure. For DISA, these services are critical for maintaining the backbone of military communication and information systems. The specific alignment would be detailed in the contract's Statement of Work (SOW), outlining requirements for uptime, performance, security protocols, and specific hardware/software managed. Without the SOW, the precise alignment remains general.

How does the Time and Materials (T&M) pricing structure potentially impact the total cost compared to a fixed-price contract for similar services?

Time and Materials (T&M) contracts allow the government to pay the contractor for the actual cost of labor hours and materials used, plus a fixed fee or fixed hourly rate. This structure offers flexibility, especially when the scope of work is not well-defined or is expected to change. However, it carries a higher risk of cost escalation for the government because the final cost is not predetermined. If not managed diligently with strict oversight on labor hours and material usage, T&M contracts can become significantly more expensive than fixed-price contracts, where the contractor assumes more risk for cost overruns. For a multi-year IT facilities management contract, a fixed-price or cost-plus-fixed-fee structure might offer better cost predictability and control.

What was the number of bids received for this contract, and how does that inform the level of competition and potential value for money?

The provided data indicates the contract was awarded under 'full and open competition,' which means the solicitation was broadly advertised, allowing any responsible source to submit an offer. However, the specific number of bids received is not detailed in the abbreviated data. A high number of bids (e.g., 5 or more) typically signifies robust competition, which generally leads to better price discovery and potentially lower costs for the government. Conversely, if only one or two bids were received despite full and open competition, it might suggest market limitations, high barriers to entry, or specific technical requirements that narrowed the field, potentially impacting the government's leverage in price negotiations and overall value for money.

Can we assess the contractor's performance history with similar federal contracts, particularly those involving IT facilities management?

Assessing Advanced Technology Systems, Inc.'s (ATS) performance history requires accessing detailed contract databases beyond the provided summary. While ATS has held federal contracts, specific performance ratings (e.g., CPARS - Contractor Performance Assessment Reporting System) for similar IT facilities management contracts would be necessary for a thorough evaluation. Positive performance trends in previous contracts, especially those with comparable scope, duration, and complexity, would indicate a lower performance risk. Conversely, a history of performance issues, cost overruns, or missed deadlines on similar contracts would raise concerns about ATS's ability to successfully execute this current award and achieve the intended value for money.

What are the potential risks associated with the contract's duration of 1341 days (approx. 3.7 years) in the rapidly evolving IT sector?

A contract duration of nearly four years in the IT sector presents several risks. Technology evolves rapidly; hardware, software, and best practices can become outdated within such a timeframe. This necessitates proactive contract management to ensure the services remain relevant and leverage current technologies. There's a risk of the contractor becoming complacent or less innovative over time. Furthermore, long-term contracts can sometimes lead to vendor lock-in, making it harder to switch providers or adopt new solutions if the incumbent's offerings become entrenched. Regular reviews and potential modifications to incorporate technological advancements are crucial to mitigate these risks and ensure the contract continues to deliver value.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Parent Company: ATS Corporation (UEI: 785561809)

Address: 7915 JONES BRANCH DR, MC LEAN, VA, 22102

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $27,453,978

Exercised Options: $27,453,977

Current Obligation: $27,453,977

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS07T00BGD0020

IDV Type: GWAC

Timeline