DoD's $45.3M Software/Hardware Agreement with Four LLC Raises Questions on Competition and Value
Contract Overview
Contract Amount: $45,300,000 ($45.3M)
Contractor: Four LLC
Awarding Agency: Department of Defense
Start Date: 2022-09-16
End Date: 2025-08-16
Contract Duration: 1,065 days
Daily Burn Rate: $42.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: PALO ALTO ENTERPRISE AGREEMENT FOR SOFTWARE SUPPORT AND HARDWARE MAINTENANCE
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $45.3 million to FOUR LLC for work described as: PALO ALTO ENTERPRISE AGREEMENT FOR SOFTWARE SUPPORT AND HARDWARE MAINTENANCE Key points: 1. The $45.3 million agreement for software support and hardware maintenance with Four LLC appears to be a significant expenditure. 2. The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which warrants further scrutiny regarding its competitive nature. 3. The duration of the contract (over 3 years) and its firm fixed-price nature suggest potential for cost savings if managed effectively. 4. The sector is IT services, specifically 'Other Computer Related Services,' a broad category that requires clear definition of deliverables.
Value Assessment
Rating: fair
The total award amount is $45.3 million. Without specific per-unit cost breakdowns or benchmarks for similar software support and hardware maintenance contracts, it is difficult to definitively assess pricing fairness. The 'Other Computer Related Services' NAICS code is broad, making direct comparisons 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 method implies that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders and impacting price discovery. The rationale for excluding sources needs to be clearly documented.
Taxpayer Impact: The impact on taxpayers is uncertain without a clear understanding of the competitive landscape and whether the exclusion of sources led to a suboptimal price.
Public Impact
Taxpayers may be paying more than necessary due to potentially limited competition. The effectiveness of IT support and hardware maintenance for the Defense Information Systems Agency could be impacted by the chosen vendor. Transparency in government contracting is crucial; the 'exclusion of sources' clause requires clear justification to maintain public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition due to exclusion of sources
- Broad NAICS code makes value assessment difficult
- Potential for overpayment if competition was truly restricted
Positive Signals
- Firm fixed-price contract can provide cost certainty
- Long-term agreement may ensure continuity of services
Sector Analysis
This contract falls within the Information Technology sector, specifically 'Other Computer Related Services.' Spending in this area is substantial across government agencies, with benchmarks varying widely based on the specific services and hardware involved. The DoD's IT spending is among the largest, making efficient procurement critical.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses were likely not primary participants in this procurement, which could represent a missed opportunity for their engagement.
Oversight & Accountability
The 'exclusion of sources' clause in the contract award necessitates robust oversight to ensure the justification for exclusion was valid and that the procurement process remained fair. Accountability for the final price and service delivery rests with the Defense Information Systems Agency.
Related Government Programs
- Other Computer Related Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Lack of clear justification for source exclusion
- Broad NAICS code hinders precise value assessment
- Potential for limited competition leading to higher costs
- Absence of explicit performance metrics in provided data
Tags
other-computer-related-services, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.3 million to FOUR LLC. PALO ALTO ENTERPRISE AGREEMENT FOR SOFTWARE SUPPORT AND HARDWARE MAINTENANCE
Who is the contractor on this award?
The obligated recipient is FOUR LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $45.3 million.
What is the period of performance?
Start: 2022-09-16. End: 2025-08-16.
What was the specific justification for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?
The justification for excluding sources is critical for understanding the competitive environment. If legitimate technical or security reasons existed, the price might be justified. However, if exclusions were arbitrary, it could indicate a lack of true competition, potentially leading to inflated costs for taxpayers. A thorough review of the solicitation and award documents is needed to assess the validity of these exclusions and their financial implications.
How does the $45.3 million award compare to industry benchmarks for similar software support and hardware maintenance contracts for defense agencies?
Benchmarking this $45.3 million award requires detailed comparison with similar contracts, considering factors like the specific software and hardware covered, the level of support required, and the duration. Without access to proprietary pricing data or a detailed scope of work, direct comparison is challenging. However, the broad 'Other Computer Related Services' NAICS code suggests a need for granular analysis to ensure the price reflects fair market value for the services rendered.
What are the key performance indicators (KPIs) and service level agreements (SLAs) in place to measure the effectiveness of the software support and hardware maintenance provided under this agreement?
Measuring the effectiveness of this $45.3 million agreement hinges on clearly defined KPIs and SLAs. These metrics should cover aspects like system uptime, response times for support requests, resolution rates, and hardware reliability. The Defense Information Systems Agency must actively monitor these indicators to ensure the contractor is meeting performance expectations and that taxpayer funds are yielding the intended operational benefits.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2303 DULLES STATION BLVD STE 105, HERNDON, VA, 20171
Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $45,300,000
Exercised Options: $45,300,000
Current Obligation: $45,300,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC73B
IDV Type: GWAC
Timeline
Start Date: 2022-09-16
Current End Date: 2025-08-16
Potential End Date: 2025-08-16 00:00:00
Last Modified: 2025-11-03
More Contracts from Four LLC
- NEW Ipaa Software Substitution Fixed Q NEW Ipaa Software Substitution Fixed Quantity June 30, 2018 Thru June 29, 2019 — $237.4M (Department of the Treasury)
- International Business Machines Corporation (IBM) Enterprise License Agreement (ELA) — $211.5M (Department of Health and Human Services)
- IBM Software Licensing, Maintenance, Support and Subscription for IRS — $194.4M (Department of the Treasury)
- IBM SRO Recompete — $180.6M (Social Security Administration)
- Re-Compete Ongoing Software Maintenance Support, and a Vehicle for Acquiring Additional Version Upgrades for IBM Software — $166.1M (Social Security Administration)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)