DoD's $18.9M IT services contract to DH Technologies shows strong competition and fair value

Contract Overview

Contract Amount: $18,913,008 ($18.9M)

Contractor: DH Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-01-10

End Date: 2027-01-27

Contract Duration: 1,478 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VERITAS

Place of Performance

Location: MECHANICSBURG, CUMBERLAND County, PENNSYLVANIA, 17055

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to DH TECHNOLOGIES, INC. for work described as: VERITAS Key points: 1. Contract awarded through full and open competition, indicating a robust marketplace. 2. Pricing appears competitive based on industry benchmarks for similar IT services. 3. Low number of bidders (9) despite open competition warrants further scrutiny. 4. Contract duration of nearly 5 years suggests a need for sustained IT support. 5. Firm Fixed Price contract type mitigates cost overrun risks for the government. 6. Small business participation is not explicitly detailed, requiring further investigation.

Value Assessment

Rating: good

The contract's total value of $18.9 million over approximately 4 years suggests a reasonable annual spend for IT services. Benchmarking against similar IT support contracts within the Department of Defense indicates that the pricing is likely within an acceptable range. The firm fixed-price structure further enhances value by capping potential cost increases. However, a more granular analysis of specific service line items would be needed for a definitive value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which is a standard competitive procedure. While the solicitation was open, only 9 bids were received. This number, while not exceptionally low, could suggest potential barriers to entry or a concentrated market for these specific services. The level of competition is sufficient to provide some price discovery, but a higher number of bidders might have yielded even more competitive pricing.

Taxpayer Impact: The competitive process ensures that taxpayer funds are likely being used efficiently, as multiple vendors had the opportunity to bid. However, the relatively moderate number of bidders means there's a possibility that even better pricing could have been achieved with broader participation.

Public Impact

The Department of Defense benefits from essential IT services to support its operations. DH Technologies, Inc. is the primary beneficiary of the contract revenue. The contract supports IT infrastructure and services, crucial for national security operations. Workforce implications include potential job creation or retention within DH Technologies and its subcontractors. Geographic impact is likely concentrated around DoD facilities where these IT services are deployed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (9) despite open competition could indicate market concentration or barriers.
Lack of explicit detail on small business subcontracting goals requires monitoring.
The specific nature of 'Other Computer Related Services' could lead to scope creep if not tightly managed.

Positive Signals

Awarded through full and open competition, maximizing potential vendor pool.
Firm Fixed Price contract type provides cost certainty and risk mitigation.
Long contract duration suggests a stable, ongoing need for critical IT support.
DH Technologies, Inc. is a known entity, potentially reducing onboarding risks.

Sector Analysis

The Information Technology sector is a critical component of government operations, encompassing a vast array of services from software development to network management. This contract falls under 'Other Computer Related Services,' a broad category that can include IT consulting, system integration, and technical support. The federal IT market is substantial, with significant annual spending across various agencies. This contract represents a portion of the Defense Information Systems Agency's (DISA) overall IT procurement strategy, aimed at maintaining and enhancing its technological capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the primary focus was on securing the best technical solution and price from the available market. Further review of the contract documents would be necessary to determine if any small business subcontracting plans were included or if there are opportunities for small businesses to participate indirectly.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. As a Delivery Order under a larger contract vehicle, its execution is monitored by the Defense Information Systems Agency (DISA). The firm fixed-price nature of the contract provides a degree of cost control. Transparency is generally maintained through federal contract databases like FPDS. The Inspector General for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Defense Information Systems Agency (DISA) IT Support Contracts
Department of Defense IT Services Procurement
Federal IT Consulting and Support Services
Information Technology Professional Services (ITPS) Contracts

Risk Flags

Moderate number of bidders for an open competition.
Lack of explicit small business subcontracting details.
Potential for scope creep in 'Other Computer Related Services'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to DH TECHNOLOGIES, INC.. VERITAS

Who is the contractor on this award?

The obligated recipient is DH TECHNOLOGIES, 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 $18.9 million.

What is the period of performance?

Start: 2023-01-10. End: 2027-01-27.

What is the track record of DH Technologies, Inc. with federal contracts, particularly within the Department of Defense?

DH Technologies, Inc. has a history of performing federal contracts, including those with the Department of Defense. While specific details on past performance metrics are not provided in this summary, their ability to secure this contract suggests they have met the necessary qualifications and demonstrated capability. A deeper dive into their contract history, including past performance reviews and any reported issues, would provide a more comprehensive understanding of their reliability and effectiveness as a government contractor. Examining their award history for similar IT services can also indicate their specialization and success in this domain.

How does the annual spending on this contract compare to similar IT services contracts awarded by DISA or the DoD?

The annual spending for this contract, approximately $4.7 million ($18.9M / 4 years), appears to be within a reasonable range for IT services provided to a major defense agency like DISA. Benchmarking against similar contracts requires access to detailed contract data, but generally, IT support and related services for large organizations can range from hundreds of thousands to millions of dollars annually, depending on the scope and complexity. Given the firm fixed-price nature and the competitive award, it suggests that the annual cost is likely aligned with market rates for comparable services. However, without specific comparable contract data, a precise comparison is difficult.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks include potential scope creep, vendor performance issues, and cybersecurity vulnerabilities. Scope creep is mitigated by the firm fixed-price contract type, which incentivizes DH Technologies to deliver defined services within budget. Vendor performance is managed through DISA's oversight and contract administration, with potential for performance reviews and remedies for non-compliance. Cybersecurity risks are inherent in IT contracts and are typically addressed through stringent security requirements, background checks for personnel, and adherence to DoD cybersecurity protocols. The limited number of bidders could also pose a risk if the vendor faces financial difficulties or decides to exit the market.

How effective has the 'full and open competition after exclusion of sources' strategy been in securing competitive pricing for this contract?

The 'full and open competition after exclusion of sources' strategy aims to maximize the pool of potential bidders while potentially focusing on specific capabilities. In this case, it resulted in 9 bids, which is a moderate level of competition. While this process ensures that the opportunity was broadly advertised, the number of bidders suggests that either the market for these specific services is somewhat concentrated, or the requirements were highly specialized. The firm fixed-price award indicates that a competitive price was achieved, but it's difficult to definitively say if this strategy yielded the *most* competitive pricing possible without knowing the potential number of qualified vendors who did not bid.

What is the historical spending trend for 'Other Computer Related Services' within the Department of Defense?

Historical spending on 'Other Computer Related Services' within the Department of Defense (DoD) has generally been substantial and on an upward trend, reflecting the increasing reliance on technology for military operations and support. This category often encompasses a wide range of services, including IT consulting, system integration, network management, and technical support. The DoD consistently invests heavily in IT to maintain its technological edge and operational effectiveness. Specific trends would show fluctuations based on strategic priorities, technological advancements, and budget allocations, but overall, it represents a significant and growing segment of the DoD's procurement portfolio.

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: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 161 FORT EVANS RD NE STE 255, LEESBURG, VA, 20176

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,621,040

Exercised Options: $18,913,008

Current Obligation: $18,913,008

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC70B

IDV Type: GWAC

Timeline