DoD's $23.1M contract for IT modernization services awarded to VALIDATEK-CITI, LLC

Contract Overview

Contract Amount: $23,158,145 ($23.2M)

Contractor: Validatek-Citi, LLC

Awarding Agency: Department of Defense

Start Date: 2019-05-17

End Date: 2025-03-08

Contract Duration: 2,122 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: MODERNIZATION SXXI (MSXXI)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to VALIDATEK-CITI, LLC for work described as: MODERNIZATION SXXI (MSXXI) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive Fee, which can incentivize cost savings but also carries inherent risk. 3. The duration of 2122 days indicates a long-term engagement for IT modernization. 4. The award is a Delivery Order under a larger contract vehicle. 5. The North American Industry Classification System (NAICS) code 541512 points to Computer Systems Design Services. 6. The contract is managed by the Defense Information Systems Agency (DISA).

Value Assessment

Rating: fair

Benchmarking the value of this $23.1 million contract is challenging without more detailed cost breakdowns and comparisons to similar IT modernization projects. The Cost Plus Incentive Fee (CPIF) structure means the final cost is variable and depends on performance against defined incentives. While CPIF can be effective in aligning contractor and government interests, it requires robust oversight to ensure costs remain reasonable and that incentives are structured to deliver genuine value. Without specific performance metrics or comparable contract data, assessing the overall value-for-money is difficult.

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,' indicating that while the initial solicitation was broad, certain sources may have been excluded prior to the final award. The presence of 3 bids suggests a moderate level of competition. A full and open competition generally aims to maximize the pool of potential bidders, which can lead to better pricing and innovation. However, the 'after exclusion of sources' clause warrants further investigation into the rationale for exclusion and its potential impact on the competitive landscape.

Taxpayer Impact: A competitive bidding process, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to offer their best pricing and technical solutions. This can lead to a more cost-effective outcome compared to sole-source or limited competition awards.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which will receive modernized IT systems. The services delivered are computer systems design, crucial for maintaining and upgrading critical defense infrastructure. The geographic impact is likely within the operational areas supported by DISA, primarily within the United States. The contract supports the IT workforce, potentially involving specialized roles in systems design, integration, and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Incentive Fee (CPIF) contract type introduces potential for cost overruns if not managed diligently.
The 'after exclusion of sources' clause in the competition type requires scrutiny to ensure fairness and optimal competition.
The long contract duration (2122 days) necessitates sustained oversight to ensure continued relevance and performance.
Lack of specific performance metrics makes it difficult to assess the 'incentive' aspect of the CPIF contract.
The absence of small business set-aside flags raises questions about opportunities for smaller businesses in this contract.

Positive Signals

Awarded through full and open competition, indicating an effort to leverage market capabilities.
The contract is a Delivery Order, suggesting it's part of a pre-established framework, potentially streamlining acquisition.
The contract aims to modernize IT systems, a critical need for defense agencies.
The contractor, VALIDATEK-CITI, LLC, is engaged in providing essential IT services to the DoD.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive and dynamic. This contract falls under Computer Systems Design Services (NAICS 541512), a segment focused on designing, developing, and integrating IT solutions. Government spending in this area is substantial, driven by the need for modernization, cybersecurity, and operational efficiency. Comparable spending benchmarks would typically involve analyzing other large-scale IT modernization contracts awarded by agencies like DISA or other branches of the DoD, looking at contract values, durations, and service scopes.

Small Business Impact

This contract does not appear to have a specific small business set-aside designation, as indicated by 'ss': false and 'sb': false. While the contract was awarded under full and open competition, the absence of set-aside provisions means that small businesses would have had to compete directly with larger firms. It is possible that small businesses could be involved as subcontractors, but this contract's structure does not prioritize their direct participation. Further analysis would be needed to determine if subcontracting plans were mandated or if small businesses are actively participating in the supply chain for this contract.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Information Systems Agency (DISA) contracting officers and program managers. As a Cost Plus Incentive Fee contract, rigorous monitoring of costs, performance against incentives, and adherence to the contract scope will be crucial. Transparency is typically facilitated through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the DoD Inspector General (IG) if issues arise. The effectiveness of oversight will depend on the diligence of the assigned government personnel in managing the CPIF structure and ensuring value.

Related Government Programs

Defense Information Systems Agency (DISA) IT Modernization Programs
Department of Defense Enterprise IT Services
Computer Systems Design and Related Services Contracts
Cost Plus Incentive Fee Contracts
IT Services for National Security

Risk Flags

Potential for cost overruns due to CPIF structure.
Limited transparency on specific performance incentives.
Unclear rationale for source exclusion in competition.
Need for sustained oversight due to long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to VALIDATEK-CITI, LLC. MODERNIZATION SXXI (MSXXI)

Who is the contractor on this award?

The obligated recipient is VALIDATEK-CITI, 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 $23.2 million.

What is the period of performance?

Start: 2019-05-17. End: 2025-03-08.

What is the specific scope of the 'MODERNIZATION SXXI (MSXXI)' project, and what are the key performance indicators (KPIs) tied to the incentive fee structure?

The provided data does not detail the specific scope of the 'MODERNIZATION SXXI (MSXXI)' project or the exact Key Performance Indicators (KPIs) linked to the Cost Plus Incentive Fee (CPIF) structure. Typically, for IT modernization projects under a CPIF contract, KPIs might include metrics related to system performance improvements (e.g., speed, uptime, reliability), successful integration of new technologies, cost savings achieved against a baseline, or adherence to project timelines. The incentive fee would be adjusted based on the contractor's performance against these pre-defined metrics. Without access to the contract's Statement of Work (SOW) and the detailed incentive clauses, a precise understanding of the project's goals and how performance is measured and rewarded remains elusive. This lack of detail makes it difficult to fully assess the value proposition and the effectiveness of the incentive mechanism.

How does the pricing structure of this Cost Plus Incentive Fee (CPIF) contract compare to similar IT modernization contracts awarded by DISA or the DoD?

Comparing the pricing structure of this specific CPIF contract without detailed cost breakdowns and profit/fee margins is challenging. CPIF contracts are inherently variable, with the final cost depending on the contractor's efficiency and performance against incentives. To benchmark effectively, one would need to analyze the target cost, incentive fee range, and the government's estimate for the work. Furthermore, comparing it to similar IT modernization efforts by DISA or the DoD would require access to data on their contract types, scopes, durations, and final awarded costs. Generally, CPIF aims to achieve a balance where the contractor is motivated to control costs while ensuring quality and performance. If the contractor significantly exceeds cost targets or fails to meet performance incentives, the government may pay more than anticipated, whereas exceeding performance targets could lead to savings for the government compared to other contract types. A thorough comparison would necessitate access to more granular contract data and market intelligence on IT modernization services.

What were the specific reasons for excluding certain sources in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award, and did this exclusion limit competition?

The data provided does not specify the exact reasons for excluding certain sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award. This contract type suggests that while the initial solicitation was intended to be broad, specific vendors or types of vendors were deemed ineligible or were not considered for the final award phase. Common reasons for exclusion can include failure to meet minimum technical qualifications, past performance issues, inability to meet security requirements, or specific government policy directives. The impact of this exclusion on competition is difficult to gauge without knowing how many sources were initially considered and how many remained after exclusions. If only a few bidders remained, the competitive pressure might have been reduced, potentially impacting price discovery. Ideally, such exclusions are well-documented and justified to ensure fairness and maximize the potential for competitive pricing and innovation.

What is the track record of VALIDATEK-CITI, LLC in performing similar large-scale IT modernization contracts for the federal government?

Information regarding the specific track record of VALIDATEK-CITI, LLC in performing large-scale IT modernization contracts for the federal government is not detailed in the provided data. To assess their capabilities, one would typically review their past performance evaluations, contract history, and any reported issues or successes on similar projects. Federal procurement systems often contain databases (like the Contractor Performance Assessment Reporting System - CPARS) that document contractor performance. Without access to these records, it's difficult to definitively state their experience level in managing complex IT modernization efforts. However, being awarded a contract of this magnitude by the Defense Information Systems Agency suggests they possess the necessary qualifications and have likely demonstrated competence in prior engagements, though the scale and nature of those engagements would need further investigation.

How does the $23.1 million contract value align with historical spending trends for IT modernization services within the Department of Defense?

The $23.1 million contract value for IT modernization services is a significant but not extraordinary amount within the context of the Department of Defense's overall IT spending. The DoD invests billions annually in IT infrastructure, modernization, cybersecurity, and digital transformation initiatives. This particular contract, awarded as a Delivery Order, likely represents a portion of a larger strategic effort. To assess alignment with historical trends, one would need to examine DISA's and the DoD's budget allocations and contract awards for IT modernization over the past several fiscal years. Factors such as the specific technologies being modernized, the scope of systems affected, and the overall strategic priorities of the DoD would influence the typical size and frequency of such contracts. This $23.1 million award appears consistent with the scale of IT projects undertaken by major defense agencies.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 1660 INTERNATIONAL DRIVE, STE 400, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,952,973

Exercised Options: $25,473,019

Current Obligation: $23,158,145

Actual Outlays: $8,082,390

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSN316201200187W

IDV Type: GWAC

Timeline