DoD's $40.3M Enterprise Agreement with Thundercat Technology for IT services shows fair value but limited competition

Contract Overview

Contract Amount: $40,294,840 ($40.3M)

Contractor: Thundercat Technology, LLC

Awarding Agency: Department of Defense

Start Date: 2018-08-17

End Date: 2022-08-16

Contract Duration: 1,460 days

Daily Burn Rate: $27.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PALO ALTO ENTERPRISE AGREEMENT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.3 million to THUNDERCAT TECHNOLOGY, LLC for work described as: PALO ALTO ENTERPRISE AGREEMENT Key points: 1. The contract's value appears reasonable when benchmarked against similar IT enterprise agreements. 2. Limited competition may have impacted price discovery, potentially leading to higher costs for taxpayers. 3. The fixed-price contract structure mitigates some cost overrun risks. 4. Performance duration of four years provides stability for IT service delivery. 5. This agreement falls within the broader category of IT support services for defense agencies. 6. The use of a delivery order under an existing agreement suggests a streamlined procurement process.

Value Assessment

Rating: good

The total award amount of $40.3 million over four years for IT enterprise services appears to be within a reasonable range when compared to similar large-scale IT support contracts within the federal government. The firm fixed-price nature of the contract helps control costs, as the contractor assumes the risk for cost overruns. Benchmarking against industry standards for enterprise IT agreements of this scope suggests that the pricing is competitive, although the limited competition aspect warrants further consideration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. The data specifies '4' as the number of offers received. This level of competition, while not a sole-source award, is less robust than full and open competition with a larger number of bidders. The limited number of bidders could potentially reduce the downward pressure on pricing.

Taxpayer Impact: With only four offers received, taxpayers may not have benefited from the most competitive pricing achievable through a broader bidding process. This could translate to a higher overall cost for the government compared to a scenario with more robust competition.

Public Impact

The Department of Defense, specifically the Defense Information Systems Agency (DISA), is the primary beneficiary, receiving essential IT enterprise services. The services delivered likely include software licensing, maintenance, and support for critical IT infrastructure. The geographic impact is national, supporting DoD operations across various locations. The contract supports a workforce involved in IT management, maintenance, and potentially cybersecurity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than could have been achieved with more bidders.
The 'exclusion of sources' aspect of the competition requires scrutiny to ensure fairness and prevent anti-competitive practices.
The specific IT services covered are not detailed, making it difficult to assess the full scope and value.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
The four-year duration offers stability and continuity for essential IT services.
Awarding under an existing agreement structure (delivery order) suggests efficient procurement.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT services and support. The market for enterprise IT agreements is substantial within the federal government, with agencies like the DoD being major consumers. Comparable spending benchmarks for large IT enterprise agreements often run into tens or hundreds of millions of dollars, depending on the scope and duration. This contract's value of approximately $40 million is significant but not extraordinary within this context.

Small Business Impact

The data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications or specific benefits to the small business ecosystem stemming from this particular award. The focus appears to be on securing enterprise-level IT solutions from larger providers.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified services. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD IT Enterprise Software Agreements
Defense Information Systems Agency Contracts
General Services Administration IT Schedule Contracts
Enterprise Resource Planning (ERP) Systems Support
Cloud Computing Services Contracts

Risk Flags

Limited competition may lead to suboptimal pricing.
Potential for unconsidered innovative solutions due to source exclusion.
Need to verify justification for excluding sources.
Scope definition clarity for enterprise services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.3 million to THUNDERCAT TECHNOLOGY, LLC. PALO ALTO ENTERPRISE AGREEMENT

Who is the contractor on this award?

The obligated recipient is THUNDERCAT TECHNOLOGY, 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 $40.3 million.

What is the period of performance?

Start: 2018-08-17. End: 2022-08-16.

What is the track record of Thundercat Technology, LLC with federal contracts, particularly with the Department of Defense?

Thundercat Technology, LLC has a history of receiving federal contracts, primarily within the IT and defense sectors. A review of federal procurement data indicates multiple awards to Thundercat Technology across various agencies, including significant contracts with the Department of Defense. Their performance history on these contracts would need to be individually assessed, but their continued receipt of awards suggests a generally satisfactory performance record. Specific details regarding past performance on similar enterprise agreements would provide a clearer picture of their capabilities and reliability in fulfilling large-scale IT requirements for the DoD.

How does the $40.3 million award compare to other similar IT enterprise agreements awarded by DISA or the DoD?

The $40.3 million award for a four-year IT enterprise agreement is a substantial but not unprecedented figure for the Department of Defense. DISA and other DoD components frequently award contracts in the tens to hundreds of millions of dollars for enterprise-level IT services, including software, hardware, maintenance, and support. When benchmarked against similar agreements for comprehensive IT solutions, this contract appears to be within a reasonable value range. However, a precise comparison would require detailed analysis of the specific services, scope, and duration of other comparable contracts, as well as prevailing market rates at the time of award.

What are the primary risks associated with this 'Full and Open Competition After Exclusion of Sources' award?

The primary risk associated with 'Full and Open Competition After Exclusion of Sources' is the potential for reduced price competition. By excluding certain sources, the pool of potential bidders is narrowed, which can lead to less aggressive pricing from the remaining offerors. This could result in the government paying a higher price than if a truly open competition had been conducted. Additionally, there's a risk that innovative solutions or better value propositions from excluded sources might not be considered. Ensuring that the exclusion of sources was justified and based on legitimate technical or programmatic reasons is crucial to mitigating these risks.

How effective is the firm fixed-price contract type in managing costs for this IT enterprise agreement?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for IT enterprise agreements, especially when the scope of work is well-defined. Under an FFP contract, the contractor assumes the risk of cost overruns, meaning they are obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides the government with significant cost certainty and predictability. For services like software licensing, maintenance, and standard support, where requirements are relatively stable, FFP is highly suitable. However, if the scope of work is expected to change significantly or involves substantial research and development, an FFP contract might be less appropriate and could lead to change order costs or contractor reluctance to perform.

What is the historical spending trend for similar IT enterprise agreements within the DoD over the past five years?

Historical spending trends for similar IT enterprise agreements within the DoD over the past five years show a consistent and significant investment in technology infrastructure and services. Agencies like DISA have consistently allocated substantial budgets towards enterprise software, hardware, network infrastructure, and IT support. Spending in this area has generally increased, driven by modernization efforts, cybersecurity needs, and the adoption of cloud technologies. While specific figures fluctuate based on agency priorities and budget cycles, the overall trend indicates a sustained demand and significant expenditure on large-scale IT agreements to maintain operational readiness and technological superiority.

What are the implications of this contract being awarded as a Delivery Order (DO) under an existing agreement?

Awarding this contract as a Delivery Order (DO) under an existing agreement implies that the underlying contract vehicle was previously established through a competitive process. This method is often used for task-specific procurements that fall within the scope of a broader, pre-negotiated contract. The implications include a potentially faster procurement timeline compared to a new full-and-open competition, as much of the foundational work (e.g., contractor vetting, basic terms) has already been completed. It also suggests that the services procured here are part of a larger, ongoing IT strategy. The specific terms and conditions of the parent contract would govern this DO, and its competition level would depend on how the parent contract was originally competed and if this specific DO was competed among awardees of the parent contract.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thundercat Technology LLC

Address: 1925 ISAAC NEWTON SQ STE 180, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $40,294,840

Exercised Options: $40,294,840

Current Obligation: $40,294,840

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD26B

IDV Type: GWAC

Timeline