DoD's $46M hardware/software maintenance contract awarded to NCR Government Systems LLC shows fair value

Contract Overview

Contract Amount: $46,035,553 ($46.0M)

Contractor: NCR Government Systems LLC

Awarding Agency: Department of Defense

Start Date: 2025-01-29

End Date: 2026-01-28

Contract Duration: 364 days

Daily Burn Rate: $126.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HARDWARE SOFTWARE MAINTENANCE

Place of Performance

Location: GERMANTOWN, MONTGOMERY County, MARYLAND, 20876

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $46.0 million to NCR GOVERNMENT SYSTEMS LLC for work described as: HARDWARE SOFTWARE MAINTENANCE Key points: 1. Contract provides essential IT hardware and software maintenance services for the Department of Defense. 2. The contract was awarded using full and open competition, suggesting a competitive bidding process. 3. Pricing appears reasonable when benchmarked against similar IT maintenance contracts. 4. The fixed-firm price structure helps mitigate cost overrun risks for the government. 5. This contract supports critical IT infrastructure, ensuring operational continuity for defense agencies. 6. The duration of one year with a potential for renewal offers flexibility. 7. No small business set-aside was utilized, indicating a focus on large prime contractors.

Value Assessment

Rating: good

The contract's value of approximately $46 million for a one-year term appears reasonable given the scope of IT hardware and software maintenance for a major federal agency like the Department of Defense. Benchmarking against similar large-scale IT support contracts suggests that the pricing is competitive. The firm fixed-price nature of the award provides cost certainty and predictability, which is a positive indicator of value for money. While specific performance metrics are not detailed here, the established nature of IT maintenance services implies a baseline level of expected service quality.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the use of this procurement method generally indicates a robust competition. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. This approach is favored for ensuring the government receives the best possible value.

Taxpayer Impact: Taxpayers benefit from the competitive pricing that full and open competition typically yields, ensuring that funds are used efficiently. It also promotes a level playing field for various IT service providers.

Public Impact

The Department of Defense benefits from uninterrupted access to critical IT hardware and software maintenance, ensuring operational readiness. This contract supports the Defense Information Systems Agency (DISA) in maintaining its IT infrastructure. The services delivered are essential for the functioning of various defense systems and personnel. The geographic impact is likely nationwide, supporting DoD operations across different locations. Workforce implications include the potential for employment within NCR Government Systems LLC and its subcontractors to fulfill the maintenance requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if maintenance is highly specialized.
Dependence on a single contractor for critical IT infrastructure support.
Risk of scope creep if maintenance requirements are not clearly defined and managed.

Positive Signals

Award to an established contractor with a track record in government IT services.
Firm fixed-price contract provides cost certainty.
Full and open competition suggests a competitive market for these services.
Contract supports essential defense IT infrastructure.

Sector Analysis

The IT services sector, particularly for government contracts, is highly competitive and diverse. This contract falls under the 'Other Computer Related Services' NAICS code (541519), which encompasses a broad range of IT support, including hardware and software maintenance. The federal government is a significant consumer of these services, with spending often concentrated in areas supporting defense, intelligence, and civilian agency operations. Comparable spending benchmarks for large-scale IT maintenance contracts can range from tens to hundreds of millions of dollars annually, depending on the scope and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. This suggests that the primary award was made to a large business, NCR Government Systems LLC. While there is no direct set-aside, the prime contractor may still engage small businesses for subcontracting opportunities to fulfill specific aspects of the maintenance work. The absence of a set-aside means that small businesses did not have a preferential pathway to bid directly on the prime contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the Defense Information Systems Agency (DISA) program office. Performance monitoring, adherence to contract terms, and quality assurance are key oversight mechanisms. Transparency is facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed, the DoD IG typically has oversight over all DoD contracts to investigate fraud, waste, and abuse.

Related Government Programs

DoD IT Modernization Programs
Defense Information Systems Network (DISN) Services
Enterprise IT Services Contracts
IT Hardware Maintenance Services
Software Maintenance and Support Contracts

Risk Flags

Potential for vendor lock-in
Reliance on a single contractor for critical IT support
Performance variability risk
Cybersecurity risks associated with third-party maintenance providers

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.0 million to NCR GOVERNMENT SYSTEMS LLC. HARDWARE SOFTWARE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is NCR GOVERNMENT SYSTEMS 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 $46.0 million.

What is the period of performance?

Start: 2025-01-29. End: 2026-01-28.

What is NCR Government Systems LLC's track record with the Department of Defense and similar federal contracts?

NCR Government Systems LLC has a history of performing IT services for the federal government. While specific details of their past performance on DoD contracts require deeper investigation into federal procurement databases like FPDS or SAM.gov, their ability to win a $46 million contract indicates a level of established capability and past success. Companies in this space often have portfolios that include hardware maintenance, software support, and integration services. A thorough review would involve examining past contract awards, performance evaluations (e.g., CPARS), and any reported issues or successes to fully assess their track record and suitability for this specific requirement.

How does the $46 million contract value compare to similar IT maintenance contracts awarded by the DoD or other federal agencies?

The $46 million contract value for a one-year term of IT hardware and software maintenance is substantial, reflecting the scale of operations within the Department of Defense. When benchmarked against similar large-scale IT support contracts, this figure appears to be within a reasonable range. For instance, other federal agencies often award multi-year contracts for enterprise-wide IT maintenance that can reach hundreds of millions of dollars. The specific nature of the hardware and software supported, the number of users or systems, and the criticality of the services all influence the total value. Without more granular data on the specific systems being maintained, a precise comparison is difficult, but the amount is consistent with significant federal IT support requirements.

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

Key risks include potential vendor lock-in, where the government becomes overly dependent on NCR Government Systems LLC for specialized maintenance, making future transitions difficult or costly. Another risk is the potential for performance issues or service disruptions if the contractor fails to meet maintenance SLAs. Scope creep, where the requirements expand beyond the initial agreement, could also lead to cost overruns, although the firm fixed-price structure aims to mitigate this. Mitigation strategies likely involve robust contract management, clear performance metrics, regular reviews, and contingency planning by the Defense Information Systems Agency (DISA). The firm fixed-price nature itself is a primary mitigation against cost escalation.

How effective is the 'full and open competition' approach in ensuring value for money for this specific IT maintenance contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal contracting. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages contractors to offer their best solutions and pricing. For this $46 million IT maintenance contract, this method likely resulted in competitive bids from multiple vendors, allowing the DoD to select the offer that provided the best overall value, considering both price and technical capabilities. The success of this approach hinges on the clarity of the solicitation requirements and the evaluation criteria used to select the winning bid.

What is the historical spending pattern for similar IT hardware and software maintenance services within the Department of Defense?

Historical spending patterns for IT hardware and software maintenance within the DoD are substantial and represent a significant portion of the department's IT budget. Agencies like DISA consistently award large contracts for these services, often through multi-year agreements. Spending can fluctuate based on technology refresh cycles, evolving security requirements, and shifts in strategic priorities. Analyzing past spending on similar contracts, including the number of awards, average contract values, and the incumbent contractors, can provide context for the current $46 million award. This contract appears to be part of a continuous effort to maintain the operational readiness of the DoD's vast IT infrastructure.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC108423R0014

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 20370 SENECA MEADOWS PKWY, GERMANTOWN, MD, 20876

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,035,553

Exercised Options: $46,035,553

Current Obligation: $46,035,553

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC108425D0001

IDV Type: IDC

Timeline