DoD's $76.6M TEKSYNAP Contract for IT Services Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $76,605,271 ($76.6M)

Contractor: Teksynap Corporation

Awarding Agency: Department of Defense

Start Date: 2018-08-20

End Date: 2023-07-31

Contract Duration: 1,806 days

Daily Burn Rate: $42.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IT SERVICE PROVISIONING AND OPERATIONS

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $76.6 million to TEKSYNAP CORPORATION for work described as: IT SERVICE PROVISIONING AND OPERATIONS Key points: 1. The contract awarded to TEKSYNAP CORPORATION for IT Service Provisioning and Operations represents a significant investment by the Defense Threat Reduction Agency. 2. Competition was initially limited, raising questions about price discovery and potential taxpayer impact. 3. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method warrants further examination to ensure fair market value. 4. The sector is IT, specifically Computer Facilities Management Services, a critical area for defense operations.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a limited competition approach, makes a direct pricing assessment challenging. Benchmarking against similar Computer Facilities Management Services contracts is difficult without more granular cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract utilized 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. This method can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The limited competition and Cost Plus Fixed Fee structure raise concerns about whether taxpayers received the best possible value for the $76.6 million spent.

Public Impact

Taxpayers may have overpaid due to a non-standard competitive process. The effectiveness of IT service provisioning for the Defense Threat Reduction Agency could be impacted by vendor performance and oversight. Future IT service contracts may need clearer competition requirements to ensure cost-efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises value concerns.
Cost Plus Fixed Fee can incentivize overspending.
Lack of clear per-unit cost benchmark.
Long contract duration (1806 days).

Positive Signals

Contract supports critical defense IT operations.
Awarded by a major agency (DoD).

Sector Analysis

This contract falls within the IT sector, specifically Computer Facilities Management Services. Spending in this area is substantial across government, with benchmarks varying widely based on service scope and complexity. The $76.6M value over approximately five years is significant.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false, sb: false). Therefore, there is no direct analysis of small business participation or impact from this specific award.

Oversight & Accountability

Oversight of this Cost Plus Fixed Fee contract is crucial to ensure TEKSYNAP CORPORATION is delivering services efficiently and that costs are reasonable. The 'exclusion of sources' clause requires careful justification and monitoring to prevent potential abuses.

Related Government Programs

Computer Facilities Management Services
Department of Defense Contracting
Defense Threat Reduction Agency Programs

Risk Flags

Potential for inflated costs due to limited competition.
Cost Plus Fixed Fee structure may lack cost control incentives.
Lack of transparency in source exclusion.
Difficulty in benchmarking value and performance.
Long contract duration without clear performance milestones.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.6 million to TEKSYNAP CORPORATION. IT SERVICE PROVISIONING AND OPERATIONS

Who is the contractor on this award?

The obligated recipient is TEKSYNAP CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $76.6 million.

What is the period of performance?

Start: 2018-08-20. End: 2023-07-31.

What specific justification was provided for excluding certain sources in the competitive process, and how was the fixed fee determined to ensure cost-effectiveness?

The justification for excluding sources is not detailed in the provided data. However, Cost Plus Fixed Fee contracts aim to control costs by setting a fixed fee for the contractor's effort, regardless of the actual costs incurred. The fee is negotiated based on estimated costs and the contractor's profit margin. Robust oversight is needed to ensure the 'cost' portion remains reasonable and the 'fixed fee' represents fair compensation for the defined scope.

How does the performance of TEKSYNAP CORPORATION on this contract compare to industry benchmarks for Computer Facilities Management Services, particularly given the limited competition?

Without performance metrics or data on comparable contracts awarded under full and open competition, it's difficult to definitively assess TEKSYNAP's performance against industry benchmarks. The limited competition aspect suggests that direct comparisons might be skewed. A thorough review of performance reports and any available post-award data would be necessary to evaluate value and effectiveness.

What is the potential long-term impact on the Defense Threat Reduction Agency's IT capabilities and budget due to the structure and execution of this contract?

The long-term impact could be significant if the limited competition led to suboptimal pricing or if the Cost Plus Fixed Fee structure incentivized inefficiencies. Conversely, if TEKSYNAP delivered high-quality services effectively, the agency's IT capabilities may be well-supported. Continuous monitoring and potential renegotiation or re-competition are vital to ensure future budget alignment and capability enhancement.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management 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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA118R0002

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1760 RESTON PKWY STE 515, RESTON, VA, 20190

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,605,271

Exercised Options: $76,605,271

Current Obligation: $76,605,271

Actual Outlays: $38,912,496

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $22,391,992

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDTRA118D0011

IDV Type: IDC

Timeline