DoD's $12.7M Counterintelligence Services Contract Awarded to D7, LLC Faces Scrutiny for Limited Competition

Contract Overview

Contract Amount: $12,773,429 ($12.8M)

Contractor: D7, LLC

Awarding Agency: Department of Defense

Start Date: 2022-03-01

End Date: 2026-02-28

Contract Duration: 1,460 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: COUNTERINTELLIGENCE PROFESSIONAL SERVICES (NATIONAL CAPITAL REGION AND EGLIN AFB).

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to D7, LLC for work described as: COUNTERINTELLIGENCE PROFESSIONAL SERVICES (NATIONAL CAPITAL REGION AND EGLIN AFB). Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. Limited competition may lead to higher costs for taxpayers compared to a more open bidding process. 3. The contract's duration of 1460 days (4 years) suggests a long-term need for these specialized services. 4. Performance context is crucial given the sensitive nature of counterintelligence, requiring robust oversight. 5. Sector positioning within 'Other Scientific and Technical Consulting Services' indicates a broad range of potential activities. 6. The 'NOT AVAILABLE FOR COMPETITION' status is a significant risk indicator for cost-effectiveness.

Value Assessment

Rating: questionable

Benchmarking the value for this contract is challenging due to its sole-source nature and the specific, sensitive requirements of counterintelligence support. Without competitive bids, it's difficult to assess if D7, LLC's pricing reflects fair market value. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not managed tightly. Further analysis of the fixed fee component and the contractor's historical performance on similar contracts would be needed to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' justification, indicating that only one source, D7, LLC, was deemed capable of fulfilling the requirement. This severely limits the opportunity for price discovery and potentially reduces the incentive for the contractor to offer the most competitive pricing. The lack of multiple bidders means that the government did not benefit from the usual pressures of a competitive market to drive down costs.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these services. Without a bidding process, there's less assurance that the government secured the best possible price for the counterintelligence support needed.

Public Impact

The primary beneficiaries are the Department of Defense agencies requiring specialized counterintelligence support. Services delivered likely include intelligence analysis, threat assessment, and protective measures for sensitive information and personnel. The geographic impact covers the National Capital Region and Eglin Air Force Base, key areas for defense operations. Workforce implications involve the employment of skilled counterintelligence professionals, potentially including former government personnel or specialized contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs.
Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
The sensitive nature of counterintelligence work necessitates robust security and performance monitoring.
Lack of transparency in the sole-source justification could mask underlying issues.
Defining 'best value' is difficult without a competitive process.

Positive Signals

Contract addresses a critical national security need for counterintelligence support.
D7, LLC is likely selected for specialized expertise required for the mission.
The contract duration suggests a stable, long-term requirement, allowing for focused service delivery.
The fixed fee component provides some cost certainty compared to purely cost-reimbursement contracts.

Sector Analysis

This contract falls within the 'Other Scientific and Technical Consulting Services' sector, a broad category encompassing specialized advisory and analytical support. The market for such services is competitive, but specific niches like counterintelligence often see fewer qualified providers. The Department of Defense is a major consumer of these services, with significant spending allocated to intelligence, security, and threat reduction. Benchmarks for similar sole-source contracts in this niche are difficult to establish publicly due to security and proprietary considerations.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. Given the specialized and sensitive nature of counterintelligence services, it is likely that the prime contractor, D7, LLC, possesses unique capabilities that may not be readily available from smaller firms. Further investigation would be needed to determine if any subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Threat Reduction Agency (DTRA) and potentially other DoD components involved in counterintelligence. Accountability measures would be tied to the performance standards outlined in the Cost Plus Fixed Fee contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Intelligence Community Support Services
Defense Security Services
Threat Analysis and Mitigation
National Security Consulting
Federal Counterintelligence Programs

Risk Flags

Sole-source award
Limited competition
Cost Plus Fixed Fee contract type
Lack of transparency in justification
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to D7, LLC. COUNTERINTELLIGENCE PROFESSIONAL SERVICES (NATIONAL CAPITAL REGION AND EGLIN AFB).

Who is the contractor on this award?

The obligated recipient is D7, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2022-03-01. End: 2026-02-28.

What is the specific expertise D7, LLC brings to counterintelligence that justified a sole-source award?

The justification for a sole-source award typically rests on unique capabilities, specialized knowledge, or proprietary technology that only one contractor possesses. For counterintelligence, this could include deep understanding of specific threat actors, advanced analytical tools, established networks within sensitive communities, or personnel with unique security clearances and experience. Without the specific justification document, it's impossible to detail D7, LLC's exact qualifications. However, agencies often cite the need for continuity of operations, specialized skills not readily available elsewhere, or the high cost and time associated with re-competing a highly specialized requirement as reasons for sole-sourcing.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) structure is common for complex services where the scope of work may evolve or is difficult to define precisely upfront, such as research and development or specialized consulting. It allows the contractor to be reimbursed for all allowable costs plus a predetermined fixed fee representing profit. This differs from Firm-Fixed-Price (FFP) contracts, where the price is set regardless of costs, offering greater cost certainty to the government but potentially higher risk for the contractor. Cost-Reimbursement contracts (Cost Plus Incentive Fee, Cost Plus Award Fee) also exist, offering different risk/reward profiles. For counterintelligence, CPFF can be advantageous if the nature of threats and required responses are unpredictable, but it necessitates stringent government oversight to control costs and ensure the fixed fee remains reasonable.

What are the potential risks associated with awarding a 4-year contract on a sole-source basis for counterintelligence services?

Awarding a long-term, sole-source contract for sensitive services like counterintelligence carries several risks. Firstly, the lack of competition means the government may not be achieving the best possible price, potentially overpaying for services over the four-year period. Secondly, without the pressure of future competition, the contractor might have less incentive to innovate or maintain peak performance throughout the contract's life. Thirdly, a sole-source award can create vendor lock-in, making it difficult to transition to a new provider or adopt new technologies if the contractor's capabilities become outdated or their performance declines. Finally, it raises concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or missed opportunities for other qualified firms.

What historical spending patterns exist for counterintelligence professional services within the Department of Defense?

Historical spending on counterintelligence professional services within the Department of Defense is substantial and has likely increased in recent years due to evolving geopolitical threats. While specific figures for 'counterintelligence professional services' as a distinct category can be difficult to isolate from broader intelligence, security, and technical consulting budgets, agencies like the Defense Intelligence Agency (DIA), National Security Agency (NSA), and various branches of the military consistently allocate significant resources to these functions. Spending often fluctuates based on perceived threat levels, technological advancements in intelligence gathering and analysis, and specific operational requirements. Contracts in this domain are frequently sole-sourced or awarded under limited competition due to the highly specialized nature of the work and the need for trusted, cleared personnel.

How does the 'Other Scientific and Technical Consulting Services' NAICS code (541690) typically relate to counterintelligence functions?

The North American Industry Classification System (NAICS) code 541690, 'Other Scientific and Technical Consulting Services,' is a broad category that can encompass a wide range of specialized advisory and analytical activities. Counterintelligence functions often fall under this umbrella because they require scientific and technical expertise applied to intelligence gathering, analysis, threat assessment, and protective measures. This can include areas like cybersecurity consulting, forensic analysis, risk management, and strategic intelligence planning. While more specific NAICS codes might exist for pure intelligence analysis or security services, 541690 is often used when the services blend technical problem-solving with consulting for complex, often sensitive, governmental or defense-related issues, such as those encountered in counterintelligence operations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HDTRA121R0013

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1755 TELSTAR DR STE 500, COLORADO SPRINGS, CO, 80920

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Native Hawaiian Organization Owned Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,352,843

Exercised Options: $15,010,221

Current Obligation: $12,773,429

Actual Outlays: $5,175,436

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline