DoD's $53.5M IT support contract to TEKSYNAP CORPORATION raises value and competition questions

Contract Overview

Contract Amount: $53,521,713 ($53.5M)

Contractor: Teksynap Corporation

Awarding Agency: Department of Defense

Start Date: 2023-08-01

End Date: 2025-07-31

Contract Duration: 730 days

Daily Burn Rate: $73.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IT SERVICE PROVISIONING AND OPERATIONS SUPPORT

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $53.5 million to TEKSYNAP CORPORATION for work described as: IT SERVICE PROVISIONING AND OPERATIONS SUPPORT Key points: 1. Contract value appears high relative to duration and scope. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. Contract type (Time and Materials) can incentivize increased effort and cost. 4. Performance period is substantial, requiring ongoing oversight. 5. Sector is IT services, a common area for federal spending. 6. Small business participation is not explicitly mandated. 7. Geographic concentration in Virginia may indicate specific operational needs.

Value Assessment

Rating: questionable

The contract's total value of $53.5 million over two years for IT service provisioning and operations support seems high, especially considering the Time and Materials pricing structure which can lead to cost overruns. Benchmarking against similar IT support contracts is difficult without more granular detail on services, but the per-diem rates or hourly labor costs would be crucial for a thorough value assessment. The absence of a clear ceiling or fixed price components warrants scrutiny to ensure cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this type of competition can sometimes lead to fewer bids than a truly open process. Understanding the number of proposals received and the rationale behind source exclusion is key to assessing the quality of competition.

Taxpayer Impact: Limited competition can result in higher prices for taxpayers as the government may have less leverage to negotiate favorable terms when fewer qualified vendors are considered.

Public Impact

The Department of Defense benefits from IT service provisioning and operations support. Services delivered include computer facilities management. The contract has a geographic impact primarily in Virginia. Workforce implications include the potential for TEKSYNAP CORPORATION to employ IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to uncontrolled costs.
Limited competition may result in suboptimal pricing.
Lack of specific performance metrics makes outcome assessment difficult.
Exclusion of sources needs clear justification to ensure fairness.
Potential for scope creep without strict oversight.

Positive Signals

Contract awarded to a single entity, potentially streamlining management.
Clear performance period (two years) provides a defined timeframe.
Specific IT service category (Computer Facilities Management) indicates focused need.
Awarded by a major agency (Department of Defense) suggesting adherence to rigorous processes.

Sector Analysis

This contract falls within the IT Services sector, specifically Computer Facilities Management Services. The federal IT services market is vast and highly competitive, with agencies increasingly relying on contractors for specialized support. Comparable spending benchmarks would typically involve analyzing IT support contracts across different agencies and service types, looking at average contract values, duration, and pricing models. The size of this contract suggests a significant operational requirement for the Defense Threat Reduction Agency.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or mandated small business participation goals tied to this specific award. The impact on the small business ecosystem is neutral in terms of direct set-aside requirements, though TEKSYNAP CORPORATION may engage small businesses as subcontractors at its discretion.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Threat Reduction Agency. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is facilitated by contract databases, but detailed operational oversight and Inspector General jurisdiction would depend on the specific terms and any subsequent audits or investigations.

Related Government Programs

IT Operations and Support Services
Computer Facilities Management
Defense IT Infrastructure
Information Technology Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition may lead to suboptimal pricing.
Lack of detailed performance metrics.
Ambiguity in 'Exclusion of Sources' rationale.
High contract value relative to duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.5 million to TEKSYNAP CORPORATION. IT SERVICE PROVISIONING AND OPERATIONS SUPPORT

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 $53.5 million.

What is the period of performance?

Start: 2023-08-01. End: 2025-07-31.

What is the track record of TEKSYNAP CORPORATION in performing similar IT service provisioning and operations support contracts for the federal government?

TEKSYNAP CORPORATION has a history of performing IT services for the federal government. Analyzing their past performance on similar contracts, particularly those involving computer facilities management and operations support, is crucial. This includes reviewing past performance evaluations, any contract disputes or terminations, and their ability to meet cost, schedule, and performance requirements. A review of federal procurement data indicates TEKSYNAP has secured other IT-related contracts, but a detailed assessment would require examining the scope, value, and duration of these prior engagements to gauge their experience relevant to this specific $53.5 million award.

How does the pricing structure (Time and Materials) of this contract compare to industry standards for similar IT support services, and what are the associated risks?

Time and Materials (T&M) contracts, like this one, are often used when the scope of work is not clearly defined or is expected to change. While flexible, T&M contracts carry inherent risks for the government, primarily the potential for cost overruns, as the contractor is reimbursed for direct labor hours and material costs, plus a fee or fixed overhead. Industry standards for IT support often favor fixed-price or cost-plus-fixed-fee structures for well-defined services to better control costs. The risk with T&M is that it can incentivize longer task durations and higher labor hours, rather than efficiency. Robust oversight, detailed reporting of hours, and clear ceilings are essential to mitigate these risks and ensure value for money.

What specific IT services are included under 'Computer Facilities Management Services,' and how are performance metrics defined and measured?

Computer Facilities Management Services typically encompass a broad range of activities related to the operation, maintenance, and support of IT infrastructure. This can include server management, network administration, data center operations, hardware and software maintenance, help desk support, and cybersecurity monitoring. The effectiveness of this contract hinges on clearly defined performance standards and metrics within the Statement of Work (SOW). Without specific metrics (e.g., system uptime percentages, response times for help desk tickets, patch management compliance rates), it is difficult to objectively assess TEKSYNAP's performance and ensure the government is receiving the expected value. The absence of detailed performance metrics in the provided data is a significant gap.

What was the rationale behind the 'Exclusion of Sources' in the competition process, and how did it impact the number of bids received?

The 'Exclusion of Sources' designation indicates that while the procurement was intended to be open, certain potential offerors were deliberately excluded from participating. The rationale for such exclusions can vary, including reasons related to national security, proprietary technology, or specific capabilities required that only a limited number of entities possess. However, this process inherently restricts competition. To fully assess its impact, one would need to know the specific criteria for exclusion and the number of proposals received. If only a few bids were submitted due to these exclusions, it raises concerns about whether the government obtained the best possible pricing and technical solutions available in the market.

What is the historical spending pattern for IT service provisioning and operations support by the Defense Threat Reduction Agency (DTRA) or similar DoD entities?

Analyzing historical spending patterns for IT services by DTRA and comparable Department of Defense entities provides crucial context for evaluating the $53.5 million TEKSYNAP contract. Understanding whether this award represents an increase, decrease, or continuation of previous spending levels helps identify trends and potential anomalies. For instance, if DTRA has historically spent significantly less on similar services, this contract's value might warrant closer examination. Conversely, if spending has been consistently high, it might indicate a stable, ongoing need. Data on prior contracts, including their values, durations, and awarded contractors, would be necessary to establish a reliable benchmark and assess the current contract's proportionality.

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 › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA118R0002

Pricing Type: TIME AND MATERIALS (Y)

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: $101,952,482

Exercised Options: $63,151,383

Current Obligation: $53,521,713

Actual Outlays: $11,205,413

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $12,489,038

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