CBP's $261.6M contract with Unisys for IT services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $261,580,989 ($261.6M)

Contractor: Unisys Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2005-04-01

End Date: 2010-09-30

Contract Duration: 2,008 days

Daily Burn Rate: $130.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DELIVERY ORDER

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $261.6 million to UNISYS CORPORATION for work described as: DELIVERY ORDER Key points: 1. The contract's value appears reasonable when benchmarked against similar IT service contracts. 2. Full and open competition was utilized, but the number of bidders was not specified, impacting price discovery. 3. The contract's duration and fixed-price nature suggest moderate performance risk. 4. This contract represents a significant portion of IT spending within U.S. Customs and Border Protection. 5. The services provided are critical for border security and immigration operations. 6. The contractor, Unisys, has a substantial history of performing large-scale government IT contracts.

Value Assessment

Rating: fair

The total award amount of $261.6 million over five years suggests a per-year average of approximately $52.3 million. Benchmarking against similar large-scale IT service contracts for federal agencies indicates this pricing is within a reasonable range, not excessively high or low. However, without specific details on the scope of services and labor categories, a precise value-for-money assessment is challenging. The fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for ensuring a competitive bidding process. However, the specific number of bids received is not detailed in the provided data. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions. The absence of this detail makes it difficult to fully assess the effectiveness of the competition in driving down costs and ensuring the best value for the government.

Taxpayer Impact: While full and open competition is the preferred method, the actual number of bidders is crucial for taxpayers. A robust competition ensures that taxpayer dollars are used efficiently by forcing contractors to offer their best prices and services.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), receiving essential IT support. Services delivered include the maintenance and operation of critical IT systems that support border security, trade facilitation, and immigration enforcement. The geographic impact is nationwide, as CBP operates across all U.S. borders and ports of entry. The contract supports a significant workforce, both directly employed by Unisys and indirectly through its subcontractors, contributing to the IT sector's employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not tightly managed over the contract's duration.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance falters.
The long-term nature of the contract might limit opportunities for adopting newer technologies if not managed proactively.

Positive Signals

The use of full and open competition suggests an effort to leverage market capabilities.
A fixed-price contract structure incentivizes the contractor to manage costs effectively.
The contractor, Unisys, has extensive experience in large-scale government IT projects, indicating a lower risk of execution failure.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on IT support and operations for a federal law enforcement agency. The IT services market for government contracts is substantial, with agencies like DHS being major spenders. Comparable spending benchmarks for large, multi-year IT support contracts can range from tens to hundreds of millions of dollars, depending on the complexity and scope of services. This contract appears to be a significant investment within the federal IT landscape.

Small Business Impact

The provided data does not indicate whether this contract included small business set-asides or specific subcontracting goals for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem. Large IT contracts can sometimes offer subcontracting opportunities for specialized small businesses, but this depends on the prime contractor's strategy and the contract's terms. Further investigation into subcontracting plans would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by contracting officers and program managers within U.S. Customs and Border Protection. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is generally maintained through contract award databases and reporting requirements, although specific performance metrics might not always be publicly disclosed. The Department of Homeland Security's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

DHS IT Modernization Programs
Federal Civilian IT Services
Customs and Border Protection Technology Modernization
Large-Scale IT Operations and Maintenance Contracts

Risk Flags

Potential for vendor lock-in due to long-term contract
Risk of outdated technology if contract lacks modernization clauses
Unspecified number of bidders limits assessment of competition effectiveness

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $261.6 million to UNISYS CORPORATION. DELIVERY ORDER

Who is the contractor on this award?

The obligated recipient is UNISYS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $261.6 million.

What is the period of performance?

Start: 2005-04-01. End: 2010-09-30.

What was the specific scope of IT services provided under this contract?

The provided data does not detail the specific scope of IT services. However, given the agency (U.S. Customs and Border Protection) and the contract's duration and value, it likely encompassed a broad range of services. These could include IT infrastructure management, network operations, system maintenance, software development and support, help desk services, and potentially cybersecurity support for critical border security and trade facilitation systems. The fixed-price nature suggests a well-defined scope was established at the outset to manage costs effectively over the contract's life.

How many bids were received for this contract, and what does this imply for price discovery?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION,' which is a positive step towards ensuring a competitive process. However, the specific number of bids received is not provided. A higher number of bids generally leads to better price discovery, as it intensifies competition and encourages bidders to offer more competitive pricing and terms. If only a few bids were received, even under full and open competition, the price discovery might have been less robust, potentially leading to higher costs for the government than if more bidders had participated.

What is Unisys Corporation's track record with large federal IT contracts, particularly with DHS?

Unisys Corporation has a long and extensive track record of performing large-scale IT services contracts for various U.S. federal agencies, including the Department of Homeland Security (DHS) and its components like U.S. Customs and Border Protection (CBP). They have been involved in significant projects related to IT infrastructure, application modernization, and managed services. While specific performance details for every contract are not always public, Unisys is generally recognized as an experienced large prime contractor capable of handling complex government IT requirements. Their history suggests a capacity to manage substantial budgets and technical challenges, though like any large contractor, specific contract performance can vary.

How does the $261.6 million award compare to similar IT service contracts awarded by DHS or other agencies?

The $261.6 million total award for this five-year contract (approximately $52.3 million per year) places it in the category of a large-scale IT services agreement. When compared to similar contracts for IT operations, maintenance, and support awarded by agencies like DHS, the Department of Defense, or civilian agencies, this amount appears to be within a common range for comprehensive IT support. Many large federal IT contracts for system integration, managed services, or infrastructure support often fall within the tens to hundreds of millions of dollars over their performance periods. Without knowing the exact service level agreements and specific deliverables, a precise comparison is difficult, but the overall value is consistent with major federal IT procurements.

What are the potential risks associated with a five-year fixed-price contract for IT services?

A significant risk with a long-term, fixed-price IT contract is the potential for scope creep. If the government's needs evolve or requirements are not clearly defined and managed, the contractor may be asked to perform additional work without commensurate price adjustments, or conversely, the government may pay a fixed price for services that become less relevant or efficient over time. Another risk is technological obsolescence; if the contract doesn't include mechanisms for incorporating newer technologies, the government might be locked into outdated systems. For the contractor, the risk lies in underestimating the effort required or facing unforeseen technical challenges, which could lead to reduced profitability or even losses if the fixed price is insufficient.

What historical spending patterns exist for IT services within U.S. Customs and Border Protection?

U.S. Customs and Border Protection (CBP), as a major component of DHS, has historically been a significant spender on IT services. Their technology needs are vast, supporting critical functions like border surveillance, cargo processing, data management, and law enforcement operations. Historical spending patterns would likely show a consistent and substantial investment in maintaining and upgrading complex IT systems. This includes funding for infrastructure, software development, data analytics, and cybersecurity. Large, multi-year contracts like the one with Unisys are typical for ensuring the continuity and modernization of these essential IT capabilities, reflecting a sustained commitment to leveraging technology for border security and trade facilitation.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: UNISYS WAY, BLUE BELL, PA, 19424

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $271,072,116

Exercised Options: $261,580,989

Current Obligation: $261,580,989

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TIRNO99Z00008

IDV Type: BOA

Timeline