DHS's $261M contract for automated targeting systems maintenance with Unisys Corporation shows fair value but limited competition

Contract Overview

Contract Amount: $260,953,082 ($261.0M)

Contractor: Unisys Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2006-12-15

End Date: 2011-09-28

Contract Duration: 1,748 days

Daily Burn Rate: $149.3K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: AUTOMATED TARGETING SYSTEMS MAINTENANCE

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $261.0 million to UNISYS CORPORATION for work described as: AUTOMATED TARGETING SYSTEMS MAINTENANCE Key points: 1. The contract's value appears reasonable given the duration and services provided, though specific performance metrics are not detailed. 2. Competition was limited, with only one bid received, potentially impacting price negotiation and taxpayer value. 3. The contract duration of nearly five years suggests a long-term need for these critical systems. 4. Performance context is difficult to assess without specific metrics on system uptime, accuracy, or efficiency gains. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The use of Time and Materials pricing could lead to cost overruns if not carefully managed.

Value Assessment

Rating: fair

The total award amount of $260,953,082.44 over approximately 1748 days (roughly 4.8 years) averages to about $54.4 million per year. This figure needs to be benchmarked against similar IT maintenance contracts for complex systems. Without specific details on the scope of 'maintenance' and the criticality of the 'automated targeting systems,' a precise value-for-money assessment is challenging. However, the duration suggests a significant investment, and the lack of multiple bids raises concerns about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a competitive delivery order, but only one bid was received. This indicates a lack of robust competition for this specific requirement. While it was competed, the limited number of bidders suggests potential barriers to entry for other firms or a lack of market interest. This situation can reduce the government's leverage in negotiating favorable terms and pricing, as there is no alternative provider to compare against.

Taxpayer Impact: A limited competition environment means taxpayers may not be benefiting from the most competitive pricing. The absence of multiple bids could result in higher costs than if a more robust bidding process had been in place.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) within the Department of Homeland Security, enabling the maintenance of critical automated targeting systems. These systems are crucial for national security, aiding in the identification of potential threats at U.S. borders. The services delivered ensure the operational readiness and effectiveness of border security technology. The geographic impact is national, focusing on border security operations, though the physical location of service delivery is in Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Time and Materials contract type carries inherent risk of cost escalation without strict oversight.
Lack of detailed performance metrics makes it difficult to assess contractor efficiency and effectiveness.
The long duration of the contract could indicate vendor lock-in, reducing future flexibility.

Positive Signals

The contract was awarded competitively, indicating an attempt to solicit offers.
The services provided are critical for national security and border protection operations.
The contractor, Unisys Corporation, is a large, established entity with experience in government IT services.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and maintenance. The market for such services is large and competitive, with numerous firms capable of providing system design, integration, and ongoing support. However, contracts for highly specialized systems like automated targeting often involve unique requirements and security clearances, which can narrow the field of potential bidders. Benchmarking this contract's value requires comparison with other large-scale, mission-critical IT maintenance contracts within federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through this award. The prime contractor, Unisys Corporation, is a large business. While large prime contractors often utilize small businesses for subcontracting opportunities across their portfolio, there is no specific requirement tied to this particular contract to ensure small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and specifically U.S. Customs and Border Protection (CBP). As a delivery order under a larger contract vehicle, oversight mechanisms would include contract administration, performance monitoring, and financial review. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Homeland Security IT Modernization Programs
Border Security Technology Modernization
Automated Passenger Information Systems
Customs and Border Protection IT Services
Federal Civilian IT Services Contracts

Risk Flags

Limited Competition
Time and Materials Contract Type
Lack of Specific Performance Metrics
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $261.0 million to UNISYS CORPORATION. AUTOMATED TARGETING SYSTEMS MAINTENANCE

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 $261.0 million.

What is the period of performance?

Start: 2006-12-15. End: 2011-09-28.

What is the specific nature of the 'Automated Targeting Systems' being maintained, and what are their critical functions for CBP?

The 'Automated Targeting Systems' (ATS) are sophisticated data analysis and risk assessment tools used by U.S. Customs and Border Protection (CBP) to identify high-risk individuals and goods crossing U.S. borders. These systems process vast amounts of data from various sources, including passenger manifests, cargo information, and intelligence databases, applying algorithms to predict potential threats related to terrorism, smuggling, and immigration violations. The maintenance provided under this contract ensures the continuous operation, reliability, and accuracy of these systems, which are fundamental to CBP's mission of securing U.S. borders while facilitating legitimate trade and travel. The effectiveness of ATS directly impacts national security by enabling CBP officers to focus resources on the most significant risks.

How does the Time and Materials (T&M) pricing structure for this contract potentially impact cost control and value for taxpayers?

The Time and Materials (T&M) pricing structure for this contract means that Unisys Corporation is reimbursed for the direct labor hours expended and the cost of materials used. While T&M can be flexible for requirements that are not clearly defined upfront, it carries a significant risk of cost escalation if not managed rigorously. Unlike fixed-price contracts, there is less incentive for the contractor to control costs or improve efficiency, as their profit is tied to the amount of time and resources consumed. For taxpayers, this means the total cost can exceed initial estimates, and effective oversight by CBP is crucial to ensure that labor hours are reasonable, rates are fair, and materials are necessary and cost-effective. Without strong oversight and clear performance metrics, T&M contracts can lead to overspending.

Given only one bid was received, what are the potential risks to CBP in terms of system performance and future innovation?

Receiving only one bid for this critical IT maintenance contract presents several risks for CBP. Firstly, the lack of competition limits CBP's ability to negotiate the best possible price and terms, potentially leading to higher overall costs for taxpayers. Secondly, without alternative providers to benchmark against, it becomes harder to ensure that Unisys Corporation is delivering optimal performance and value. Thirdly, a sole-source or limited-competition environment can stifle innovation. The incumbent contractor may have less incentive to proactively suggest cutting-edge solutions or process improvements if they are not facing competitive pressure from other firms eager to win future business. This could lead to the automated targeting systems becoming outdated or less effective over time compared to what might be achieved in a more competitive market.

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

Unisys Corporation has a long history of providing IT services to the federal government, including significant contracts with the Department of Homeland Security (DHS) and its component agencies like U.S. Customs and Border Protection (CBP). They have been involved in various large-scale projects related to legacy system modernization, cloud migration, cybersecurity, and mission-critical application support. Their experience often includes managing complex, high-volume data processing systems and ensuring system availability for agencies with demanding operational requirements. While specific performance details for individual contracts vary, Unisys is generally recognized as a major IT service provider capable of handling substantial government contracts. However, like many large contractors, they have also faced scrutiny and challenges on certain projects regarding cost, schedule, and performance, underscoring the importance of robust contract oversight.

How does the $261 million total award compare to historical spending on similar automated targeting or border security IT systems?

The $261 million total award for Automated Targeting Systems maintenance over approximately 4.8 years represents a substantial investment. To contextualize this, it would need to be compared against historical spending patterns for similar large-scale IT maintenance and modernization efforts within CBP and other federal agencies involved in border security and law enforcement. For instance, comparing the average annual cost (around $54.4 million) to the annual IT budgets of agencies like the FBI, TSA, or even international counterparts managing similar border challenges could provide a benchmark. Without access to specific historical data on comparable contracts, it's difficult to definitively state whether this represents high, low, or average spending. However, the scale suggests it is a significant contract within the federal IT procurement landscape.

Industry Classification

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

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 11720 PLAZA AMERICA DR, RESTON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $260,953,082

Exercised Options: $260,953,082

Current Obligation: $260,953,082

Parent Contract

Parent Award PIID: TIRNO06D00010

IDV Type: IDC

Timeline