DHS's $20.5M contract for inspection system maintenance awarded to CSRA LLC shows potential value concerns

Contract Overview

Contract Amount: $20,458,546 ($20.5M)

Contractor: Csra LLC

Awarding Agency: Department of Homeland Security

Start Date: 2006-10-01

End Date: 2011-12-30

Contract Duration: 1,916 days

Daily Burn Rate: $10.7K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: OPERATIONS AND MAINTENANCE OF SERVICES FOR INSPECTION SYSTEMS.

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $20.5 million to CSRA LLC for work described as: OPERATIONS AND MAINTENANCE OF SERVICES FOR INSPECTION SYSTEMS. Key points: 1. The contract's cost-plus award fee structure may incentivize higher spending. 2. A single award for a significant duration raises questions about competitive pressure. 3. The lack of specific performance metrics makes assessing value for money challenging. 4. This contract represents a small fraction of the agency's overall IT spending. 5. The follow-on nature suggests a reliance on incumbent knowledge, potentially limiting new solutions.

Value Assessment

Rating: fair

The contract's Cost Plus Award Fee (CPAF) structure, while allowing for flexibility, can sometimes lead to higher costs compared to fixed-price contracts if not managed tightly. Benchmarking against similar operations and maintenance contracts for inspection systems is difficult without more detailed performance data and cost breakdowns. The total value of $20.5 million over approximately five years suggests a significant investment, but the value proposition is unclear without defined performance outcomes and associated award fee criteria.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is described as a 'FOLLOW ON TO COMPETED ACTION,' implying that the original award was competed. However, the details of this specific delivery order suggest it may not have undergone a full and open competition, potentially limiting the pool of bidders. The nature of a follow-on action often means the incumbent contractor has an advantage, which can impact price discovery and innovation. Further details on the competition for this specific delivery order are needed to fully assess its breadth.

Taxpayer Impact: A limited competition may result in higher prices for taxpayers compared to a fully open solicitation, as the government may have fewer options to choose from.

Public Impact

This contract supports the U.S. Customs and Border Protection's mission to secure borders. It ensures the operational readiness of inspection systems critical for trade and travel. The services provided contribute to national security by facilitating legitimate trade and travel while deterring illicit activities. The contract's impact is primarily national, supporting border operations across various ports of entry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee structure could lead to cost overruns if not carefully managed.
Limited competition for follow-on actions may reduce price competitiveness.
Lack of detailed performance metrics makes it hard to assess contractor efficiency.
Long contract duration might stifle innovation if not actively managed.

Positive Signals

Contract supports critical national security functions for U.S. Customs and Border Protection.
Follow-on action indicates a level of trust and established performance with the incumbent.
The contract ensures the continued operation of essential inspection systems.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on the maintenance and support of specialized inspection systems. The market for such services is characterized by a mix of large prime contractors and specialized subcontractors. Spending in this area is driven by the need for continuous technological upgrades and reliable system performance to support government operations. Comparable spending benchmarks would typically involve analyzing other government contracts for similar IT maintenance and support services, particularly those related to border security and inspection technologies.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a follow-on action to a potentially larger contract, the prime contractor, CSRA LLC, is a large business. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on the extent to which CSRA utilizes small business partners for specialized services or components.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Customs and Border Protection contracting officers and program managers within the Department of Homeland Security. The effectiveness of oversight depends on robust performance monitoring, regular reviews of cost submissions, and adherence to the terms of the Cost Plus Award Fee structure. Transparency is facilitated through contract reporting mechanisms, though detailed public access to performance and cost data may be limited. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Homeland Security IT Modernization
Customs and Border Protection Technology Procurement
Federal Information Technology Services Contracts
Inspection and Surveillance Systems Maintenance

Risk Flags

Potential for cost overruns due to CPAF structure.
Limited competition may impact price and innovation.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $20.5 million to CSRA LLC. OPERATIONS AND MAINTENANCE OF SERVICES FOR INSPECTION SYSTEMS.

Who is the contractor on this award?

The obligated recipient is CSRA LLC.

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 $20.5 million.

What is the period of performance?

Start: 2006-10-01. End: 2011-12-30.

What was the original competition for this contract, and what was the outcome?

The provided data states this is a 'FOLLOW ON TO COMPETED ACTION,' indicating that the initial contract award was subject to competition. However, the specifics of that original competition, including the number of bidders, the evaluation criteria, and the winning proposal, are not detailed here. As a follow-on delivery order, it suggests that CSRA LLC was likely the incumbent or a successful bidder in a prior competitive process. Understanding the nature of that original competition is crucial for assessing whether the current delivery order benefits from a competitive environment or if it represents a continuation of a potentially less competitive arrangement.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for similar services, and what are the associated risks?

Cost Plus Award Fee (CPAF) contracts are often used when the scope of work is not precisely defined or when performance incentives are critical. Unlike fixed-price contracts, CPAF allows the contractor to recover all allowable costs plus a fee that is composed of a base amount and an award amount, which is contingent upon meeting specific performance objectives. This structure can be beneficial for complex projects requiring flexibility. However, it carries a higher risk of cost overruns compared to fixed-price contracts, as the government bears the cost risk. The effectiveness of CPAF hinges on well-defined performance metrics and objective award criteria; otherwise, it can incentivize contractors to maximize costs to increase the base fee, or lead to disputes over award fee determinations.

What specific inspection systems are covered under this contract, and what is their criticality to CBP operations?

The contract is for 'OPERATIONS AND MAINTENANCE OF SERVICES FOR INSPECTION SYSTEMS.' While the specific systems are not enumerated in the provided data, they are likely related to the U.S. Customs and Border Protection's (CBP) mission of securing borders and facilitating lawful trade and travel. This could include systems for cargo inspection (e.g., X-ray scanners, radiation detectors), passenger screening, or border surveillance. The criticality is high, as the reliable functioning of these systems is essential for maintaining national security, enforcing immigration laws, and managing the flow of goods and people across U.S. borders. Downtime or malfunction of these inspection systems could lead to significant delays, security vulnerabilities, and operational disruptions.

What is the historical spending trend for inspection system maintenance services by CBP or DHS?

Historical spending data for inspection system maintenance services by CBP or DHS is not provided in the current data extract. To establish a trend, one would need to analyze contract awards over several fiscal years for similar services. This would involve identifying all contracts related to the operation and maintenance of inspection systems, summing their values annually, and observing any patterns of increase or decrease. Such an analysis would help determine if the $20.5 million awarded to CSRA LLC is consistent with past spending, represents an escalation, or is part of a broader strategic investment in this capability. Without this historical context, it is difficult to assess the current contract's financial significance within the agency's budget.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. For a Cost Plus Award Fee (CPAF) contract, these metrics are crucial as they form the basis for determining the award fee. Typically, KPIs for maintenance contracts might include system uptime percentages, response times for service calls, repair turnaround times, and preventative maintenance completion rates. The absence of this information makes it challenging to objectively assess the contractor's performance and the value received by the government. A thorough review would require accessing the contract's Statement of Work (SOW) and award fee plan.

Industry Classification

NAICS: Information › Other Information Services › All Other Information Services

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

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 7700 HUBBLE DRIVE, LANHAM, MD, 20706

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,976,526

Exercised Options: $20,458,546

Current Obligation: $20,458,546

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: COW3D0986

IDV Type: IDC

Timeline