DHS's $26.3M IT support contract to NTT DATA awarded without competition, spanning over 3 years

Contract Overview

Contract Amount: $26,268,978 ($26.3M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2006-10-02

End Date: 2010-09-30

Contract Duration: 1,459 days

Daily Burn Rate: $18.0K/day

Competition Type: NOT COMPETED

Sector: IT

Official Description: INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20593

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $26.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES Key points: 1. The contract's value of $26.3 million over its duration suggests a significant investment in IT support. 2. Awarded without competition, this contract raises questions about potential cost efficiencies and market alternatives. 3. The long duration of the contract (over 3 years) may indicate a need for sustained IT services. 4. The specific IT services provided under this contract are crucial for the operational continuity of the U.S. Coast Guard. 5. The lack of competition could limit opportunities for other vendors and potentially impact innovation. 6. The contract's performance context is tied to the critical IT infrastructure needs of a major federal agency.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without detailed service descriptions and performance metrics. However, a $26.3 million IT support contract awarded without competition over three years warrants scrutiny. Comparing it to similar sole-source or limited-competition IT support contracts within the Department of Homeland Security or other agencies could reveal if the pricing is aligned with market rates for comparable services. The absence of competitive bidding means there's no direct price discovery mechanism to ensure optimal value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific vendor possesses unique capabilities or when circumstances preclude a competitive process. The lack of competition means that the U.S. Coast Guard did not solicit bids from other qualified IT support providers, potentially limiting the exploration of alternative solutions or pricing structures.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also bypasses opportunities to engage with a broader range of small and large businesses.

Public Impact

The U.S. Coast Guard benefits from sustained IT support services, ensuring the reliability of its critical systems. This contract supports the operational readiness and technological infrastructure necessary for the Coast Guard's maritime security and safety missions. The primary beneficiaries are the internal users and operational units within the U.S. Coast Guard who rely on robust IT services. The contract has implications for the IT workforce, potentially through direct employment by the contractor or through the services enabling government personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs compared to a competitively bid contract.
Sole-source awards can reduce transparency and accountability in the procurement process.
Potential for vendor lock-in, making it difficult to switch providers in the future.
Limited opportunities for small businesses to participate in providing these critical IT services.

Positive Signals

Ensures continuity of essential IT support services for a critical federal agency.
NTT DATA's established presence may indicate a proven ability to meet the Coast Guard's specific needs.
Long-term contract could foster a stable working relationship and deep understanding of agency requirements.

Sector Analysis

The IT support services sector is a vast and critical component of federal spending, encompassing a wide range of activities from infrastructure management to software development. This contract falls under the 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' NAICS code. Federal spending in this area is consistently high, driven by the increasing reliance on digital systems across all government functions. Comparable spending benchmarks for IT support services can vary widely based on scope, duration, and competition, but large-scale contracts like this represent a significant portion of agency IT budgets.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. The sole-source nature of the award limits opportunities for small businesses to compete for this particular contract. Without a competitive bidding process that includes small business participation goals, the impact on the small business IT ecosystem for this specific award is likely minimal, potentially missing opportunities to foster growth and innovation within that sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Homeland Security IT Modernization Initiatives
U.S. Coast Guard IT Infrastructure Modernization
Federal Civilian IT Services Contracts
IT Support Services for Federal Agencies

Risk Flags

Sole-source award bypasses competitive bidding.
Potential for higher costs due to lack of competition.
Limited transparency regarding the justification for sole-source award.
Long contract duration may increase risk of vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $26.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. INFORMATION TECHNOLOGY (IT) SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is NTT DATA SERVICES FEDERAL GOVERNMENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2006-10-02. End: 2010-09-30.

What specific IT support services are being provided under this contract, and how do they align with the U.S. Coast Guard's mission-critical functions?

The provided data indicates the contract falls under NAICS code 518210 (Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services). While specific service details are not itemized, this generally encompasses services such as data center operations, cloud hosting, network management, IT infrastructure support, and potentially managed IT services. For the U.S. Coast Guard, these services are vital for maintaining operational command and control systems, communication networks, data management for maritime domain awareness, logistics, personnel management, and cybersecurity defenses. The continuity and reliability of these IT services directly impact the Coast Guard's ability to perform its diverse missions, from search and rescue to national security operations.

What was the justification for awarding this significant IT support contract on a sole-source basis instead of through full and open competition?

The provided data explicitly states the contract was 'NOT COMPETED' and is a 'SOLE SOURCE' type. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Without further documentation (like a Justification and Approval document), the precise reason for this sole-source award remains unknown. However, common justifications include unique technical capabilities, proprietary technology, or a critical need that cannot be met through a competitive process within the required timeframe. The lack of competition means taxpayers did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.

How does the total contract value of $26.3 million compare to typical IT support contracts for agencies of similar size and scope within the federal government?

A total contract value of $26.3 million over approximately three years (from Oct 2006 to Sep 2010) for IT support services is substantial. To benchmark this effectively, one would need to compare it against IT support contracts awarded to agencies with similar operational complexities and IT footprints as the U.S. Coast Guard. For instance, comparing it to IT support contracts within other branches of the Department of Homeland Security, or other large federal law enforcement and maritime agencies, would provide context. However, given that this was a sole-source award, its value might be higher than what could have been achieved through competition. Without detailed service breakdowns and performance metrics, a precise value-for-money assessment is difficult, but the amount signifies a significant investment in maintaining the Coast Guard's IT infrastructure.

What are the potential risks associated with a long-term, sole-source IT support contract, and what mitigation strategies might be in place?

Key risks associated with long-term, sole-source IT contracts include potential cost overruns due to the lack of competitive pressure, vendor lock-in making it difficult and costly to switch providers, and a potential decline in service quality or innovation over time as the vendor faces less market scrutiny. Mitigation strategies, if implemented, could include robust performance monitoring, clearly defined service level agreements (SLAs) with penalties for non-performance, regular contract reviews, and potentially incorporating options for competitive re-competition at defined intervals. However, the inherent nature of a sole-source award limits proactive mitigation through market forces. Oversight from the agency's contracting officers and program managers is crucial to manage these risks.

What is NTT DATA SERVICES FEDERAL GOVERNMENT, LLC's track record in providing IT support services to federal agencies, particularly within the Department of Homeland Security?

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC (and its predecessors/affiliates) has a significant history of contracting with the federal government, including within the Department of Homeland Security (DHS). Their portfolio often includes a wide range of IT services, from infrastructure management and application development to cybersecurity and data analytics. While this specific contract was sole-source, the company's broader federal contracting history suggests experience in meeting complex government requirements. A thorough assessment would involve reviewing past performance evaluations, contract modifications, and the overall scope and success of their previous engagements with DHS and other agencies to gauge their reliability and capability in delivering critical IT support.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Evaluated Preference: NONE

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

Address: 8550 ARLINGTON BLVD, FAIRFAX, VA, 22031

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,268,978

Exercised Options: $26,268,978

Current Obligation: $26,268,978

Parent Contract

Parent Award PIID: HSCG2306ATBX004

IDV Type: BPA

Timeline