DHS awards $488M for OBIM infrastructure O&M, raising questions on competition and value

Contract Overview

Contract Amount: $487,939,007 ($487.9M)

Contractor: Csra LLC

Awarding Agency: Department of Homeland Security

Start Date: 2015-12-24

End Date: 2019-04-30

Contract Duration: 1,223 days

Daily Burn Rate: $399.0K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CT::IGF THE SCOPE OF THIS TASK ORDER IS TO OPERATE, AND MAINTAIN THE OBIM INFRASTRUCTURE COMPONENTS AND ASSOCIATED FUNCTIONALITY OF THE PRODUCTION AND NON-PRODUCTION IDENT ENVIRONMENTS AND ASSOCIATED BUSINESS SYSTEMS CURRENTLY DEPLOYED WITH THE DHS DATA CENTERS 1&2. OPERATIONS AND MAINTENANCE ACTIVITIES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $487.9 million to CSRA LLC for work described as: IGF::CT::IGF THE SCOPE OF THIS TASK ORDER IS TO OPERATE, AND MAINTAIN THE OBIM INFRASTRUCTURE COMPONENTS AND ASSOCIATED FUNCTIONALITY OF THE PRODUCTION AND NON-PRODUCTION IDENT ENVIRONMENTS AND ASSOCIATED BUSINESS SYSTEMS CURRENTLY DEPLOYED WITH THE DHS DATA CENTERS 1&2. OPERATI… Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant investment in IT infrastructure operations and maintenance for critical homeland security systems. 3. Performance period spans over three years, indicating a long-term need for these services. 4. The contract type (Time and Materials) can lead to cost overruns if not closely managed. 5. Lack of competition suggests potential risks related to contractor performance and innovation. 6. The value of the contract is substantial, requiring robust oversight to ensure taxpayer funds are used effectively.

Value Assessment

Rating: questionable

The contract's value of approximately $488 million over its period of performance is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The Time and Materials (T&M) contract type, while offering flexibility, also presents a higher risk of cost escalation compared to fixed-price contracts. The absence of competition means there's less external pressure to optimize costs, making value for money a significant concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach bypasses the standard competitive procurement process, which typically involves multiple bidders vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less robust price discovery and can limit the government's ability to secure the best possible value.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that typically arise from a competitive bidding environment. This could translate to higher overall spending for the services provided.

Public Impact

The primary beneficiaries are the Department of Homeland Security (DHS) and its various components relying on the OBIM infrastructure. Services delivered include the operation and maintenance of critical IT infrastructure for identity management systems. The geographic impact is primarily within DHS data centers, supporting national identity verification capabilities. Workforce implications include the need for skilled IT professionals to manage and maintain complex systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Time and Materials contract type increases risk of cost overruns without strict oversight.
Lack of competition may reduce incentives for contractor innovation and efficiency.
The substantial contract value necessitates rigorous performance monitoring to ensure accountability.

Positive Signals

Ensures continuity of critical IT infrastructure for homeland security operations.
Addresses a long-term operational need for maintaining essential government systems.
The contractor is responsible for maintaining complex production and non-production environments.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management and operations. The market for such services is large and competitive, with numerous providers capable of offering infrastructure support. However, the sole-source nature of this award suggests specific circumstances or a lack of available alternatives for this particular scope of work within DHS's existing framework. Comparable spending benchmarks are difficult to establish without knowing the specific technologies and service levels required.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large contractor (CSRA LLC), there are likely limited direct subcontracting opportunities for small businesses within this specific task order. The focus is on a large-scale IT infrastructure operation rather than services typically procured through small business set-asides.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract officers, program managers within DHS, and potentially the DHS Office of Inspector General (OIG). Given the sole-source nature and T&M contract type, rigorous oversight of performance metrics, billing, and adherence to scope is crucial. Transparency would be enhanced through regular reporting requirements and performance reviews, though the limited competition reduces public visibility into the justification for the award.

Related Government Programs

DHS OBIM Program
Homeland Security IT Infrastructure
Identity Management Systems Operations
Federal Data Center Operations and Maintenance
IT Services Contracts

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Time and Materials contract type increases risk of cost escalation.
Lack of transparency regarding the justification for sole-source award.
Significant contract value requires robust oversight to ensure accountability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $487.9 million to CSRA LLC. IGF::CT::IGF THE SCOPE OF THIS TASK ORDER IS TO OPERATE, AND MAINTAIN THE OBIM INFRASTRUCTURE COMPONENTS AND ASSOCIATED FUNCTIONALITY OF THE PRODUCTION AND NON-PRODUCTION IDENT ENVIRONMENTS AND ASSOCIATED BUSINESS SYSTEMS CURRENTLY DEPLOYED WITH THE DHS DATA CENTERS 1&2. OPERATIONS AND MAINTENANCE ACTIVITIES.

Who is the contractor on this award?

The obligated recipient is CSRA LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $487.9 million.

What is the period of performance?

Start: 2015-12-24. End: 2019-04-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source capable of providing the required services, urgent and compelling needs, or when a public interest determination is made. Without further documentation, it is impossible to ascertain the precise reason DHS chose not to compete this requirement. This lack of transparency is a key area for further investigation, as competitive bidding is generally preferred to ensure best value for taxpayers.

How does the Time and Materials (T&M) contract type compare to other contract types in terms of cost control for IT infrastructure O&M?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or when the level of effort is uncertain. While they offer flexibility, they carry a higher risk of cost overruns compared to fixed-price contracts because the government pays for the actual labor hours and materials used, plus a fixed fee or percentage. For IT infrastructure operations and maintenance, where tasks can be repetitive but also subject to unforeseen issues, T&M can be appropriate. However, it necessitates stringent oversight, including labor hour limitations and detailed tracking of material costs, to prevent excessive spending. Fixed-price or cost-plus-fixed-fee contracts might offer better cost predictability if the scope can be well-defined.

What are the potential risks associated with the lack of competition for this significant IT contract?

The primary risk of a sole-source award is the absence of competitive pressure, which can lead to inflated pricing and reduced incentives for the contractor to innovate or improve efficiency. Without competing offers, the government may not be aware of or benefit from potentially lower prices or superior technical solutions available in the market. Furthermore, a sole-source award can create vendor lock-in, making it difficult and costly to switch providers in the future. It also raises concerns about whether the government truly explored all available options and obtained the best possible value for taxpayer dollars.

What performance metrics are likely being used to oversee this contract, and how effective are they?

While specific performance metrics are not detailed in the provided data, typical oversight for IT Operations and Maintenance (O&M) contracts includes metrics related to system uptime and availability, response times for incidents, resolution times for issues, security compliance, and adherence to service level agreements (SLAs). For a Time and Materials contract, tracking the accuracy and necessity of labor hours billed is also critical. The effectiveness of these metrics depends heavily on the government's diligence in monitoring them, the clarity of the SLAs, and the contractor's responsiveness to performance feedback. Given the sole-source nature, robust government oversight is paramount.

How does this contract's value compare to other federal IT infrastructure O&M contracts?

The contract value of approximately $488 million over roughly 3.5 years is substantial, placing it among significant federal IT infrastructure support contracts. However, a direct comparison is challenging without knowing the specific scope, scale, and complexity of the OBIM infrastructure it supports. Federal IT O&M contracts can range from a few million to hundreds of millions of dollars annually, depending on the agency, the systems involved (e.g., legacy vs. modern, classified vs. unclassified), and the breadth of services (e.g., hardware, software, network, cybersecurity). The sole-source nature of this award makes benchmarking against competitively awarded contracts difficult.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $487,939,007

Exercised Options: $487,939,007

Current Obligation: $487,939,007

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $1,922,382

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: HSHQDC16D00001

IDV Type: IDC

Timeline