DHS awarded $12.7M for data center migration services to Accenture LLP over 6 years

Contract Overview

Contract Amount: $12,706,307 ($12.7M)

Contractor: Accenture LLP

Awarding Agency: Department of Homeland Security

Start Date: 2008-09-12

End Date: 2014-05-27

Contract Duration: 2,083 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: DATA CENTER MIGRATION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20528

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $12.7 million to ACCENTURE LLP for work described as: DATA CENTER MIGRATION Key points: 1. The contract utilized a cost-plus-fixed-fee structure, which can lead to cost overruns if not closely managed. 2. Full and open competition was used, suggesting a robust market for these services. 3. The contract duration of over 6 years indicates a long-term need for data center migration support. 4. The North American Industry Classification System (NAICS) code 561499 covers a broad range of business support services, potentially encompassing more than just data center migration. 5. The contract was awarded as a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework. 6. The geographic location is Washington D.C., a hub for federal contracting activity.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without knowing the specific scope of work and the services provided under the 'All Other Business Support Services' NAICS code. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex projects, carries inherent risks of cost escalation if not meticulously monitored. Comparing this to similar data center migration contracts would require detailed service level agreements and performance metrics, which are not provided here. The total value of $12.7 million over nearly six years suggests an average annual spend of approximately $2.1 million, which could be reasonable or high depending on the complexity and scale of the migration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of Homeland Security sought bids from all responsible sources. This approach generally fosters a competitive environment, encouraging multiple vendors to submit proposals. The number of bidders is not specified, but the use of full and open competition suggests that the agency aimed to leverage market forces to secure the best value. This method is typically preferred for its transparency and potential to drive down costs through competitive pricing.

Taxpayer Impact: Taxpayers benefit from full and open competition as it increases the likelihood of obtaining services at a fair and reasonable price by allowing a wide range of qualified contractors to compete.

Public Impact

The primary beneficiary is the Department of Homeland Security, which receives essential services for its data center infrastructure. The services delivered are related to data center migration, crucial for modernizing IT operations and ensuring data security and accessibility. The geographic impact is concentrated in the District of Columbia, where the services were likely performed or managed. Workforce implications could include employment opportunities for IT professionals, project managers, and support staff involved in data center operations and migration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The broad NAICS code (561499) may obscure the specific nature and cost drivers of the services rendered, making precise value assessment difficult.
Cost-plus-fixed-fee contracts require diligent oversight to prevent scope creep and ensure costs remain within reasonable bounds.
The long contract duration could lead to vendor lock-in or reduced incentive for innovation if not managed proactively.

Positive Signals

The use of full and open competition suggests a commitment to leveraging market competition for best value.
The contract addresses a critical IT infrastructure need for a major federal agency.
The award to a well-established contractor like Accenture LLP may indicate a level of confidence in their capability to perform complex IT services.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on data center operations and migration. The IT services market for the federal government is substantial, with significant spending allocated to infrastructure modernization, cloud computing, and cybersecurity. Data center migration is a key component of IT modernization efforts, aimed at improving efficiency, reducing costs, and enhancing agility. Comparable spending benchmarks would typically be found within IT infrastructure services, managed services, and cloud migration categories, where large-scale projects can range from millions to hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information about subcontracting plans. Given the nature and potential scale of data center migration services, it is plausible that larger prime contractors like Accenture LLP would be involved. The absence of small business set-aside information suggests that the competition was likely focused on larger, established firms capable of undertaking such complex projects. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of Homeland Security. Accountability measures would be defined in the contract's statement of work, including performance standards, delivery schedules, and reporting requirements. Transparency is generally facilitated through contract databases like FPDS-NG, which provide public access to contract award details. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse related to the contract were to arise.

Related Government Programs

Department of Homeland Security IT Modernization Programs
Federal Data Center Consolidation Initiative (FDCCI)
IT Services and Support Contracts
Cloud Computing Services
Infrastructure Modernization

Risk Flags

Potential for cost overruns due to CPFF structure
Limited competition indicated by single offer
Broad NAICS code may obscure specific service costs
Long contract duration requires careful management

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $12.7 million to ACCENTURE LLP. DATA CENTER MIGRATION

Who is the contractor on this award?

The obligated recipient is ACCENTURE LLP.

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 $12.7 million.

What is the period of performance?

Start: 2008-09-12. End: 2014-05-27.

What specific data center migration services were included under this contract, and how did the scope evolve over its duration?

The provided data indicates the contract was for 'DATA CENTER MIGRATION' under NAICS code 561499 ('All Other Business Support Services'). However, the specific services are not detailed. Data center migration can encompass a wide range of activities, including physical relocation of servers, virtual machine migration, application re-platforming, data transfer, network reconfiguration, and decommissioning of old facilities. The duration of the contract (2008-2014) suggests that the scope might have evolved, potentially incorporating new technologies or changing agency requirements over the six years. Without access to the contract's statement of work (SOW) and any modifications, it's impossible to ascertain the precise services rendered or how they changed.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar IT migration projects, and what are the associated risks?

Cost-plus-fixed-fee (CPFF) contracts are often used for complex projects where the scope is not fully defined at the outset or is expected to evolve, such as IT migrations. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers flexibility but shifts some cost risk to the government. Fixed-price contracts provide greater cost certainty for the government but can be challenging to implement if scope is uncertain, potentially leading to disputes or contractor reluctance to perform beyond the defined scope. The primary risk with CPFF is that costs can exceed initial estimates if not rigorously managed, potentially leading to budget overruns. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks.

What was the total number of bids received for this contract, and how does this number influence price discovery and value for taxpayers?

The provided data indicates 'no': 1, which typically refers to the number of offers received. In this case, it suggests only one offer was received. If only one offer was received under a full and open competition, it raises concerns about the effectiveness of the competition. A single offer can indicate that the solicitation was not widely known, that the requirements were too restrictive, or that potential competitors chose not to bid for other reasons. This lack of competition can limit price discovery, as there is no benchmark against other proposals. Consequently, taxpayers may not have received the best possible price, and the government may not have had a wide range of technical solutions to choose from. Further investigation into the solicitation process would be warranted.

Can the annual spending of approximately $2.1 million for data center migration services be considered competitive or excessive given the contract's duration and scope?

Determining if $2.1 million annually is competitive or excessive for data center migration services is difficult without specific details on the scope of work, the complexity of the data centers involved, the number of servers or applications migrated, and the specific services provided (e.g., hardware, software, labor, consulting). Data center migration projects can vary significantly in cost. Factors such as the size of the data centers, the criticality of the data, the required downtime, and the chosen migration strategy (e.g., lift-and-shift, re-platforming, re-architecting) heavily influence the overall expense. A $2.1 million annual spend might be reasonable for a large-scale, complex migration involving multiple facilities and extensive services, but it could be high for a smaller or simpler project. Benchmarking against similar government or private sector projects with comparable scope would be necessary for a definitive assessment.

What is Accenture LLP's track record with the Department of Homeland Security and similar large-scale IT migration contracts?

Accenture LLP is a major global consulting and IT services firm with a significant presence in the federal contracting space, including with the Department of Homeland Security (DHS). They have a history of performing large, complex IT projects for various government agencies. While specific details of their track record on data center migration contracts with DHS are not provided in this data snippet, Accenture's overall profile suggests they possess the resources and expertise typically required for such endeavors. However, a comprehensive assessment would involve reviewing past performance evaluations, contract histories, and any reported issues or successes on similar projects awarded to Accenture by DHS or other federal entities.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,734,039

Exercised Options: $12,734,039

Current Obligation: $12,706,307

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSSCHQ04D00096

IDV Type: IDC

Timeline