DHS awards $37M for office machinery rental, raising questions on value and competition

Contract Overview

Contract Amount: $36,983,708 ($37.0M)

Contractor: Escgov, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2013-09-30

End Date: 2018-03-31

Contract Duration: 1,643 days

Daily Burn Rate: $22.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IBM SW RENEWAL

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20529

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37.0 million to ESCGOV, INC. for work described as: IBM SW RENEWAL Key points: 1. The contract's value appears high relative to the duration and service type. 2. Limited competition may have impacted pricing and overall value for taxpayers. 3. The contractor has a history of receiving federal awards, but specific performance data is limited. 4. This spending falls within the broader category of IT and administrative support services. 5. The contract's duration and fixed-price nature suggest a predictable cost structure. 6. Oversight mechanisms for this specific award need further examination to ensure accountability.

Value Assessment

Rating: fair

The total award amount of approximately $37 million over five years for office machinery rental and leasing appears substantial. Benchmarking against similar contracts is challenging without more granular data on the specific equipment and services provided. However, the per-year cost of roughly $7.4 million warrants scrutiny to ensure it aligns with market rates for comparable leasing agreements. The fixed-price nature of the contract provides cost certainty but may not fully capture potential savings if market conditions or needs change.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery. However, the number of bids received is not specified, making it difficult to assess the true level of competition. A robust competitive process typically involves multiple bidders vying for the contract, driving down prices and ensuring the government receives the best value. Without knowing the number of bidders, it's hard to definitively say if the competition was sufficiently robust.

Taxpayer Impact: While full and open competition was utilized, the effectiveness of this process in securing the best price for taxpayers depends on the number of actual bids submitted and the competitiveness among them.

Public Impact

Federal agencies, particularly within Homeland Security, benefit from access to necessary office machinery and equipment. The services delivered include the rental and leasing of office machinery, supporting daily operations. The geographic impact is concentrated in the District of Columbia, where the contract was administered. Workforce implications are indirect, primarily supporting the operational efficiency of government employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment given the contract's total value and duration.
Lack of detailed performance metrics makes it difficult to assess true value for money.
Limited transparency on the specific types and quantities of machinery leased.

Positive Signals

Awarded through full and open competition, suggesting an attempt to maximize value.
Fixed-price contract provides cost certainty for the agency.
Contract duration aligns with typical equipment leasing cycles.

Sector Analysis

This contract falls within the broader Information Technology (IT) and administrative services sector, specifically focusing on office equipment leasing. The market for office machinery rental and leasing is competitive, with numerous providers offering a range of equipment and services. Federal spending in this area supports the operational needs of various agencies. Comparable spending benchmarks are difficult to establish without specific details on the equipment leased, but the overall value suggests a significant operational footprint.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses through set-asides is minimal. However, the prime contractor, ESCGOV, INC., may engage small businesses as subcontractors, though this information is not detailed in the award data. The absence of specific small business goals means opportunities for smaller firms in this particular procurement are not guaranteed.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Homeland Security's contracting officers and potentially its Inspector General's office. Transparency is enhanced by the public nature of contract awards, but detailed operational oversight and performance monitoring are internal processes. Accountability measures would include adherence to the contract terms, delivery of services as specified, and compliance with federal procurement regulations. The effectiveness of these oversight mechanisms depends on the diligence of the agency's contracting and audit functions.

Related Government Programs

General Services Administration (GSA) Schedules
IT Equipment Leasing
Office Equipment Procurement
Federal Agency Administrative Support

Risk Flags

High contract value relative to duration.
Lack of detailed performance metrics.
Ambiguity in competition effectiveness due to unknown number of bidders.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37.0 million to ESCGOV, INC.. IBM SW RENEWAL

Who is the contractor on this award?

The obligated recipient is ESCGOV, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Citizenship and Immigration Services).

What is the total obligated amount?

The obligated amount is $37.0 million.

What is the period of performance?

Start: 2013-09-30. End: 2018-03-31.

What specific types and quantities of office machinery were included in this $37 million contract?

The provided data does not specify the exact types and quantities of office machinery included in the $37 million contract awarded to ESCGOV, INC. The North American Industry Classification System (NAICS) code 532420, 'Office Machinery and Equipment Rental and Leasing,' is broad and encompasses a wide range of items such as copiers, printers, computers, servers, and other office equipment. Without a detailed schedule of equipment, it is impossible to perform a precise cost-benefit analysis or benchmark the pricing effectively. This lack of specificity is a common challenge in analyzing large, multi-year federal contracts.

How does the per-year cost of this contract compare to industry benchmarks for similar leasing agreements?

A direct comparison of the per-year cost of approximately $7.4 million ($37 million / 5 years) to industry benchmarks for similar leasing agreements is difficult without knowing the specific types, quantities, and service levels of the office machinery involved. General office equipment leasing can vary significantly in price based on factors like brand, model, features, maintenance agreements, and lease duration. To conduct a meaningful benchmark, one would need to compare the cost of specific leased items (e.g., high-volume copiers, specialized servers) against prevailing market rates for those exact items over similar lease terms. The broad nature of the award data prevents such a granular comparison.

What was the track record of ESCGOV, INC. prior to receiving this significant DHS contract?

Information regarding ESCGOV, INC.'s specific track record prior to this Department of Homeland Security (DHS) contract is not detailed in the provided data. Federal procurement databases often contain award histories for contractors. To assess their track record, one would typically look at past performance evaluations, the types and values of previous contracts awarded, and any history of contract disputes or terminations. A contractor's history of successful performance on similar federal contracts is a key indicator of their capability and reliability. Without access to a more comprehensive contractor performance history, it's difficult to fully evaluate their suitability for this large award.

Were there any specific performance metrics or service level agreements (SLAs) tied to this contract?

The provided data does not explicitly detail the specific performance metrics or service level agreements (SLAs) associated with this contract. Federal contracts, especially for services like equipment leasing, typically include clauses outlining expected performance standards, delivery timelines, maintenance response times, and equipment uptime requirements. These SLAs are crucial for ensuring the government receives the value it pays for and for holding the contractor accountable. The absence of this information in the summary data means a thorough assessment of the contract's effectiveness and the contractor's adherence to standards cannot be made.

What is the historical spending trend for office machinery rental and leasing within DHS or USCIS?

The provided data focuses on a single contract award and does not offer historical spending trends for office machinery rental and leasing within the Department of Homeland Security (DHS) or U.S. Citizenship and Immigration Services (USCIS). To analyze historical spending, one would need to query federal procurement databases for all contracts awarded under NAICS code 532420 (or similar codes) by these agencies over several fiscal years. This would reveal patterns in spending levels, average contract values, and the prevalence of different contract types (e.g., full and open vs. sole source). Such analysis is essential for understanding budget allocation and identifying potential anomalies or efficiencies over time.

Given the 'full and open competition' designation, how many bids were actually received, and what does this imply for price discovery?

While the contract is designated as 'full and open competition,' the provided data does not specify the number of bids received. This is a critical piece of information for assessing the effectiveness of the competition. If only one or two bids were received, the competition may not have been robust enough to drive optimal price discovery, potentially leading to higher costs for the government. Conversely, a significant number of bids would indicate a healthy competitive environment, increasing the likelihood that the government secured a fair market price. The implication for taxpayers is that a lack of strong competition, even under a 'full and open' umbrella, can result in suboptimal value.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HSSCCG-13-Q-00636

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 8300 GREENSBORO DR. SUITE 1150, MC LEAN, VA, 22102

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,003,850

Exercised Options: $36,983,708

Current Obligation: $36,983,708

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HSHQDC11A00040

IDV Type: BPA

Timeline