DoD's $115M computer equipment contract awarded to Countertrade Products, Inc. shows potential value concerns
Contract Overview
Contract Amount: $115,032,293 ($115.0M)
Contractor: Countertrade Products, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-09-27
End Date: 2022-09-30
Contract Duration: 3 days
Daily Burn Rate: $38.3M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: COMPUTER EQUIPMENT
Place of Performance
Location: JBSA FT SAM HOUSTON, BEXAR County, TEXAS, 78234
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $115.0 million to COUNTERTRADE PRODUCTS, INC. for work described as: COMPUTER EQUIPMENT Key points: 1. The contract's value appears high relative to the short duration and limited number of delivery orders. 2. Competition was full and open, suggesting a theoretically competitive pricing environment. 3. The contractor, Countertrade Products, Inc., has a track record that warrants further investigation for performance and pricing. 4. The contract falls within the broader IT hardware sector, characterized by rapid technological change and price fluctuations. 5. Performance context is limited due to the short delivery period and focus on equipment provision. 6. Risk indicators include potential overpricing given the contract's structure and the contractor's specific market niche.
Value Assessment
Rating: fair
The total award of $115 million for computer equipment over a 3-year period, with only 4 delivery orders, suggests a potentially high average value per order. Benchmarking against similar large-scale IT equipment procurements is necessary to determine if the pricing is competitive. The firm fixed-price nature provides cost certainty but may not reflect market efficiencies if competition was not robustly leveraged.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. While this suggests a broad competitive landscape, the number of bidders and the specific terms of the competition are crucial for assessing price discovery. The fact that it was competed broadly is a positive sign for potential value.
Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially driving down costs for government procurements.
Public Impact
The primary beneficiaries are likely Department of Defense personnel requiring computer equipment for operational readiness. The contract delivers essential computer hardware, supporting various military and administrative functions. The geographic impact is likely widespread within DoD facilities, though specific locations are not detailed. Workforce implications may include IT support roles for deployment and maintenance of the equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for over-reliance on a single awardee for a significant volume of equipment.
- Lack of detailed performance metrics makes it difficult to assess efficiency and effectiveness.
- Firm Fixed Price contracts can sometimes lead to higher initial costs if not aggressively negotiated.
- The specific nature of 'computer equipment' is broad and could encompass a wide range of price points.
Positive Signals
- Awarded under full and open competition, maximizing the pool of potential offerors.
- Firm Fixed Price contract type provides budget certainty for the agency.
- The contract supports critical defense operations by providing necessary IT hardware.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on computer hardware procurement. The IT hardware market is dynamic, with rapid obsolescence and fluctuating prices. Comparable spending benchmarks would involve analyzing other large-scale federal contracts for similar computer equipment, considering factors like volume, specifications, and delivery timelines. The total value of $115 million positions this as a significant procurement within the federal IT landscape.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this award. The focus appears to be on larger-scale procurement, likely through established IT hardware vendors.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and fair pricing. Transparency is facilitated through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- General Services Administration (GSA) IT Schedule contracts
- Department of Defense Enterprise IT procurements
- Federal civilian agency computer hardware purchases
Risk Flags
- Potential for price inflation due to broad 'computer equipment' category.
- Limited performance data available for assessment.
- Contract duration vs. total value may indicate high unit costs.
- Contractor's specific experience with large-scale DoD IT hardware procurements requires verification.
Tags
it, defense, computer-equipment, firm-fixed-price, full-and-open-competition, department-of-defense, defense-health-agency, large-contract, it-hardware, countertrade-products-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $115.0 million to COUNTERTRADE PRODUCTS, INC.. COMPUTER EQUIPMENT
Who is the contractor on this award?
The obligated recipient is COUNTERTRADE PRODUCTS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $115.0 million.
What is the period of performance?
Start: 2022-09-27. End: 2022-09-30.
What is the track record of Countertrade Products, Inc. with federal contracts, particularly for computer equipment?
Countertrade Products, Inc. has received federal contracts, including this significant award from the Defense Health Agency. A deeper analysis of their contract history would involve examining past performance reviews, any documented issues with delivery or quality, and their pricing trends on similar items. Understanding their experience with large-volume IT hardware procurements and their ability to meet stringent defense requirements is crucial. Without specific past performance data readily available in this summary, further investigation into their federal award history and any associated performance metrics would be necessary to fully assess their reliability and value proposition.
How does the per-unit cost of the computer equipment compare to market rates or similar federal contracts?
The provided data does not include specific unit costs, making a direct per-unit comparison impossible. The total award of $115 million spread across potentially numerous units of computer equipment over three years requires detailed itemization to benchmark effectively. To assess value, one would need to compare the prices of specific models or types of computer equipment procured under this contract against prices available through GSA Schedules, other agency contracts, or commercial market research. The firm fixed-price nature means the agency agreed to a set price, but without knowing the exact items and quantities, it's difficult to ascertain if that price was competitive at the time of award.
What are the primary risk indicators associated with this contract award?
Key risk indicators include the potential for the firm fixed-price contract to be less cost-effective if market prices decrease significantly after award. The broad categorization of 'computer equipment' could mask variations in complexity and cost, making it harder to ensure optimal value. Furthermore, while awarded under full and open competition, the specific number of bidders and the nature of their proposals are not detailed, leaving a potential risk that competition may not have driven the absolute lowest price. The contractor's specific market niche and potential lack of extensive large-scale IT hardware experience could also present performance risks.
How effective has the Defense Health Agency been in procuring IT equipment through similar contracts?
Assessing the overall effectiveness of the Defense Health Agency (DHA) in procuring IT equipment requires a broader analysis of their procurement history beyond this single contract. This specific award, valued at $115 million, is substantial. Its effectiveness would be measured by factors such as on-time delivery, equipment reliability, user satisfaction, and adherence to budget. Examining past DHA IT procurements, including their success rates, cost savings achieved, and any challenges encountered, would provide a more comprehensive view of their procurement effectiveness in the IT domain.
What are the historical spending patterns for computer equipment by the Department of Defense?
The Department of Defense is a massive consumer of IT hardware, including computer equipment, with annual spending often in the billions of dollars across various agencies and branches. Historical spending patterns reveal a consistent and significant demand for laptops, desktops, servers, and related peripherals to support global operations. This spending is influenced by factors such as technological refresh cycles, evolving cybersecurity requirements, and the need to equip new personnel. Contracts like this one represent a portion of that overall, substantial federal investment in IT infrastructure.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: IT AND TELECOM - DATA CENTER
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7585 W 66TH AVE, ARVADA, CO, 80003
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $209,673,709
Exercised Options: $115,032,293
Current Obligation: $115,032,293
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SC05B
IDV Type: GWAC
Timeline
Start Date: 2022-09-27
Current End Date: 2022-09-30
Potential End Date: 2022-09-30 00:00:00
Last Modified: 2023-05-31
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