DoD's $28.5M IT support contract to D7, LLC faces scrutiny over limited competition and value

Contract Overview

Contract Amount: $28,520,853 ($28.5M)

Contractor: D7, LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-24

End Date: 2024-04-23

Contract Duration: 942 days

Daily Burn Rate: $30.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INFORMATION TECHNOLOGY SUPPORT SERVICES//S/A CORRECTED UNDEFINITIZED FIELD, V&V FY21 Q4//

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20814

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to D7, LLC for work described as: INFORMATION TECHNOLOGY SUPPORT SERVICES//S/A CORRECTED UNDEFINITIZED FIELD, V&V FY21 Q4// Key points: 1. The contract's value appears reasonable given the duration and scope of IT support services. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The firm fixed-price contract type shifts risk to the contractor, which is generally positive. 4. Performance context is limited due to the 'Not Available for Competition' designation. 5. This contract falls within the broader IT services sector, specifically computer systems design. 6. The Uniformed Services University of the Health Sciences is the primary beneficiary. 7. The contract's duration of 942 days suggests a significant, ongoing need for services.

Value Assessment

Rating: fair

The total award amount of $28.5 million over approximately 2.5 years averages to about $11.4 million annually. This figure seems within a reasonable range for comprehensive IT support services, especially considering the specialized nature of supporting a health sciences university. However, without more detailed service breakdowns or comparisons to similar contracts for academic medical institutions, a definitive value assessment is challenging. The firm fixed-price structure is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was designated as 'Not Available for Competition,' indicating a sole-source award. This significantly limits the opportunity for competitive bidding and price discovery. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), the lack of competition here suggests potential for higher costs and reduced market pressure to innovate or offer competitive pricing. The absence of multiple bidders means the government did not benefit from a range of proposals to choose from.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding. Without a competitive process, there's less assurance that the price reflects the best possible value achievable in the market.

Public Impact

The Uniformed Services University of the Health Sciences benefits from essential IT support, enabling its educational and research missions. Faculty, staff, and students at the university will receive uninterrupted access to critical IT infrastructure and services. The contract supports the operational readiness and technological advancement of a key Department of Defense medical education institution. Workforce implications are primarily within the IT support domain, potentially benefiting D7, LLC's employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can stifle innovation and reduce service quality over time.
Limited transparency into the justification for sole-source procurement.
Potential for vendor lock-in due to the absence of competitive alternatives.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Contract duration suggests a stable, long-term need being met.
Awardee D7, LLC is providing essential IT services to a critical DoD institution.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. Contracts like this, focused on support and maintenance, are common across various agencies. The market for these services is competitive, but specific niches, like those supporting specialized government institutions, can sometimes lead to less open competition. Benchmarks for similar IT support contracts vary widely based on scope, duration, and agency, but this award appears to be within a typical range for a multi-year, comprehensive support agreement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the awardee, D7, LLC, is not explicitly identified as a small business in the provided data. This means that opportunities for small business subcontracting may be limited unless D7, LLC voluntarily engages them. The lack of a set-aside or explicit small business focus means this contract does not directly contribute to the government's small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The Uniformed Services University of the Health Sciences likely has internal oversight mechanisms to monitor performance and ensure compliance. Transparency is somewhat limited due to the sole-source nature, but contract award data is generally publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Computer Systems Design Services
Federal IT Support Contracts
Uniformed Services University of the Health Sciences Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to limited competition.
Lack of detailed performance metrics hinders accountability.
Limited transparency regarding the necessity of sole-source procurement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to D7, LLC. INFORMATION TECHNOLOGY SUPPORT SERVICES//S/A CORRECTED UNDEFINITIZED FIELD, V&V FY21 Q4//

Who is the contractor on this award?

The obligated recipient is D7, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Uniformed Services University of the Health Sciences).

What is the total obligated amount?

The obligated amount is $28.5 million.

What is the period of performance?

Start: 2021-09-24. End: 2024-04-23.

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

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source awards. The specific justification for this designation is not detailed in the provided data. Typically, such justifications might include the existence of only one responsible source capable of providing the required services, urgent and compelling circumstances that preclude full and open competition, or specific national security reasons. Without further documentation from the Department of Defense, the precise rationale remains unclear. This lack of transparency is a common concern with sole-source procurements.

How does the pricing of this contract compare to similar IT support contracts awarded by the Department of Defense or other federal agencies?

A direct comparison of pricing is difficult without knowing the exact scope of services, service level agreements, and specific technologies supported. However, the average annual cost of approximately $11.4 million ($28.5M / 2.5 years) for comprehensive IT support at a specialized institution like the Uniformed Services University of the Health Sciences is not inherently excessive. To perform a robust benchmark, one would need to identify comparable contracts for IT systems design and support services awarded to similar institutions (e.g., other military academies, medical research facilities) over the same period, factoring in contract type (firm fixed-price) and duration. The lack of competition makes a true market-based price comparison challenging.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. These are critical components that define the expected quality, availability, and responsiveness of the IT support services. Typically, for IT support contracts, KPIs might include system uptime percentages, response times for help desk tickets, resolution times for critical issues, and successful implementation of system upgrades. The absence of this information in the summary data limits the ability to assess the contractor's performance objectively and hold them accountable to specific service standards.

What is the track record of D7, LLC in performing similar federal IT support contracts?

Information regarding D7, LLC's specific track record in performing similar federal IT support contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other federal contract awards, and any reported issues or successes. Given this is a sole-source award, it might imply that D7, LLC possesses unique qualifications or has a prior relationship with the agency. However, without access to their performance history, it's difficult to definitively gauge their reliability and capability for this specific task.

What is the historical spending trend for IT support services at the Uniformed Services University of the Health Sciences?

The provided data only includes details for this specific contract award (2021-2024). To understand the historical spending trend for IT support services at the Uniformed Services University of the Health Sciences, one would need to analyze contract data for previous years. This would involve searching federal procurement databases for all IT support-related contracts awarded to the university, noting the award amounts, contract types, and durations. Analyzing this trend would help determine if spending has increased, decreased, or remained stable, and whether this current contract represents a significant deviation from past expenditures.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HU000121R0024

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1755 TELSTAR DR STE 500, COLORADO SPRINGS, CO, 80920

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Native Hawaiian Organization Owned Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $43,451,895

Exercised Options: $28,520,853

Current Obligation: $28,520,853

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $3,500,910

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HU000121D0003

IDV Type: IDC

Timeline