Interior's $73M SAP Hosting Contract with SAIC Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $73,235,607 ($73.2M)
Contractor: Science Applications International Corp
Awarding Agency: Department of the Interior
Start Date: 2013-05-01
End Date: 2024-04-29
Contract Duration: 4,016 days
Daily Burn Rate: $18.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: IGF::OT::IGF SAP APPLICATION HOSTING SERVICES
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of the Interior obligated $73.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORP for work described as: IGF::OT::IGF SAP APPLICATION HOSTING SERVICES Key points: 1. The contract value of $73.2M over 11 years raises questions about long-term cost-effectiveness. 2. Full and open competition was used, but the impact on price discovery needs further analysis. 3. Potential risks include vendor lock-in and the need for ongoing performance monitoring. 4. The IT sector context suggests a need for competitive pricing benchmarks for hosting services.
Value Assessment
Rating: fair
The contract's duration and time-and-materials pricing model may lead to cost overruns if not managed closely. Benchmarking against similar SAP hosting services is crucial to assess if the $73.2M is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the long duration and time-and-materials basis warrant scrutiny to ensure competitive pricing was achieved and maintained throughout the contract life.
Taxpayer Impact: Taxpayer funds are being utilized for IT infrastructure services. Ensuring competitive pricing and efficient service delivery is paramount to maximizing the value of this expenditure.
Public Impact
Citizens rely on government IT systems for various services; contract performance directly impacts service availability. The significant investment in SAP hosting suggests a critical function for the Department of the Interior. Transparency in IT spending is vital for public trust and accountability in government operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (11 years)
- Time and Materials pricing
- Potential for cost creep
Positive Signals
- Full and open competition utilized
- Established vendor
Sector Analysis
This contract falls within the IT services sector, specifically application hosting. Spending benchmarks for similar SAP hosting services are essential to evaluate the $73.2M expenditure for reasonableness and efficiency.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had an opportunity to participate.
Oversight & Accountability
The contract's long duration and time-and-materials nature necessitate robust oversight to ensure performance standards are met and costs remain controlled. Regular reviews and audits are critical for accountability.
Related Government Programs
- Other Computer Related Services
- Department of the Interior Contracting
- Departmental Offices Programs
Risk Flags
- Long contract duration may lead to outdated technology.
- Time and Materials pricing can lead to cost overruns.
- Lack of specific performance metrics in provided data.
- Potential for vendor lock-in over an extended period.
Tags
other-computer-related-services, department-of-the-interior, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Interior awarded $73.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORP. IGF::OT::IGF SAP APPLICATION HOSTING SERVICES
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORP.
Which agency awarded this contract?
Awarding agency: Department of the Interior (Departmental Offices).
What is the total obligated amount?
The obligated amount is $73.2 million.
What is the period of performance?
Start: 2013-05-01. End: 2024-04-29.
What is the estimated total cost per user or per module supported by this SAP hosting service, and how does it compare to industry benchmarks?
Without specific data on user counts or modules, a precise per-unit cost is difficult to establish. However, given the $73.2M total award, agencies should benchmark against similar government or commercial SAP hosting contracts. Factors like service level agreements (SLAs), infrastructure redundancy, and support tiers significantly influence pricing. Comparing these elements is key to assessing value.
What are the key performance indicators (KPIs) for this contract, and how has SAIC performed against them over the contract's life?
Key performance indicators typically include system uptime, response times, security compliance, and incident resolution rates. The Department of the Interior should have established KPIs within the contract's Service Level Agreement (SLA). Regular performance reviews and audits are necessary to track SAIC's adherence to these KPIs and identify any areas of deficiency or excellence.
Given the 11-year duration, what mechanisms are in place to ensure the technology remains current and cost-effective, avoiding obsolescence?
Long-term IT contracts require proactive management. Mechanisms should include regular technology refresh cycles, opportunities for contract modifications to incorporate updated solutions, and performance-based incentives tied to adopting newer, more efficient technologies. The contract should also allow for re-competition or renegotiation if significant technological advancements occur.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: D12PS00316
Offers Received: 4
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Science Applications International Corporation
Address: 11720 PLAZA AMERICA DR, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $90,187,328
Exercised Options: $77,855,792
Current Obligation: $73,235,607
Actual Outlays: $32,102,883
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $67,276
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: IND13PC00025
IDV Type: IDC
Timeline
Start Date: 2013-05-01
Current End Date: 2024-04-29
Potential End Date: 2024-04-29 00:00:00
Last Modified: 2024-04-11
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