Interior Department awards $57.9M GIS Cloud Hosting contract to Trace3 Government, LLC

Contract Overview

Contract Amount: $57,912,707 ($57.9M)

Contractor: Trace3 Government, LLC

Awarding Agency: Department of the Interior

Start Date: 2015-05-28

End Date: 2025-04-26

Contract Duration: 3,621 days

Daily Burn Rate: $16.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF GEOSPATIAL INFORMATION SYSTEMS (GIS) CLOUD HOSTING SERVICES

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80209

State: Colorado Government Spending

Plain-Language Summary

Department of the Interior obligated $57.9 million to TRACE3 GOVERNMENT, LLC for work described as: IGF::OT::IGF GEOSPATIAL INFORMATION SYSTEMS (GIS) CLOUD HOSTING SERVICES Key points: 1. Contract value represents a significant investment in geospatial data infrastructure. 2. Trace3 Government, LLC, a key player in IT solutions for the public sector. 3. Potential for cost efficiencies through cloud-based solutions compared to on-premise. 4. Contract duration extends over a decade, indicating long-term strategic importance. 5. Performance metrics and service level agreements will be critical for value realization. 6. Geographic impact is national, supporting DOI's diverse land management missions.

Value Assessment

Rating: good

The contract's total value of $57.9 million over its nearly 10-year period suggests a substantial investment in cloud hosting for GIS. Benchmarking this against similar large-scale cloud service contracts for government agencies indicates a competitive pricing structure, especially considering the specialized nature of GIS data and processing requirements. The Time and Materials (T&M) pricing model, while offering flexibility, necessitates close monitoring to ensure costs remain aligned with the value delivered and do not escalate beyond initial projections. The absence of specific performance data makes a definitive value assessment challenging, but the duration implies a perceived value by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a reasonably competitive environment for these specialized cloud hosting services. A competitive process generally leads to better price discovery and potentially more favorable terms for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a marketplace where vendors vie for the best price and service. This approach helps prevent overpayment and encourages innovation.

Public Impact

The Department of the Interior benefits from enhanced capabilities for managing and analyzing vast amounts of geospatial data. Federal agencies and land managers will have access to improved tools for resource management, environmental monitoring, and disaster response. The contract supports the modernization of IT infrastructure, enabling more efficient operations across DOI's bureaus. Workforce implications include potential upskilling for IT personnel managing cloud environments and GIS specialists utilizing advanced platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure carries inherent risk of cost overruns if not meticulously managed and monitored.
Dependence on a single vendor for critical cloud hosting services could pose a risk if the vendor experiences service disruptions or financial instability.
Ensuring robust data security and compliance with federal regulations within the cloud environment requires continuous vigilance and investment.

Positive Signals

Awarding under full and open competition suggests a competitive process that likely secured favorable pricing and terms.
The long contract duration (nearly 10 years) indicates a strategic alignment with the agency's long-term IT modernization goals.
Trace3 Government, LLC's experience in government contracting suggests a familiarity with federal requirements and operational environments.
The use of cloud hosting services can lead to scalability and flexibility, allowing the DOI to adapt to changing data needs.

Sector Analysis

The Information Technology sector, specifically cloud computing and IT services, is a rapidly growing area for federal spending. Agencies are increasingly migrating services to the cloud to leverage scalability, cost-efficiency, and advanced capabilities. This contract fits within the broader trend of federal agencies modernizing their IT infrastructure. Comparable spending benchmarks for large-scale cloud hosting services for government entities often range in the tens to hundreds of millions of dollars annually, depending on the scope and complexity of services required.

Small Business Impact

This contract was not specifically set aside for small businesses, and the prime contractor, Trace3 Government, LLC, is not identified as a small business. Therefore, there are no direct small business set-aside implications. However, the contract may offer subcontracting opportunities for small businesses within the IT services ecosystem, depending on Trace3's subcontracting plan and the specific needs for specialized services. The extent of small business participation will be a key factor in assessing the broader economic impact.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Interior's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing the T&M aspects of the award. The contract's duration and value suggest it may fall under the purview of the DOI's Office of Inspector General (OIG) for audits and investigations, particularly concerning financial accountability and program effectiveness. Transparency will be maintained through contract reporting requirements and potentially public contract databases.

Related Government Programs

Geospatial Information Systems (GIS) Services
Cloud Computing Services
IT Infrastructure Modernization
Department of the Interior IT Contracts
Data Hosting and Management

Risk Flags

Potential for cost overruns due to T&M pricing model.
Vendor lock-in and dependence on a single provider.
Ensuring data security and compliance in a cloud environment.
Performance variability and adherence to SLAs.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $57.9 million to TRACE3 GOVERNMENT, LLC. IGF::OT::IGF GEOSPATIAL INFORMATION SYSTEMS (GIS) CLOUD HOSTING SERVICES

Who is the contractor on this award?

The obligated recipient is TRACE3 GOVERNMENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $57.9 million.

What is the period of performance?

Start: 2015-05-28. End: 2025-04-26.

What is Trace3 Government, LLC's track record with federal contracts, particularly for cloud hosting and IT services?

Trace3 Government, LLC has a history of securing federal contracts, primarily within the IT services and solutions domain. Their experience often involves providing hardware, software, and professional services to various government agencies. While specific details on their past performance for large-scale, long-term cloud hosting contracts of this magnitude are not immediately available in this data snippet, their presence as a prime contractor suggests they possess the necessary clearances, infrastructure, and expertise to manage complex government IT requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues, would provide a more comprehensive understanding of their reliability and capability in delivering similar services.

How does the awarded price compare to market rates for similar GIS cloud hosting services?

The total contract value of $57.9 million over nearly 10 years equates to an average annual cost of approximately $5.8 million. Benchmarking this against market rates for enterprise-level cloud hosting, especially for specialized applications like GIS which require significant data storage, processing power, and potentially high bandwidth, is complex. Factors such as the specific service level agreements (SLAs), security requirements, geographic distribution of data centers, and the level of managed services included significantly influence pricing. Given the full and open competition with 5 bids, it suggests the pricing is likely competitive within the government contracting landscape for such specialized services. However, without detailed service specifications and a direct comparison to commercial equivalents with identical features, a precise market rate comparison is difficult.

What are the primary risks associated with this Time and Materials (T&M) contract structure for cloud hosting?

The primary risk with a Time and Materials (T&M) contract for cloud hosting is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours and associated material costs. If project scope creeps, inefficiencies arise, or the contractor's labor rates are high, the total cost can exceed initial estimates or agency budgets. For cloud hosting, this could manifest as unexpected increases in data transfer fees, excessive support hours, or the need for additional resources not initially foreseen. Effective oversight, detailed tracking of hours and costs, and clear definition of 'materials' are crucial to mitigate these risks and ensure the government receives good value.

How will the performance of Trace3 Government, LLC be measured and ensured under this contract?

Performance measurement under this contract will be governed by the established Service Level Agreements (SLAs) and performance standards outlined in the contract document. These SLAs typically define key performance indicators (KPIs) related to system availability, uptime, response times for support, data integrity, and security compliance. The Department of the Interior's contracting officer's representative (COR) or designated personnel will be responsible for monitoring these KPIs, reviewing performance reports submitted by Trace3 Government, LLC, and conducting regular performance reviews. Failure to meet agreed-upon performance standards could result in contractual remedies, including potential financial penalties or termination of the contract.

What is the historical spending trend for GIS cloud hosting services within the Department of the Interior?

Historical spending data for GIS cloud hosting services within the Department of the Interior is not provided in this data snippet. However, the trend across federal agencies, including the DOI, has been a significant shift towards cloud-based solutions for IT infrastructure and specialized services like GIS. This move is driven by the desire for greater scalability, cost-efficiency, and access to advanced analytical tools. Prior to this contract, spending likely involved a mix of on-premise infrastructure, data center services, and potentially smaller, more fragmented cloud service agreements. This $57.9 million award represents a consolidation and modernization effort, indicating a strategic investment rather than a continuation of previous spending patterns.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Zivaro, Inc.

Address: 990 S BDWY STE 300, DENVER, CO, 80209

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $61,200,887

Exercised Options: $58,818,364

Current Obligation: $57,912,707

Actual Outlays: $51,387,310

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: IND13PC00023

IDV Type: IDC

Timeline