IT support contract for Army and Air National Guard awarded to Empower AI, Inc. for nearly $30 million

Contract Overview

Contract Amount: $29,989,208 ($30.0M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of the Interior

Start Date: 2017-03-24

End Date: 2018-09-25

Contract Duration: 550 days

Daily Burn Rate: $54.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CT::IGF INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE ARMY NATIONAL GUARD (ARNG) AND AIR NATIONAL GUARD (ANG)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $30.0 million to EMPOWER AI, INC. for work described as: IGF::CT::IGF INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE ARMY NATIONAL GUARD (ARNG) AND AIR NATIONAL GUARD (ANG) Key points: 1. The contract's value of nearly $30 million over its period of performance suggests a significant investment in IT infrastructure. 2. Awarded through full and open competition, this contract likely benefited from a competitive bidding process. 3. The Time and Materials pricing structure introduces potential cost variability, requiring close monitoring. 4. The contract's duration of 550 days indicates a medium-term engagement for IT support services. 5. The specific North American Industry Classification System (NAICS) code 334111 points to electronic computer manufacturing, which may be a proxy for the type of IT hardware or services involved. 6. The contract was awarded by the Department of the Interior, suggesting a potential focus on supporting federal agency IT needs beyond direct military operations.

Value Assessment

Rating: fair

Benchmarking the value of this $29.9 million contract requires more granular data on the specific IT services provided. However, the duration of 550 days suggests an average annual spend of approximately $19.9 million, which is substantial for IT support. The Time and Materials (T&M) pricing model, while flexible, can lead to cost overruns if not managed diligently. Without comparable contract data for similar IT support services within the National Guard Bureau or other defense agencies, a precise value-for-money assessment is challenging. The contract's award to Empower AI, Inc. through full and open competition is a positive indicator, suggesting market-driven pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' procurement method, indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple vendors to offer their best pricing and technical solutions. The number of bidders is not specified, but the open competition suggests a robust selection process aimed at achieving the best value for the government. This method is generally preferred for its potential to drive down costs and ensure a wide range of qualified contractors can participate.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a level playing field for contractors, which can lead to more competitive pricing and a wider selection of innovative solutions. This process helps ensure that government funds are used efficiently by leveraging market forces to obtain goods and services at optimal costs.

Public Impact

The primary beneficiaries are the Army National Guard (ARNG) and Air National Guard (ANG), who receive essential IT support services. The services delivered likely encompass a range of IT functions critical for the operational readiness and administrative efficiency of these military branches. The geographic impact is likely concentrated where ARNG and ANG units are stationed, potentially across various states and territories. Workforce implications may include the direct employment of IT professionals by Empower AI, Inc. and potential impacts on existing government IT personnel through collaboration or task reallocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure can lead to cost escalation if not closely monitored and managed, potentially exceeding initial budget expectations.
Lack of specific performance metrics or Service Level Agreements (SLAs) in the provided data makes it difficult to assess the quality and effectiveness of the IT support delivered.
The NAICS code 334111 (Electronic Computer Manufacturing) seems somewhat misaligned with typical IT support services, raising questions about the precise nature of the contract's scope or the classification accuracy.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive pricing environment and a thorough vetting of potential contractors.
The contract is managed by the Department of the Interior, suggesting adherence to established federal procurement and oversight standards.
Empower AI, Inc. is the awardee, implying they met the government's requirements and were deemed capable of delivering the necessary IT support.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT support services. The IT services market is vast and highly competitive, encompassing hardware, software, and services. Federal IT spending is a significant portion of the overall federal budget, with agencies constantly seeking to modernize infrastructure and enhance cybersecurity. Contracts like this are crucial for maintaining the operational capabilities of military branches. Comparable spending benchmarks would typically involve analyzing IT support contracts awarded to other defense or federal agencies of similar size and scope.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The focus on full and open competition suggests that large businesses were likely the primary participants and awardees. This contract does not appear to directly contribute to the small business ecosystem through set-aside provisions.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting officer and relevant program managers within the Department of the Interior and potentially the National Guard Bureau. Accountability measures are usually embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

National Guard Bureau IT Modernization Programs
Department of Defense IT Services Contracts
Federal Civilian Agency IT Support
Information Technology Infrastructure Modernization
Cybersecurity Support Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Ambiguity in NAICS code classification relative to typical IT support services.
Lack of specific performance metrics in provided data hinders quality assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $30.0 million to EMPOWER AI, INC.. IGF::CT::IGF INFORMATION TECHNOLOGY (IT) SUPPORT FOR THE ARMY NATIONAL GUARD (ARNG) AND AIR NATIONAL GUARD (ANG)

Who is the contractor on this award?

The obligated recipient is EMPOWER AI, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.0 million.

What is the period of performance?

Start: 2017-03-24. End: 2018-09-25.

What specific IT support services were provided under this contract, and how do they align with the NAICS code 334111?

The NAICS code 334111, 'Electronic Computer Manufacturing,' appears to be a potential misclassification or an indicator of a very specific niche within IT support, possibly involving the manufacturing or integration of specialized computer hardware for the National Guard. Typically, IT support services fall under codes like 541512 (Computer Systems Design Services) or 541519 (Other Computer Related Services). Without further details on the contract's Statement of Work (SOW), it's difficult to ascertain the exact services. It's possible the contract involved the procurement, configuration, and deployment of computer systems, or specialized hardware maintenance, which could loosely tie to manufacturing. However, standard IT support usually encompasses help desk, network administration, software maintenance, and cybersecurity, which are not directly represented by this manufacturing code. This discrepancy warrants further investigation into the contract's true scope and the rationale behind the NAICS code selection.

How does the Time and Materials (T&M) pricing structure for this contract compare to industry standards for similar IT support services?

Time and Materials (T&M) contracts are common for IT support services, especially when the scope of work is not clearly defined or is expected to evolve. They offer flexibility but carry inherent risks of cost overruns if not managed diligently. For IT support, T&M pricing typically involves hourly rates for labor and markups on materials. Industry standards vary significantly based on the skill level of the IT personnel, geographic location, and the complexity of the support required. Benchmarking requires comparing the specific hourly rates and material markups in this contract against prevailing market rates for comparable roles (e.g., network engineers, system administrators, help desk technicians) in the relevant labor market. Without access to the specific rates negotiated in this contract, a precise comparison is difficult. However, federal agencies often negotiate rates that are competitive yet aim to achieve value, and oversight is crucial to ensure that hours billed and materials used are reasonable and necessary for the services performed.

What was the total number of bids received for this contract, and how does this number influence the perceived level of competition?

The provided data does not specify the total number of bids received for this contract, only that it was awarded under 'FULL AND OPEN COMPETITION.' While 'full and open competition' mandates that all responsible sources are allowed to submit offers, it does not guarantee a high number of bidders. A robust competition typically involves multiple qualified bidders vying for the contract. A low number of bids, even under full and open competition, could indicate market limitations, high barriers to entry, or insufficient outreach. Conversely, a large number of bids generally suggests strong market interest and a competitive landscape, which can lead to better pricing and innovation for the government. Without the specific bid count, it's challenging to definitively assess the intensity of the competition and its impact on price discovery.

What is Empower AI, Inc.'s track record with federal IT support contracts, particularly those for defense or national security agencies?

Empower AI, Inc. (formerly known as Empowered Staffing) has a history of providing IT and professional services to various federal agencies. While specific details on their track record for IT support contracts with the Army National Guard or Air National Guard are not explicitly detailed in the provided data, their past performance in the federal sector would be a key factor in their selection for this contract. Federal agencies typically conduct thorough past performance reviews as part of the source selection process. This involves evaluating a contractor's history of meeting contract requirements, managing schedules, controlling costs, and overall customer satisfaction on previous, similar contracts. A positive past performance record with other defense or national security entities would indicate a higher likelihood of successful performance on this contract.

How does the $29.9 million contract value compare to historical spending on similar IT support services for the Army and Air National Guard?

To assess how the $29.9 million contract value compares to historical spending, one would need to analyze previous IT support contracts awarded to the Army National Guard (ARNG) and Air National Guard (ANG) for similar services. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for contracts with comparable scopes of work, durations, and awardees within the relevant timeframes. Factors such as inflation, technological advancements, and evolving mission requirements can influence year-over-year spending. If this contract represents a significant increase or decrease compared to prior similar engagements, it could signal changes in IT needs, budget allocations, or procurement strategies. Without this comparative historical data, it's difficult to definitively state whether $29.9 million is high, low, or average for this type of support.

What are the primary risks associated with this Time and Materials contract, and what mitigation strategies are likely in place?

The primary risk associated with Time and Materials (T&M) contracts is cost escalation, as the government pays for the actual time and materials expended by the contractor, which can lead to budget overruns if not carefully managed. Other risks include potential inefficiencies by the contractor (as they are paid for time spent) and difficulties in defining a fixed scope of work upfront. Mitigation strategies typically employed by federal agencies include: establishing labor hour ceilings, setting material cost ceilings, requiring detailed reporting of hours and materials used, implementing robust oversight and surveillance by government personnel to ensure work is necessary and performed efficiently, and defining clear performance standards and deliverables. The contracting officer's role is critical in monitoring expenditures and ensuring compliance with the contract terms to control costs and ensure value.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: HIG Capital Management, Inc.

Address: 11730 PLAZA AMERICA DR STE 400, RESTON, VA, 20190

Business Categories: Category Business, Minority Owned Business, Not Designated a Small Business, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $32,445,227

Exercised Options: $32,445,227

Current Obligation: $29,989,208

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $522,315

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ07D0004

IDV Type: IDC

Timeline