Interior Department's $23.3M IT services contract awarded to NTT DATA, raising questions about competition and value

Contract Overview

Contract Amount: $23,344,751 ($23.3M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of the Interior

Start Date: 2005-09-30

End Date: 2008-02-28

Contract Duration: 881 days

Daily Burn Rate: $26.5K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: NEW ORDER

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of the Interior obligated $23.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: NEW ORDER Key points: 1. The contract's value of $23.3 million over its period of performance suggests a significant investment in IT infrastructure. 2. Awarded as a non-competitive delivery order, the lack of open competition warrants scrutiny regarding potential price inflation. 3. The Time and Materials pricing structure can pose risks if not closely managed, potentially leading to cost overruns. 4. The contract duration of 881 days indicates a need for sustained IT support, but the non-competitive nature limits flexibility. 5. The specific NAICS code 518210 points to services related to computing infrastructure and data processing, a critical area for government operations. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small business growth.

Value Assessment

Rating: questionable

Benchmarking the value of this $23.3 million contract is challenging without comparable non-competitive awards for similar IT services. The Time and Materials (T&M) pricing model, while flexible, can lead to higher costs than fixed-price contracts if not meticulously managed and monitored. Without detailed cost breakdowns or comparisons to market rates for similar computing infrastructure and data processing services, it is difficult to definitively assess if the government received excellent value for its investment. The lack of competition further complicates a robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that it was not subjected to a full and open competition. This typically means that only one source was solicited or that the circumstances justified a sole-source award. The limited competition raises concerns about whether the government secured the most favorable pricing and terms possible, as a lack of bidders can reduce the incentive for the contractor to offer competitive rates.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government's ability to negotiate the best possible price is diminished when only one provider is considered.

Public Impact

Federal agencies, specifically the Department of the Interior, benefit from the provision of essential computing infrastructure and data processing services. The contract supports the ongoing operations and technological needs of the Departmental Offices within the Interior. The services delivered are critical for maintaining the digital backbone of the agency, enabling various governmental functions. The geographic impact is primarily within Maryland, where the contractor is located, but the services support a national agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Time and Materials contract type carries inherent risk of cost escalation without strict oversight.
Lack of transparency in the justification for a sole-source award.
Limited opportunity for small businesses to participate in this significant IT services contract.

Positive Signals

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC is an established entity providing federal IT services.
The contract addresses a clear need for computing infrastructure and data processing services.
The contract duration suggests a stable, long-term need for these services.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. The market for these services is highly competitive, with numerous large and small providers offering a wide range of solutions. Government spending in this area is substantial, driven by the increasing reliance on digital infrastructure for operations and data management. Comparable spending benchmarks would typically involve analyzing other large IT service contracts awarded to major federal IT vendors, particularly those for infrastructure support and cloud services.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. This means that opportunities for small businesses to directly participate in this significant IT services contract are limited. While NTT DATA may engage small businesses as subcontractors, the primary award does not directly foster the small business ecosystem within this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's contracting and program management offices. Accountability measures would be tied to the performance standards outlined in the delivery order and the Time and Materials clauses. Transparency is limited due to the non-competitive nature of the award; justifications for sole-source awards are usually made public but may not detail all aspects of the negotiation. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Infrastructure Services
Cloud Computing Services
Data Center Operations
Managed IT Services
Federal IT Modernization Programs

Risk Flags

Non-competitive award
Time and Materials pricing
Lack of transparency in justification
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $23.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. NEW ORDER

Who is the contractor on this award?

The obligated recipient is NTT DATA SERVICES FEDERAL 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 $23.3 million.

What is the period of performance?

Start: 2005-09-30. End: 2008-02-28.

What is the specific justification for awarding this contract on a non-competitive basis?

The provided data indicates this was a 'NON-COMPETITIVE DELIVERY ORDER.' Without further documentation, the specific justification remains unknown. Typically, non-competitive awards are made under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can satisfy the agency's needs, in cases of urgent and compelling need, or when a previous contract was terminated for default and the agency needs to re-solicit. Understanding the precise reason is crucial for assessing the necessity of bypassing the competitive bidding process and its potential impact on cost and value.

How does the Time and Materials (T&M) pricing structure compare to fixed-price options for similar IT services?

Time and Materials (T&M) contracts are generally considered less desirable than fixed-price contracts for IT services due to their inherent risk of cost escalation. With T&M, the government pays for the direct labor hours at specified hourly rates and for the actual cost of materials. This can lead to unpredictable final costs if project scope creeps or if labor hours are not efficiently managed. Fixed-price contracts, conversely, offer greater cost certainty as the contractor agrees to a set price regardless of the actual effort expended. For IT services where scope can be well-defined, fixed-price contracts often provide better value and predictability for the government.

What is NTT DATA's track record with the Department of the Interior and other federal agencies for similar IT services?

NTT DATA SERVICES FEDERAL GOVERNMENT, LLC has a significant presence in the federal IT contracting space. While specific details of their track record with the Department of the Interior for this particular type of service are not provided in the data, their general experience suggests they are capable of delivering complex IT solutions. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on similar contracts with DOI and other agencies to gauge their reliability, efficiency, and cost-effectiveness.

What are the potential risks associated with a 2.5-year IT services contract awarded non-competitively?

The primary risks associated with a non-competitively awarded, 2.5-year IT services contract include: 1) Inflated pricing: Without competition, the contractor may not be incentivized to offer the lowest possible price. 2) Suboptimal service quality: The lack of competitive pressure could potentially lead to complacency in service delivery. 3) Lack of innovation: A sole-source provider might be less inclined to introduce innovative solutions compared to a competitive environment. 4) Vendor lock-in: The agency becomes dependent on a single provider, making future transitions potentially more complex and costly. 5) Difficulty in performance management: If the T&M structure is not rigorously managed, costs can spiral, and performance may not meet expectations.

How does this contract's value compare to the average spending on IT infrastructure services by the Department of the Interior?

The provided data shows a single delivery order valued at $23.3 million. To compare this to the Department of the Interior's average spending on IT infrastructure services, one would need access to historical spending data for the agency across multiple fiscal years and contract vehicles. This $23.3 million figure represents a specific order, not necessarily the total annual IT infrastructure budget for DOI. A meaningful comparison would involve aggregating all IT infrastructure spending by DOI over several years and calculating an average, then assessing where this $23.3 million order fits within that broader spending pattern.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Parent Company: Nippon Telegraph and Telephone Corporation (UEI: 690626718)

Address: 13880 DULLES CORNER LN STE 200, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $23,344,751

Exercised Options: $23,344,751

Current Obligation: $23,344,751

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00F0049M

IDV Type: FSS

Timeline