Interior's $19.5M geospatial contract to ESRI shows long-term reliance on a single vendor

Contract Overview

Contract Amount: $19,485,233 ($19.5M)

Contractor: Environmental Systems Research Institute, Inc.

Awarding Agency: Department of the Interior

Start Date: 2004-05-01

End Date: 2010-03-31

Contract Duration: 2,160 days

Daily Burn Rate: $9.0K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: ESRI NILS/GEOCOMMUN

Place of Performance

Location: REDLANDS, SAN BERNARDINO County, CALIFORNIA, 92373

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $19.5 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. for work described as: ESRI NILS/GEOCOMMUN Key points: 1. The contract's duration of over 8 years suggests a sustained need for these services. 2. A non-competitive award indicates potential limitations in market exploration and price discovery. 3. The use of Time and Materials pricing can pose risks if not closely managed. 4. This spending falls within the 'Other Computer Related Services' category, a broad area. 5. The contract was awarded to a single, established vendor, potentially limiting broader industry engagement. 6. Geographic focus on California might indicate specific regional needs or project sites.

Value Assessment

Rating: fair

The total award of $19.5 million over nearly 6 years for geospatial data services is substantial. Benchmarking this against similar, competitively awarded contracts for comparable services is difficult without more detailed scope information. However, the non-competitive nature and Time and Materials pricing structure raise concerns about achieving optimal value for money compared to a more competitive, fixed-price environment. The long duration also implies a significant investment that warrants close scrutiny of ongoing performance and cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that the agency did not solicit offers from multiple potential contractors. This approach is typically used when a specific vendor possesses unique capabilities or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from a range of proposals and pricing, potentially leading to higher costs than might be achieved through a competitive process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's harder to ensure the government secured the best possible price for these essential geospatial services.

Public Impact

The Bureau of Land Management benefits from access to critical geospatial data and software. Services delivered likely support land management, resource planning, and environmental monitoring. The geographic impact is primarily focused on California, suggesting specific project needs. Workforce implications may involve internal staff utilizing ESRI software and potentially external support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs.
Time and Materials contract type can lead to cost overruns if not managed stringently.
Long contract duration may indicate a lack of market research or vendor lock-in.
Focus on a single vendor may stifle innovation from other market participants.

Positive Signals

ESRI is a leading provider of geospatial software, suggesting access to high-quality tools.
The contract duration implies a stable, ongoing need for these critical services.
Awarding to a known entity may ensure continuity of operations for essential functions.

Sector Analysis

The geospatial software and services market is a significant segment within the broader IT sector. Companies like ESRI dominate this space with comprehensive platforms for data management, analysis, and visualization. Federal agencies rely heavily on geospatial capabilities for a wide range of missions, including land management, infrastructure planning, and emergency response. Spending in this area can range from software licenses to complex data integration and analysis services, often involving long-term partnerships due to the specialized nature of the technology.

Small Business Impact

This contract was awarded directly to ESRI, a large established company, and there is no indication of a small business set-aside. Given the nature of the services (specialized geospatial software and support), it is unlikely that small businesses would be primary awardees for the entire contract scope. However, opportunities for subcontracting to small businesses may exist, depending on ESRI's approach to fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would fall under the Bureau of Land Management (BLM) within the Department of the Interior. The agency is responsible for monitoring performance, approving expenditures, and ensuring compliance with contract terms. As a delivery order under a larger contract vehicle, specific oversight mechanisms would be detailed in the base contract. Transparency is generally facilitated through contract databases, but detailed performance metrics and cost justifications for non-competitive awards are often internal.

Related Government Programs

Geospatial Information System (GIS) Services
IT Professional Services
Software Licenses and Maintenance
Department of the Interior IT Spending
Bureau of Land Management Operations

Risk Flags

Non-competitive award
Time and Materials pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $19.5 million to ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC.. ESRI NILS/GEOCOMMUN

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $19.5 million.

What is the period of performance?

Start: 2004-05-01. End: 2010-03-31.

What specific geospatial capabilities does ESRI provide under this contract, and how do they align with the Bureau of Land Management's mission?

This contract, awarded under NAICS code 541519 (Other Computer Related Services), likely covers a range of ESRI's core offerings. These typically include software licenses for ArcGIS (desktop, server, online), geospatial data management tools, analytical capabilities for spatial modeling, and potentially professional services for implementation, training, and support. For the Bureau of Land Management (BLM), these capabilities are crucial for managing vast public lands. They enable tasks such as mapping land boundaries, analyzing resource distribution (minerals, timber, wildlife habitats), planning infrastructure projects (roads, pipelines), monitoring environmental conditions, and responding to emergencies like wildfires. The long duration suggests these tools are integral to the BLM's daily operations and long-term strategic planning for land stewardship.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar geospatial services, and what are the associated risks?

Time and Materials (T&M) contracts compensate contractors for the direct labor hours at specified hourly rates and for the actual cost of materials. This contrasts with fixed-price contracts, where the total price is set regardless of the effort expended, or cost-plus contracts, which reimburse costs plus a fee. For complex, evolving IT services like geospatial solutions, T&M can offer flexibility when the scope is not fully defined at the outset. However, it carries significant risk for the government, as costs can escalate if not closely monitored. Unlike fixed-price contracts, there's less incentive for the contractor to control costs efficiently. Effective oversight, including detailed tracking of labor hours and material usage, is paramount to mitigate overspending and ensure fair value.

What is the typical duration and value of geospatial contracts awarded competitively, and how does this contract compare?

Geospatial contracts can vary widely in duration and value depending on the scope and agency needs. Competitively awarded contracts for enterprise-level geospatial software and services can often range from 3 to 5 years, with potential for option periods extending the total duration. Values can span from hundreds of thousands to tens of millions of dollars. This contract, with a total award of approximately $19.5 million and a duration of nearly 6 years (May 2004 - March 2010), falls within the higher end of typical values for a single vendor engagement. Its non-competitive nature and extended duration, however, make direct comparison to competitively bid contracts challenging, as competitive processes generally aim to secure better pricing and broader solutions through market forces.

What are the potential implications of a sole-source award for innovation and market competition in the geospatial sector?

Sole-source or non-competitive awards, like this one to ESRI, can have mixed implications for innovation and market competition. On one hand, they ensure the government receives services from a highly specialized or incumbent provider, potentially maintaining operational continuity. However, they significantly limit opportunities for other companies, including innovative startups or niche providers, to compete for government business. This can stifle broader market innovation by reducing the incentive for vendors to differentiate themselves through novel solutions or competitive pricing. Over-reliance on sole-source contracts can lead to vendor lock-in, where agencies become dependent on a single provider, making it difficult and costly to switch even if better alternatives emerge.

How has federal spending on 'Other Computer Related Services' (NAICS 541519) evolved since this contract was awarded, and what trends are evident?

Federal spending on 'Other Computer Related Services' (NAICS 541519) has seen substantial growth since the period of this contract (2004-2010). Post-2010, there has been a marked increase in federal IT spending overall, driven by modernization efforts, cloud adoption, cybersecurity needs, and data analytics. While specific data for NAICS 541519 is aggregated, the broader trend indicates a growing demand for specialized IT services beyond standard software development or infrastructure management. This includes areas like data science, AI/ML implementation, advanced analytics, and niche IT consulting, areas where geospatial services also increasingly intersect. Agencies are often seeking more agile, cloud-native solutions, and competitive pressures have intensified, pushing vendors to offer more integrated and value-driven services.

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: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Address: 380 NEW YORK ST, REDLANDS, CA, 92373

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,284,501

Exercised Options: $20,183,333

Current Obligation: $19,485,233

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5086H

IDV Type: FSS

Timeline