NexGen Technologies Inc. awarded $31.8M for IT services, facing limited competition

Contract Overview

Contract Amount: $31,880,705 ($31.9M)

Contractor: Nexgen Technologies Inc.

Awarding Agency: Department of the Interior

Start Date: 2016-10-01

End Date: 2021-04-30

Contract Duration: 1,672 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF AFMSS 2 O&M, HELP DESK SUPPORT, DEVELOPMENT, MODIFICATIONS, AND ENHANCEMENTS

Place of Performance

Location: DENVER, JEFFERSON County, COLORADO, 80225

State: Colorado Government Spending

Plain-Language Summary

Department of the Interior obligated $31.9 million to NEXGEN TECHNOLOGIES INC. for work described as: IGF::OT::IGF AFMSS 2 O&M, HELP DESK SUPPORT, DEVELOPMENT, MODIFICATIONS, AND ENHANCEMENTS Key points: 1. Contract value of $31.8M over 5.5 years suggests a moderate annual spend. 2. Limited competition may indicate potential for higher pricing than a fully open market. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Services include custom programming, IT operations, and system enhancements. 5. Contract awarded to a single vendor, raising questions about market responsiveness. 6. Geographic focus on Colorado for service delivery.

Value Assessment

Rating: fair

The contract's total value of $31.8M over 1672 days averages approximately $19,000 per day. Benchmarking this against similar custom computer programming services requires detailed analysis of scope and complexity. Without specific performance metrics or comparable contract data, it's difficult to definitively assess value for money. The fixed-price nature provides cost certainty but could lead to overpayment if contractor efficiency is high.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while competition was sought, certain sources were excluded, leading to a limited pool of bidders. The specific reasons for exclusion are not detailed here. A limited competition environment typically results in fewer bids than full and open competition, potentially impacting price discovery and the government's ability to secure the lowest possible price.

Taxpayer Impact: Limited competition can lead to higher costs for taxpayers as the reduced number of bidders may lessen the downward pressure on pricing. This structure warrants scrutiny to ensure fair market value was obtained.

Public Impact

The Bureau of Land Management benefits from enhanced IT operations and custom programming. Federal employees and contractors will receive IT support and system development. Services are primarily delivered within Colorado. The contract supports IT professionals employed by NexGen Technologies Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential price inflation.
Lack of transparency regarding source exclusion could mask other issues.
Contract duration of over 5 years may not adapt to rapidly changing IT needs.

Positive Signals

Fixed-price contract shifts cost risk to the contractor.
Single award simplifies contract management.
Contractor is responsible for O&M, help desk, development, and enhancements.

Sector Analysis

This contract falls within the Custom Computer Programming Services sector (NAICS 541511), a significant segment of the IT industry focused on developing, modifying, and supporting software and systems. The market is characterized by a wide range of providers, from small specialized firms to large system integrators. Federal spending in this area is substantial, driven by the need for tailored solutions to manage complex government operations and data. Comparable spending benchmarks would typically involve analyzing contract values for similar IT development and support services across various agencies.

Small Business Impact

The contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like NexGen Technologies Inc. were eligible and awarded the contract. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. This suggests that opportunities for small businesses to participate in this specific contract may be limited unless subcontracting is actively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's Bureau of Land Management contracting officers and potentially the agency's Inspector General. The fixed-price contract type provides a degree of cost control. Transparency regarding the 'exclusion of sources' in the competition process would be crucial for assessing accountability. Regular performance reviews and adherence to contract terms are key oversight mechanisms.

Related Government Programs

IT Operations and Support Services
Custom Software Development
IT System Enhancements
Help Desk Services

Risk Flags

Limited competition may lead to higher costs.
Potential for vendor lock-in with a single provider.
Scope definition critical for fixed-price contract success.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $31.9 million to NEXGEN TECHNOLOGIES INC.. IGF::OT::IGF AFMSS 2 O&M, HELP DESK SUPPORT, DEVELOPMENT, MODIFICATIONS, AND ENHANCEMENTS

Who is the contractor on this award?

The obligated recipient is NEXGEN TECHNOLOGIES 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 $31.9 million.

What is the period of performance?

Start: 2016-10-01. End: 2021-04-30.

What is NexGen Technologies Inc.'s track record with federal contracts, particularly within the Department of the Interior?

NexGen Technologies Inc. has a history of federal contracting, with this contract representing a significant award of $31.8M. Further analysis would involve examining their past performance ratings, any prior contracts with the Department of the Interior or Bureau of Land Management, and their overall federal contract portfolio. Understanding their experience with similar IT services, contract types (like Firm Fixed Price), and competition levels would provide context. A review of their contract history could reveal patterns in performance, delivery timeliness, and adherence to budget, which are critical for assessing their reliability as a contractor for this ongoing service.

How does the $31.8M contract value compare to similar custom computer programming services contracts awarded by the federal government?

The $31.8M contract value over approximately 5.5 years places this award in the mid-to-large tier for custom computer programming services. To benchmark effectively, one would compare it against contracts with similar scope, complexity, and duration awarded by agencies like the Department of the Interior or other civilian agencies. Factors such as the specific services (e.g., development, O&M, help desk), the number of bidders, and the contract type (Firm Fixed Price) influence pricing. Without access to a comprehensive database of comparable contracts and their specific details, a precise value-for-money assessment is challenging. However, the annual average spend of roughly $5.8M suggests a substantial, ongoing IT support requirement.

What are the primary risks associated with a 'limited competition' award for IT services?

A primary risk of limited competition is reduced price pressure, potentially leading to higher costs for the government compared to a fully open and competitive process. This can occur because fewer bidders may mean less incentive for contractors to offer their most competitive pricing. Additionally, limited competition might restrict the government's access to the most innovative solutions or best-fit providers if highly capable firms were excluded. It can also signal potential market barriers or issues with the solicitation process itself. For taxpayers, this translates to a higher likelihood of paying more than necessary for the services rendered, diminishing the overall value for money.

How effective is the 'Firm Fixed Price' contract type in managing costs and ensuring performance for custom programming services?

The Firm Fixed Price (FFP) contract type is generally effective in providing cost certainty for the government, as the price is set and not subject to upward adjustment based on the contractor's actual costs. This shifts the risk of cost overruns to the contractor. For custom programming services, FFP can incentivize contractor efficiency and timely delivery. However, it also requires a very well-defined scope of work upfront. If the scope is unclear or changes frequently, it can lead to disputes, change orders, or the contractor building in significant contingency into the price, potentially making it less cost-effective than other contract types like Cost Plus Fixed Fee if scope is highly variable.

What are the implications of awarding this contract to a single vendor for the Bureau of Land Management's IT infrastructure?

Awarding this significant IT services contract to a single vendor, NexGen Technologies Inc., centralizes responsibility for critical functions like O&M, help desk, development, and enhancements. This can lead to efficiencies through specialized knowledge and streamlined communication. However, it also concentrates risk; if the vendor underperforms, experiences financial difficulties, or faces other issues, the Bureau of Land Management's IT operations could be severely disrupted. Reliance on a single vendor may also reduce flexibility and bargaining power in future contract negotiations or limit access to potentially superior alternative solutions that might emerge from a broader market.

What is the historical spending pattern for similar IT services by the Bureau of Land Management or the Department of the Interior?

Analyzing historical spending patterns for similar IT services by the Bureau of Land Management (BLM) and the broader Department of the Interior (DOI) is crucial for context. This $31.8M contract, awarded over 5.5 years, represents a significant investment. Understanding the BLM's typical annual IT budget, the frequency and value of previous contracts for custom programming and IT support, and whether spending has increased or decreased over time would reveal trends. Comparing this contract's value to past expenditures can indicate whether this represents a new initiative, an expansion of existing services, or a continuation of established support levels. It also helps in assessing if the current award aligns with overall agency IT investment strategies.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1490 W 121ST AVE STE 105, WESTMINSTER, CO, 80234

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,880,705

Exercised Options: $31,880,705

Current Obligation: $31,880,705

Actual Outlays: $12,971,573

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: INL15PC00170

IDV Type: IDC

Timeline