Interior's $82.6M IT contract to Empower AI, Inc. shows fair value with 3 bidders

Contract Overview

Contract Amount: $82,615,447 ($82.6M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of the Interior

Start Date: 2001-08-15

End Date: 2008-12-31

Contract Duration: 2,695 days

Daily Burn Rate: $30.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CUSTOM COMPUTER SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $82.6 million to EMPOWER AI, INC. for work described as: CUSTOM COMPUTER SERVICES Key points: 1. Contract value appears reasonable given the scope of custom computer programming services. 2. Competition was moderate with three bidders, suggesting some price discovery. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance period spans nearly 8 years, indicating a long-term need. 5. This contract falls within the IT services sector, specifically custom programming. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The total contract value of $82.6 million over approximately 8 years suggests an average annual spend of around $10.3 million. Benchmarking this against similar custom computer programming contracts requires detailed analysis of scope and complexity. However, with three bidders, the pricing mechanism likely incorporated competitive pressures. The firm-fixed-price structure is generally favorable for the government in managing costs for well-defined services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating it was competed under a broader contract vehicle. Three bidders participated in this specific competition. The presence of multiple bidders suggests a degree of market interest and allows for some level of price comparison, though the exact nature of the competition (e.g., best value vs. lowest price technically acceptable) is not detailed here.

Taxpayer Impact: A competitive award with multiple bidders generally benefits taxpayers by fostering price discipline and encouraging contractors to offer competitive rates to secure the work.

Public Impact

The Department of the Interior benefits from custom computer programming services to support its operations. This contract likely supports various internal IT systems and application development needs. The geographic impact is primarily within the Department of the Interior's operational areas. Workforce implications may include the need for skilled IT professionals within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to long-term contract duration.
Risk of scope creep if requirements are not clearly defined and managed.
Dependence on a single contractor for critical IT services.

Positive Signals

Firm-fixed-price contract mitigates financial risk for the government.
Competitive award process suggests potential for reasonable pricing.
Long performance period indicates a stable, ongoing need met by this contract.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under the North American Industry Classification System (NAICS) code 541511 for Custom Computer Programming Services. This is a significant segment of federal IT spending, supporting agencies' needs for software development, system integration, and IT consulting. The market for these services is competitive, with numerous firms capable of providing such expertise.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false. This indicates that opportunities for small businesses to directly perform this work were not prioritized through a set-aside mechanism. However, the prime contractor, Empower AI, Inc., may engage small businesses as subcontractors, depending on their subcontracting plans and the nature of the work performed.

Oversight & Accountability

As a delivery order under a larger contract vehicle, oversight would typically be managed by the contracting officer and program managers within the Department of the Interior. Accountability is established through the firm-fixed-price contract terms and performance requirements. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available.

Related Government Programs

Custom Computer Programming Services
IT Services
Software Development
Department of the Interior IT Contracts

Risk Flags

Long-term contract duration may increase risk of vendor lock-in.
Potential for scope creep if requirements are not tightly managed.
Dependence on a single contractor for critical IT services.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $82.6 million to EMPOWER AI, INC.. CUSTOM COMPUTER SERVICES

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 $82.6 million.

What is the period of performance?

Start: 2001-08-15. End: 2008-12-31.

What is the track record of Empower AI, Inc. with federal contracts, particularly in custom computer programming?

Empower AI, Inc. has a history of performing federal contracts. Analyzing their specific performance on past custom computer programming services contracts would involve reviewing past performance evaluations, any contract disputes or terminations, and the overall value and duration of their previous awards. A deeper dive into their contract history within the Department of the Interior and other agencies would reveal their experience level and reliability in delivering similar IT solutions. Without specific performance data, it's assumed they met the requirements for this contract based on the award.

How does the $82.6 million contract value compare to similar custom computer programming contracts awarded by the Department of the Interior or other agencies?

The $82.6 million contract value over approximately 8 years represents an average annual spend of roughly $10.3 million. To benchmark this effectively, one would need to compare it against contracts for custom computer programming services of similar scope, complexity, and duration awarded by agencies of comparable size and IT needs. Factors such as the specific technologies involved, the level of customization required, and the geographic distribution of services would influence comparability. A preliminary assessment suggests this is a substantial contract, indicative of significant IT support needs.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential for scope creep if requirements are not precisely defined and managed, vendor lock-in due to the long-term nature of the contract, and the possibility of performance issues if the contractor fails to deliver as expected. Mitigation strategies are inherent in the contract structure: the firm-fixed-price nature caps the government's financial exposure, requiring the contractor to absorb cost overruns. The competitive award process aims to select a capable vendor. Ongoing oversight by the Department of the Interior's contracting officers and program managers is crucial for monitoring performance and managing scope.

How effective has the Department of the Interior been in leveraging IT contracts like this to achieve its mission objectives?

The effectiveness of this contract in achieving the Department of the Interior's mission objectives hinges on the successful delivery of custom computer programming services that enhance operational efficiency, data management, or public service delivery. Without specific performance metrics tied to mission outcomes, a definitive assessment is challenging. However, the long duration and substantial value suggest that these services are considered critical to supporting the Department's functions. Continued monitoring and evaluation of the contractor's performance against defined objectives are necessary to gauge effectiveness.

What are the historical spending patterns for custom computer programming services within the Department of the Interior?

Historical spending patterns for custom computer programming services within the Department of the Interior would reveal trends in contract values, durations, and the types of services procured. Analyzing past data would show whether spending in this category has been consistent, increasing, or decreasing, and which contractors have been awarded significant portions of this work. Understanding these patterns provides context for the current $82.6 million award, indicating whether it aligns with historical procurement strategies or represents a shift in investment. This analysis helps in forecasting future IT needs and budget allocations.

Industry Classification

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

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: NCI, Inc. (UEI: 195313866)

Address: 8260 GREENSBORO DR # 400, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $82,615,447

Exercised Options: $82,615,447

Current Obligation: $82,615,447

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4014G

IDV Type: FSS

Timeline