Department of Labor's $67.7M custom programming contract awarded to NCS Pearson Inc. shows long-term engagement

Contract Overview

Contract Amount: $67,686,071 ($67.7M)

Contractor: NCS Pearson Inc

Awarding Agency: Department of Labor

Start Date: 2004-09-28

End Date: 2011-06-30

Contract Duration: 2,466 days

Daily Burn Rate: $27.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EFAST I

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20210

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $67.7 million to NCS PEARSON INC for work described as: EFAST I Key points: 1. The contract's duration of over 8 years suggests a sustained need for the services provided. 2. Awarded as 'NOT COMPETED', this indicates a lack of competitive bidding, potentially impacting price. 3. The firm fixed-price contract type offers cost certainty but may limit flexibility for evolving requirements. 4. The absence of small business set-aside flags suggests this contract did not prioritize small business participation. 5. The contract's value of approximately $67.7 million over its term warrants scrutiny for value for money. 6. The specific NAICS code 541511 points to custom computer programming services, a critical area for agency operations.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable data for custom programming services over such an extended period. The total value of $67.7 million spread across more than 8 years averages to roughly $8.5 million annually. This figure needs to be assessed against the scope and complexity of the custom programming delivered. Given the sole-source nature, it's difficult to ascertain if the pricing reflects competitive market rates or if there was an opportunity for cost savings through competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procedure, meaning it was not openly competed. This typically occurs when a specific contractor is deemed the only source capable of fulfilling the requirement, often due to proprietary technology, existing system integration, or urgent needs. The lack of competition means that potential cost savings that could arise from multiple bidders vying for the contract were not realized. This approach can lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. Without a competitive process, there is less assurance that the government secured the best possible price for the custom programming services.

Public Impact

The Department of Labor benefits from custom computer programming services essential for its administrative and management functions. These services likely support internal IT systems, data management, and operational efficiency within the agency. The contract's impact is primarily internal to the Department of Labor, affecting its technological infrastructure and workforce. The geographic impact is concentrated in Washington D.C., where the Department of Labor is headquartered.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The extended duration of a sole-source contract can create vendor lock-in and limit future flexibility.
Without competitive benchmarking, assessing the true cost-effectiveness of the services is difficult.

Positive Signals

The contract's long duration suggests a stable and potentially effective working relationship with the contractor.
The firm fixed-price structure provides budget predictability for the Department of Labor.
The award to a single entity for custom programming may indicate specialized expertise required for the agency's unique needs.

Sector Analysis

The Information Technology sector, specifically custom computer programming services (NAICS 541511), is a significant area of federal spending. Agencies rely heavily on these services to develop, maintain, and modernize their IT systems. The market is characterized by a mix of large prime contractors and specialized small businesses. Federal spending in this area often involves complex requirements and long-term engagements, making contract management and oversight crucial for ensuring value and performance.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb: false'. Furthermore, the 'ss: false' flag suggests it was not a small business prime award. This means that opportunities for small businesses to directly participate as prime contractors were likely limited. While NCS Pearson Inc. may engage small businesses as subcontractors, the primary award did not prioritize small business participation, potentially limiting the direct economic benefit to the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. The 'aw' field indicates 'DCA', which might refer to a specific contracting activity or office within the agency responsible for its administration. Transparency is limited due to the sole-source nature and lack of public detail on performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Custom Computer Programming Services
IT Services
Department of Labor IT Contracts
Long-Term IT Engagements

Risk Flags

Sole-source award lacks competitive pricing pressure.
Extended contract duration may indicate potential for vendor lock-in.
Lack of public performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $67.7 million to NCS PEARSON INC. EFAST I

Who is the contractor on this award?

The obligated recipient is NCS PEARSON INC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $67.7 million.

What is the period of performance?

Start: 2004-09-28. End: 2011-06-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED', which is a form of sole-source award. The specific justification for this determination is not detailed in the provided data. Typically, sole-source justifications are based on factors such as the existence of only one responsible source, urgent and compelling needs, or specific capabilities unique to a single contractor. Without further documentation from the Department of Labor, the precise reason for not competing this $67.7 million contract remains unknown. This lack of competition is a key area for scrutiny regarding potential value for money.

How does the annual average cost of this contract compare to similar custom programming services procured by other federal agencies?

The contract's total value of $67,686,071.32 over approximately 2466 days (about 6.75 years) averages to roughly $10 million per year. Benchmarking this against similar custom programming services is challenging without detailed scope of work and performance metrics. However, federal IT spending databases often show significant variation in per-year costs for custom development based on complexity, security requirements, and labor categories. Given this was a sole-source award, it is plausible that the annual cost might be higher than what could be achieved through competitive bidding, but a definitive comparison requires access to more granular data on the services rendered and market rates for comparable federal contracts.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These metrics are typically detailed in the contract's statement of work and are crucial for evaluating the contractor's performance and the value delivered. For custom programming services, KPIs might include project completion timelines, bug resolution rates, system uptime, user satisfaction, and adherence to coding standards. The absence of this information in the summary data makes it difficult to assess the effectiveness and quality of the services provided by NCS Pearson Inc. under this award.

What is the track record of NCS Pearson Inc. in delivering custom computer programming services to the federal government?

NCS Pearson Inc. has a history of federal contracting, including in the IT services domain. The award of this significant $67.7 million contract by the Department of Labor suggests a level of trust and perceived capability by the agency. However, a comprehensive assessment of their track record would require reviewing past performance evaluations, any contract disputes or terminations, and the successful delivery of similar projects across various agencies. Without access to these detailed performance records, it's difficult to definitively assess their past success specifically in custom computer programming for federal clients.

What is the potential risk associated with a long-term, sole-source contract for custom programming?

Long-term, sole-source contracts for custom programming carry several risks. Firstly, the lack of competition can lead to inflated prices and reduced incentive for the contractor to innovate or improve efficiency, as there is no market pressure. Secondly, 'vendor lock-in' can occur, making it difficult and costly to switch providers if needs change or performance issues arise. Thirdly, the agency may become overly reliant on the contractor's specific knowledge and systems, creating a knowledge gap internally. Finally, without regular competitive re-evaluation, the contract may continue to fund services that are no longer the most cost-effective or technologically appropriate solution for the agency's evolving requirements.

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: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: GED Testing Service LLC (UEI: 210227468)

Address: 2510 N DODGE ST, IOWA CITY, IA, 01

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

Financial Breakdown

Contract Ceiling: $67,686,071

Exercised Options: $67,686,071

Current Obligation: $67,686,071

Timeline