DoD's $38.8M Software Publishers contract with FOUR LLC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $38,833,086 ($38.8M)

Contractor: Four LLC

Awarding Agency: Department of Defense

Start Date: 2017-06-23

End Date: 2022-06-30

Contract Duration: 1,833 days

Daily Burn Rate: $21.2K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENTERPRISE PROGRAM

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to FOUR LLC for work described as: ENTERPRISE PROGRAM Key points: 1. Contract value of $38.8M over 5 years suggests a moderate annual spend. 2. The contract was competed under SAP, indicating a potentially streamlined process. 3. A single awardee suggests limited market engagement or a specific capability requirement. 4. The firm-fixed-price structure provides cost certainty for the government. 5. Performance period of over 5 years allows for long-term engagement and potential for relationship building. 6. The contract falls under the Software Publishers NAICS code, indicating a focus on software-related goods or services.

Value Assessment

Rating: fair

The total contract value of $38.8M over 1833 days (approximately 5 years) averages to about $7.76M annually. Without specific details on the software or services procured, a direct value-for-money assessment is challenging. However, the firm-fixed-price (FFP) contract type is generally favorable for the government as it shifts cost risk to the contractor. Benchmarking against similar contracts for enterprise software solutions would be necessary for a more precise valuation, but the duration and total value appear within a reasonable range for a significant enterprise-level software procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP (Simplified Acquisition Procedures), which often implies a less extensive competition than full and open procedures. The data indicates only one awardee, suggesting that either the competition was indeed very limited, or that FOUR LLC was the only entity that met the specific requirements or was able to respond within the SAP framework. This level of competition may not have fully leveraged market forces to drive down prices or encourage innovative solutions.

Taxpayer Impact: Limited competition can potentially lead to higher prices for taxpayers if the single awardee did not face significant pressure from other bidders to offer their best pricing.

Public Impact

The primary beneficiary is the Department of the Navy, receiving enterprise software solutions. The contract supports the operational needs of the Department of Defense through software procurement. The geographic impact is primarily within Virginia, where the contractor is located. Workforce implications are likely within FOUR LLC, potentially requiring specialized software development or support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than if more vendors had participated.
Reliance on a single vendor for enterprise software could create future lock-in risks.
The use of SAP might indicate a less rigorous vetting of technical capabilities or pricing compared to larger competitive processes.

Positive Signals

Firm-fixed-price contract provides budget certainty for the government.
The long performance period allows for sustained support and development of the software solution.
The contract is awarded to a single entity, potentially indicating a strong, specialized fit for the requirement.

Sector Analysis

The Software Publishers (NAICS 511210) sector is a critical component of the technology industry, encompassing companies that develop and publish software. This contract, valued at $38.8M over five years, represents a significant investment by the Department of the Navy in software solutions. Spending in this sector by the federal government is substantial, covering everything from operating systems and productivity software to specialized defense and intelligence applications. This contract fits within the broader trend of government agencies procuring commercial off-the-shelf (COTS) or customized software to meet evolving operational demands.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the awardee is likely not a small business given the contract value. There is no explicit information on subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal, unless FOUR LLC actively engages small businesses as subcontractors, which is not indicated here. The focus appears to be on a larger, established entity capable of fulfilling a significant enterprise software requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a firm-fixed-price contract, performance monitoring is key to ensuring deliverables meet specifications. Transparency is facilitated by contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Defense Enterprise Software Solutions (DOD EES)
General Services Administration (GSA) Schedule IT
Navy Information Technology Contracts
Software Development Services

Risk Flags

Limited Competition
Potential Vendor Lock-in
SAP Usage for Large Contract Value Questionable

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to FOUR LLC. ENTERPRISE PROGRAM

Who is the contractor on this award?

The obligated recipient is FOUR LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2017-06-23. End: 2022-06-30.

What specific enterprise software or services were procured under this contract?

The provided data identifies the NAICS code as 511210 (Software Publishers) and the PSC as potentially related to software. However, the specific enterprise software or services procured are not detailed. This could range from operating systems, database software, specialized defense applications, or software development and maintenance services. Understanding the exact nature of the software is crucial for a comprehensive assessment of its value, necessity, and the appropriateness of the competition level. Without this information, it's difficult to benchmark the $38.8M expenditure against industry standards for similar solutions.

How does the $38.8M contract value compare to similar enterprise software procurements by the DoD or other federal agencies?

Benchmarking the $38.8M contract value requires comparing it to similar enterprise software procurements. For instance, other large federal agencies like the GSA, NASA, or other branches of the DoD procure enterprise software through various vehicles, including GSA Schedules, Enterprise Software Agreements (ESAs), or full and open competitions. Annual spending on software by the federal government runs into billions of dollars. A contract of this size ($7.76M annually on average) is substantial but not exceptionally large in the context of major enterprise IT investments. However, its value proposition depends heavily on the criticality and scope of the software provided. A detailed comparison would involve analyzing contract vehicles, software types, and performance periods of comparable awards.

What were the specific criteria used to compete this contract under SAP, and why was only one awardee selected?

Simplified Acquisition Procedures (SAP) are typically used for acquisitions valued between the micro-purchase threshold and the SAP threshold (currently $250,000, but can be higher for certain agencies/circumstances). However, the contract value here is $38.8M, which significantly exceeds the standard SAP threshold. This suggests that either the contract was awarded under a specific exception allowing SAP for higher values, or the 'CT' field indicating 'COMPETED UNDER SAP' might be misapplied or refer to a specific internal process rather than the standard FAR-based SAP. If it truly was competed under SAP, it implies a less formal solicitation process, potentially fewer bidders, and possibly less stringent documentation requirements. The selection of a single awardee could stem from a highly specialized requirement, a pre-existing relationship, or a lack of sufficient interest from other vendors responding to the solicitation.

What is the track record of FOUR LLC in delivering enterprise software solutions to the federal government?

Information on FOUR LLC's track record is limited based solely on the provided data. The contract award itself indicates they were selected for a significant enterprise software procurement by the Department of the Navy. To assess their track record thoroughly, one would need to examine past performance reviews, other federal contracts awarded to them (especially for similar software types and values), and any reported issues or successes. Databases like the Contractor Performance Assessment Reporting System (CPARS) might contain relevant past performance information, though access can be restricted. Without this additional context, it's difficult to definitively gauge their reliability and expertise in delivering enterprise software.

What are the potential risks associated with awarding a $38.8M contract to a single vendor for enterprise software?

Awarding a large contract like this to a single vendor, especially for enterprise software, carries several risks. Vendor lock-in is a primary concern, making it difficult and costly to switch providers in the future. There's also the risk of complacency, where the vendor may reduce efforts to innovate or maintain competitive pricing once they have secured a long-term, sole-source-like position. Furthermore, if the vendor experiences financial instability, management issues, or fails to keep pace with technological advancements, it could severely disrupt the government's operations that rely on the software. Dependence on a single entity also increases vulnerability to supply chain disruptions or security breaches originating from that vendor.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this software procurement?

The Firm-Fixed-Price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks are understood. In this software procurement, FFP means that FOUR LLC is obligated to complete the work for a predetermined price, regardless of their actual costs. This shifts the risk of cost overruns from the government to the contractor. It provides budget certainty, allowing the Department of the Navy to know precisely how much the software solution will cost. While it doesn't eliminate performance risks, it significantly mitigates financial risks associated with fluctuating labor costs, material prices, or unforeseen expenses during the contract period.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: M6785417Q4051

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15413 SNOWHILL LN, CENTREVILLE, VA, 20120

Business Categories: 8(a) Program Participant, Category Business, Economically Disadvantaged Women Owned Small Business, Limited Liability Corporation, Minority Owned Business, Other Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $38,833,086

Exercised Options: $38,833,086

Current Obligation: $38,833,086

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J14A0003

IDV Type: BPA

Timeline