DoD awards $29.4M for PKI Base Year Services to SMARTRONIX, LLC, a computer systems design contract

Contract Overview

Contract Amount: $29,377,523 ($29.4M)

Contractor: Smartronix, LLC

Awarding Agency: Department of Defense

Start Date: 2020-10-28

End Date: 2025-10-31

Contract Duration: 1,829 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PKI BASE YEAR SERVICES

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.4 million to SMARTRONIX, LLC for work described as: PKI BASE YEAR SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Full and open competition suggests a competitive bidding process. 3. The contract duration of 1829 days (approx. 5 years) indicates a long-term need for these services. 4. Services fall under computer systems design, a critical IT support function. 5. The award was made by the Department of the Navy, a major component of the DoD. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: good

The contract value of $29.4 million over approximately five years for computer systems design services appears reasonable given the duration and the nature of IT support for a large agency like the Department of the Navy. Benchmarking against similar contracts for IT systems design and integration services within the Department of Defense would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The data does not specify the number of bids received, but the designation implies a competitive process was conducted. This approach is generally expected to yield fair market prices and encourage innovation from a broad range of potential contractors.

Taxpayer Impact: Full and open competition is the most taxpayer-favorable method as it maximizes the potential for competitive pricing and ensures the government receives the best value by considering all qualified vendors.

Public Impact

The Department of the Navy benefits from essential computer systems design services to maintain and enhance its IT infrastructure. This contract supports the operational readiness and cybersecurity posture of naval forces. The services likely impact various naval commands and personnel requiring robust IT systems. Workforce implications may include IT professionals employed by SMARTRONIX, LLC, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders received under full and open competition limits the assessment of competitive intensity.
The provided data does not include performance metrics or past performance ratings for SMARTRONIX, LLC on this or similar contracts.
The specific nature of 'PKI Base Year Services' requires further definition to fully understand the scope and criticality of the work.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Firm-fixed-price contract type shifts cost risk to the contractor, potentially leading to better cost control.
The contract is for a significant duration, indicating a sustained and important requirement for the Department of the Navy.
SMARTRONIX, LLC is a known entity in the federal contracting space, suggesting some level of established capability.

Sector Analysis

The contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. This is a broad category encompassing the design, development, integration, and maintenance of complex computer systems. The market for such services within the federal government is substantial, with agencies like the Department of Defense being major consumers. Spending in this area is critical for maintaining national security, operational efficiency, and technological superiority. Comparable spending benchmarks would typically be found in IT services categories within IT spending reports from agencies like the Government Accountability Office (GAO) or the Department of Defense's own IT budget allocations.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does the data indicate any specific subcontracting requirements for small businesses. The prime contractor, SMARTRONIX, LLC, is likely a mid-to-large-sized business. The absence of set-aside provisions means that opportunities for small businesses to directly participate in this specific contract are limited unless they are part of the prime contractor's supply chain or are awarded subcontracts by SMARTRONIX, LLC.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the DoD Inspector General, who investigates fraud, waste, and abuse. Transparency is facilitated through contract databases like FPDS-NG (Federal Procurement Data System - Next Generation), where award details are publicly available. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to successful delivery.

Related Government Programs

DoD IT Modernization Programs
Naval Information Warfare Systems Command (NAVWAR) Contracts
Cybersecurity and Infrastructure Security Agency (CISA) Services
General Services Administration (GSA) IT Schedule Contracts

Risk Flags

Potential for scope creep in long-term FFP contracts.
Limited visibility into the number of bidders for full and open competition.
Need for further clarification on specific PKI services and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.4 million to SMARTRONIX, LLC. PKI BASE YEAR SERVICES

Who is the contractor on this award?

The obligated recipient is SMARTRONIX, 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 $29.4 million.

What is the period of performance?

Start: 2020-10-28. End: 2025-10-31.

What is the specific nature of the 'PKI Base Year Services' being procured?

PKI stands for Public Key Infrastructure, a system of hardware, software, policies, and procedures needed to create, manage, distribute, use, store, and revoke digital certificates and manage public-key encryption. 'PKI Base Year Services' likely refers to the foundational services required to establish, operate, and maintain a PKI system for the Department of the Navy. This could include certificate authority services, key management, directory services, and support for end-user authentication and encryption. The 'Base Year' designation suggests this is the initial period of performance, potentially with options for subsequent years, and is critical for securing communications and data within the Navy's network.

How does the $29.4 million contract value compare to similar IT systems design contracts within the DoD?

Comparing the $29.4 million value requires access to detailed contract databases and analysis of similar scope IT systems design and support contracts within the Department of Defense over the past few years. Contracts for enterprise-wide IT infrastructure, cybersecurity solutions, or complex system integration can range from tens to hundreds of millions of dollars. Given that this contract spans approximately five years, the annual value is around $5.9 million. This figure appears moderate for a large federal agency's IT services, suggesting it might cover a specific program or a defined set of systems rather than a complete agency-wide overhaul. A comprehensive benchmark would involve analyzing contracts with similar North American Industry Classification System (NAICS) codes (like 541512) awarded by DoD components.

What are the potential risks associated with a five-year firm-fixed-price contract for computer systems design?

A primary risk with a long-term firm-fixed-price (FFP) contract is scope creep. If the requirements for 'PKI Base Year Services' evolve significantly over the five-year period, the contractor may face challenges in delivering the expanded scope without additional funding, or the government may not receive updated capabilities if the scope remains rigidly fixed. Another risk is that the FFP structure, while beneficial for cost certainty, could disincentivize innovation if not managed properly, as the contractor's focus might be on meeting minimum requirements to ensure profitability. Furthermore, if the initial cost estimation was inaccurate or market conditions change drastically, the contractor might incur losses, potentially impacting their ability or motivation to perform effectively towards the end of the contract term.

What is SMARTRONIX, LLC's track record with the Department of the Navy or similar IT service contracts?

SMARTRONIX, LLC has a significant history of contracting with the U.S. federal government, including the Department of Defense and various Navy commands. Publicly available data indicates they have been awarded numerous contracts for IT services, cybersecurity, cloud solutions, and systems engineering. Their experience often involves supporting complex defense and intelligence community requirements. While this specific award is for 'PKI Base Year Services,' their broader portfolio suggests they possess the technical expertise and security clearances necessary for such a role. A deeper dive into their past performance evaluations and specific contract history with the Navy would provide a more granular assessment of their reliability and capability for this particular service.

How has federal spending on computer systems design services (NAICS 541512) trended over the last five years?

Federal spending on computer systems design services, categorized under NAICS code 541512, has generally shown a consistent upward trend over the last five years, reflecting the increasing reliance of government agencies on advanced IT infrastructure and digital transformation initiatives. Agencies across the DoD, civilian departments, and intelligence communities continue to invest heavily in modernizing systems, enhancing cybersecurity, and leveraging data analytics. While specific year-over-year fluctuations can occur due to budget cycles and shifting priorities, the overall trajectory indicates sustained demand for these services. Factors driving this trend include the need to upgrade legacy systems, implement cloud solutions, and address evolving cybersecurity threats, making this a critical spending category for government operations.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: M6785420R4037

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 44150 SMARTRONIX WAY STE 200, HOLLYWOOD, MD, 20636

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,516,391

Exercised Options: $34,136,601

Current Obligation: $29,377,523

Actual Outlays: $4,725,907

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $39,192,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0007

IDV Type: GWAC

Timeline