DoD's $21B IT Services Contract with Agile Defense: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $21,019,715 ($21.0M)

Contractor: Agile Defense, LLC

Awarding Agency: Department of Defense

Start Date: 2020-06-16

End Date: 2029-09-29

Contract Duration: 3,392 days

Daily Burn Rate: $6.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICE ARE RENDERED VIA ARMY CHESS ITES-3S CONTRACT VEHICLE. ALTHOUGH IDIQ IS NON-COMMERCIAL, IT STIPULATES COMMERCIAL CONTRACT CLAUSES ARE INCLUDED IN THE BASE CONTRACT AS TASK ORDERS ISSUED UNDER ITES-3S MAY BE COMMERCIAL.

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70114

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to AGILE DEFENSE, LLC for work described as: SERVICE ARE RENDERED VIA ARMY CHESS ITES-3S CONTRACT VEHICLE. ALTHOUGH IDIQ IS NON-COMMERCIAL, IT STIPULATES COMMERCIAL CONTRACT CLAUSES ARE INCLUDED IN THE BASE CONTRACT AS TASK ORDERS ISSUED UNDER ITES-3S MAY BE COMMERCIAL. Key points: 1. Value for money appears fair given the broad scope of IT services and long performance period. 2. Competition dynamics show a full and open approach, suggesting potential for price discovery. 3. Risk indicators are moderate, with a long contract duration and firm-fixed-price structure. 4. Performance context is within the Army's CHESS ITES-3S vehicle, a common platform for IT procurement. 5. Sector positioning is within IT services, specifically 'Other Computer Related Services', a broad category.

Value Assessment

Rating: good

The total contract value of over $21 billion across its duration suggests a significant investment in IT services. Benchmarking against similar large-scale IT support contracts within the DoD is challenging due to the IDIQ nature and the potential for diverse task orders. However, the firm-fixed-price structure on this delivery order aims to control costs. The value proposition hinges on the successful delivery of a wide range of IT services over nearly a decade.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under the Army CHESS ITES-3S Indefinite Delivery/Indefinite Quantity (IDIQ) contract, which itself was competed full and open. The specific delivery order likely benefited from the pre-existing competition within the ITES-3S vehicle. The fact that it's a full and open competition suggests a robust bidding process, potentially leading to competitive pricing.

Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple vendors to bid, driving down prices and fostering innovation to secure the contract.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other Army entities utilizing the CHESS ITES-3S vehicle for their IT needs. Services delivered encompass a wide array of IT support, including hardware, software, and telecommunications. Geographic impact is likely widespread, supporting military operations and personnel across various locations. Workforce implications include the potential for significant employment opportunities within the IT sector, both directly with Agile Defense and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 10 years) increases the risk of scope creep or evolving technological needs not being fully met.
Reliance on a single IDIQ vehicle (ITES-3S) might limit access to the most innovative solutions if not managed effectively.
Firm-fixed-price nature could incentivize cost-cutting that might impact service quality if not closely monitored.

Positive Signals

Awarded under a well-established IT procurement vehicle (ITES-3S) known for its broad IT capabilities.
Full and open competition suggests a competitive environment that should drive value.
The contract structure allows for flexibility through task orders, adapting to specific needs over time.

Sector Analysis

This contract falls within the broader IT services sector, a critical component of modern defense operations. The ITES-3S vehicle is a significant government-wide contract vehicle designed to provide a comprehensive range of IT solutions to the Army and other federal agencies. Spending in this sector is consistently high, reflecting the increasing reliance on technology for command, control, and logistics. Comparable spending benchmarks would involve looking at other large IDIQ contracts for IT support services.

Small Business Impact

While this specific delivery order does not indicate a small business set-aside, the underlying ITES-3S contract vehicle may have provisions for small business participation through subcontracting. Agile Defense, LLC's performance could involve opportunities for small businesses to provide specialized services or products. The extent of small business subcontracting will be a key factor in assessing the broader impact on the small business IT ecosystem.

Oversight & Accountability

Oversight is likely managed through the Army Contracting Command and the specific program executive offices within the Department of the Navy. Accountability measures would be tied to the performance metrics outlined in the task orders issued under this IDIQ. Transparency is facilitated by the contract's existence within a government procurement system, though specific task order details may be less public.

Related Government Programs

Army CHESS ITES-3S
DoD IT Modernization Programs
Navy IT Support Services
General Services Administration (GSA) IT Schedule

Risk Flags

Long contract duration
Potential for technological obsolescence
Scope creep risk
Contractor performance variability over time

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to AGILE DEFENSE, LLC. SERVICE ARE RENDERED VIA ARMY CHESS ITES-3S CONTRACT VEHICLE. ALTHOUGH IDIQ IS NON-COMMERCIAL, IT STIPULATES COMMERCIAL CONTRACT CLAUSES ARE INCLUDED IN THE BASE CONTRACT AS TASK ORDERS ISSUED UNDER ITES-3S MAY BE COMMERCIAL.

Who is the contractor on this award?

The obligated recipient is AGILE DEFENSE, 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 $21.0 million.

What is the period of performance?

Start: 2020-06-16. End: 2029-09-29.

What is Agile Defense, LLC's track record with large federal IT contracts, particularly within the DoD?

Agile Defense, LLC has a history of performing on federal IT contracts, including those with the Department of Defense. Their involvement in the Army CHESS ITES-3S program indicates a capability to handle large-scale, complex IT requirements. Analyzing past performance on similar IDIQ vehicles and delivery orders would provide further insight into their ability to meet performance expectations, manage resources effectively, and deliver quality services within budget and schedule constraints. Specific details on past contract performance, including any awards or penalties, would be crucial for a comprehensive assessment.

How does the pricing structure of this contract compare to similar IT services contracts awarded by the DoD?

The pricing for this contract is based on a firm-fixed-price (FFP) structure for the delivery order, issued under an IDIQ vehicle. FFP contracts are generally preferred when the scope of work is well-defined, as they shift cost risk to the contractor. To compare pricing effectively, one would need to benchmark the rates for specific labor categories, software, and hardware against other FFP task orders issued under ITES-3S or similar large IT IDIQ vehicles like GSA's IT Schedule 70. Factors such as contract duration, service level agreements, and geographic scope also influence pricing, making direct comparisons complex without detailed analysis of comparable task orders.

What are the primary risks associated with a contract of this magnitude and duration?

A contract valued at over $21 billion with a performance period extending nearly a decade carries several inherent risks. Firstly, technological obsolescence is a significant concern; IT landscapes evolve rapidly, and a contract spanning this long may struggle to keep pace with emerging technologies unless managed proactively. Secondly, scope creep is a risk, where the requirements may expand beyond the original intent, leading to cost overruns or schedule delays, despite the FFP nature. Thirdly, contractor performance risk exists; ensuring consistent quality and adherence to service level agreements over such an extended period requires robust oversight. Finally, the concentration of significant IT spending with one contractor could pose a risk if the contractor faces financial instability or strategic shifts.

How effective is the Army CHESS ITES-3S vehicle in facilitating efficient IT procurement for the DoD?

The Army Computer Hardware, Enterprise Software and Solutions (CHESS) IT Enterprise Solutions (ITES) program, including ITES-3S, is designed to streamline IT procurement for the Army and other federal agencies. ITES-3S, an IDIQ contract, aims to provide a broad range of IT hardware, software, and services through a competitive process. Its effectiveness is generally considered high due to its ability to offer pre-competed solutions, reducing acquisition lead times and administrative burden. However, the success of individual task orders, like this one, still depends on effective requirements definition, vendor performance management, and ongoing oversight to ensure value for money and alignment with evolving technological needs.

What is the historical spending trend for 'Other Computer Related Services' within the Department of the Navy?

Historical spending trends for 'Other Computer Related Services' (NAICS code 541519) within the Department of the Navy (DoN) would likely show a consistent and significant investment, reflecting the increasing digitization of naval operations. This category typically encompasses a wide range of services beyond standard IT support, potentially including cybersecurity consulting, data analytics, IT infrastructure management, and specialized software development. Analyzing past spending data would reveal whether this $21 billion contract represents a substantial increase, a continuation of existing investment levels, or a shift in procurement strategy for these types of services within the DoN.

Industry Classification

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

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11600 SUNRISE VALLEY DR STE 440, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $21,019,715

Exercised Options: $21,019,715

Current Obligation: $21,019,715

Actual Outlays: $505,748

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $3,564,701

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18DA023

IDV Type: IDC

Timeline