OAO Corporation awarded $86M NASA contract for IT services, spanning over 10 years
Contract Overview
Contract Amount: $86,132,855 ($86.1M)
Contractor: OAO Corporation
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2001-09-15
End Date: 2012-01-20
Contract Duration: 3,779 days
Daily Burn Rate: $22.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: IT
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35812
State: Alabama Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $86.1 million to OAO CORPORATION for work described as: Key points: 1. Contract value of $86.1M over a decade suggests a significant investment in IT support. 2. The full and open competition indicates a potentially competitive bidding process. 3. A long contract duration of over 10 years may present risks related to evolving technology and contractor performance. 4. The contract's focus on 'Other Computer Related Services' positions it within a broad IT services sector. 5. Fixed-price contract type aims to control costs for the government, but may shift risk to the contractor. 6. The award to OAO Corporation represents a substantial commitment to a single vendor for these services.
Value Assessment
Rating: fair
The contract's total value of $86.1 million over more than 10 years averages to approximately $8.6 million annually. Benchmarking this against similar large-scale IT service contracts for federal agencies is challenging without more specific service details. However, the duration suggests a need for stable, long-term support. The firm fixed-price nature of the contract is a positive indicator for cost control, assuming the scope was well-defined.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. With 6 potential bidders indicated, this level of competition is generally favorable for price discovery and ensuring the government receives competitive offers. The process aimed to solicit proposals from a wide range of qualified contractors.
Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through a robust bidding process, leading to better value for money.
Public Impact
The primary beneficiary is NASA, which receives essential IT support services to maintain its operational capabilities. Services delivered likely include a range of computer-related functions, potentially encompassing system maintenance, software development, and IT infrastructure management. The contract's geographic impact is centered around NASA's operations, likely supporting facilities across the United States. Workforce implications include the creation or sustainment of IT jobs within OAO Corporation and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 10 years) increases the risk of technological obsolescence and potential cost overruns if scope management is weak.
- Reliance on a single contractor for a decade could lead to complacency or reduced innovation over time.
- The broad 'Other Computer Related Services' category might obscure specific performance metrics, making oversight more difficult.
Positive Signals
- Firm fixed-price contract type provides cost certainty for the government.
- Full and open competition suggests a potentially competitive award process, likely resulting in a fair market price.
- The significant contract value indicates a high level of trust and perceived capability from the contractor, OAO Corporation.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on computer-related services. This sector is characterized by rapid technological advancements and a wide array of specialized services. Federal spending in this area is substantial, supporting agency operations, cybersecurity, data management, and digital transformation initiatives. Comparable spending benchmarks would depend heavily on the specific services rendered, but large, long-term IT support contracts are common across federal agencies.
Small Business Impact
The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless OAO Corporation actively engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to assess the full impact.
Oversight & Accountability
Oversight for this contract would primarily reside with NASA's contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement, including service level agreements and reporting requirements. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- NASA IT Support Services
- Federal IT Services Contracts
- Large-Scale IT Service Agreements
- Computer Systems Design Services
- Information Technology Professional Services
Risk Flags
- Long contract duration may lead to technological obsolescence.
- Potential for contractor complacency over extended period.
- Broad service category could obscure performance metrics.
- Reliance on fixed-price for long-term IT services can be risky.
Tags
it-services, nasa, large-contract, firm-fixed-price, full-and-open-competition, information-technology, computer-related-services, long-term-contract, alabama, oaocorp
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $86.1 million to OAO CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is OAO CORPORATION.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $86.1 million.
What is the period of performance?
Start: 2001-09-15. End: 2012-01-20.
What specific IT services were included under the 'Other Computer Related Services' NAICS code for this contract?
The 'Other Computer Related Services' (NAICS 541519) category is broad and can encompass a wide range of IT functions beyond core infrastructure or software development. For this NASA contract, specific services could have included IT consulting, data processing, disaster recovery services, IT support for specialized scientific equipment, or custom IT solutions tailored to NASA's unique mission requirements. Without the detailed Performance Work Statement (PWS), it's difficult to pinpoint the exact services. However, given NASA's mission, it's plausible these services supported mission-critical systems, research computing, or agency-wide IT operations, demanding high levels of technical expertise and reliability.
How does the $86.1 million contract value compare to NASA's typical spending on similar IT support over a decade?
An $86.1 million contract over approximately 10 years equates to an average annual spend of roughly $8.6 million. NASA's overall IT budget is substantial, often running into billions of dollars annually, supporting a vast array of programs and infrastructure. While $8.6 million per year might seem modest in the context of NASA's total IT expenditure, it represents a significant commitment for a specific service area or contractor. To provide a precise comparison, one would need to analyze NASA's historical spending on comparable IT service contracts (e.g., system maintenance, help desk support, network management) awarded during similar periods and under similar competition levels. This figure should be viewed relative to the scope and criticality of the services provided.
What are the potential risks associated with a firm fixed-price contract of this duration for IT services?
Firm fixed-price (FFP) contracts are designed to provide cost certainty for the government. However, for IT services over a long duration (over 10 years in this case), FFP contracts carry inherent risks. The primary risk is that the contractor may struggle to adapt to rapidly evolving technologies within the fixed price, potentially leading to outdated solutions or increased maintenance costs. Conversely, if the scope of work is not meticulously defined and managed, the contractor might face unforeseen costs, leading to potential disputes or a decline in service quality if they attempt to cut corners to maintain profitability. For the government, the risk lies in potentially paying for services that become less relevant or efficient due to technological advancements not adequately addressed in the original contract.
Given the 'full and open competition' and 6 bidders, what does this imply about the contractor's pricing strategy and potential for profit?
Full and open competition with multiple bidders (6 in this case) generally suggests a market where several companies possess the capability to perform the required services. This competitive environment typically pressures bidders to offer more aggressive pricing to win the contract. For OAO Corporation, winning this contract implies their proposed price was deemed the most advantageous to NASA, considering both cost and technical factors. It suggests OAO Corporation likely calculated their costs, added a competitive profit margin, and submitted a bid that was attractive enough to outperform rivals. The profit potential is thus constrained by the competitive landscape, aiming for a reasonable return rather than an opportunistic one, assuming NASA conducted a thorough evaluation.
How might the long contract term (over 10 years) impact contractor performance and NASA's ability to leverage new technologies?
A contract term exceeding a decade presents a dual-edged sword for contractor performance and technology adoption. On one hand, it allows for stability, deep institutional knowledge, and long-term relationship building, potentially leading to highly efficient and reliable service delivery as the contractor becomes intimately familiar with NASA's systems. On the other hand, it can foster complacency, reduce the incentive for continuous innovation, and make it challenging for NASA to incorporate cutting-edge technologies that emerge mid-contract. NASA might need to rely on contract modifications, separate procurements, or strong performance incentives to ensure the contractor remains agile and incorporates relevant technological advancements, rather than becoming locked into potentially outdated solutions.
What is the significance of the 'AL' (Alabama) state code and 'ALABAMA' location for this NASA contract?
The 'AL' state code and 'ALABAMA' location likely indicate the state where the contractor, OAO Corporation, is headquartered or where a significant portion of the contract work will be performed. For NASA, this could mean a concentration of IT support services being delivered from facilities within Alabama. This might have implications for local economic impact, job creation within the state, and potentially the logistics of service delivery if NASA facilities are also located in or near Alabama. It also helps in tracking federal contract spending geographically, contributing to regional economic analysis and understanding the distribution of federal dollars.
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
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 16511 SPACE CENTER BLVD #, HOUSTON, TX, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $86,132,855
Exercised Options: $86,132,855
Current Obligation: $86,132,855
Parent Contract
Parent Award PIID: NAS898144
IDV Type: IDC
Timeline
Start Date: 2001-09-15
Current End Date: 2012-01-20
Potential End Date: 2012-01-20 00:00:00
Last Modified: 2012-05-01
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