DoD Awards $81M Classified IT Services Task Order to Epsilon Inc. for Computer Systems Design
Contract Overview
Contract Amount: $80,878,757 ($80.9M)
Contractor: Epsilon Inc
Awarding Agency: Department of Defense
Start Date: 2024-10-18
End Date: 2026-10-17
Contract Duration: 729 days
Daily Burn Rate: $110.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: CLASSIFIED IT SERVICES TASK ORDER 1
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $80.9 million to EPSILON INC for work described as: CLASSIFIED IT SERVICES TASK ORDER 1 Key points: 1. Significant award value of $80.9M for IT services. 2. Sole-source award to Epsilon Inc. raises competition concerns. 3. Contract duration of 729 days (approx. 2 years) indicates a substantial, ongoing need. 4. Focus on classified IT services suggests high security requirements and potential for specialized expertise. 5. The award falls under the Computer Systems Design Services NAICS code.
Value Assessment
Rating: questionable
The contract's value of $80.9M for 729 days of classified IT services needs further benchmarking against similar classified contracts. Without access to specific classified contract data, a direct comparison is difficult, but the price per day is substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and may result in a higher cost to taxpayers than if multiple vendors had competed for the work.
Taxpayer Impact: The lack of competition for this $80.9M contract raises concerns about potential overpayment and inefficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the sole-source nature of the award. The classified nature of the services means public scrutiny of the contract's details and performance is limited. Dependence on a single contractor for critical classified IT services could pose a risk if performance issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of transparency due to classified nature
- Potential for inflated pricing without competition
Positive Signals
- Award to a single, potentially specialized vendor
- Clear contract duration and delivery schedule
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on computer systems design services. The award value is significant for this type of service, especially given the classified nature which often commands higher rates.
Small Business Impact
The data indicates this contract was not awarded to a small business. There is no information provided on whether small business subcontracting opportunities were mandated or utilized.
Oversight & Accountability
Given the sole-source award and the classified nature of the services, robust oversight is crucial to ensure the contractor is performing effectively and that the pricing remains fair. The Department of Defense's internal oversight mechanisms will be key.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Classified nature reduces public transparency and oversight.
- Potential for higher costs due to lack of competitive bidding.
- Long-term contract duration increases dependency on the sole vendor.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $80.9 million to EPSILON INC. CLASSIFIED IT SERVICES TASK ORDER 1
Who is the contractor on this award?
The obligated recipient is EPSILON INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $80.9 million.
What is the period of performance?
Start: 2024-10-18. End: 2026-10-17.
What specific classified IT services are being provided under this task order, and how do they align with the Department of Defense's strategic objectives?
The task order specifies 'Computer Systems Design Services' under NAICS code 541512. While the exact nature of the classified services is not public, it likely involves the design, development, integration, and maintenance of secure IT systems crucial for national security operations. These services would support the Department of Defense's mission-critical functions that require a high level of confidentiality and security.
What justification was provided for the sole-source award, and what steps were taken to ensure the price was fair and reasonable given the lack of competition?
The justification for a sole-source award is typically based on factors like unique capabilities, urgent need, or lack of other responsible sources. For this contract, the classified nature might necessitate specific clearances or proprietary technology held by Epsilon Inc. The Department of Defense would have conducted a price analysis, potentially using historical data or cost breakdowns, to determine fairness, though transparency is limited.
What are the potential risks associated with awarding a large, long-term contract for classified IT services on a sole-source basis, and how are these risks being mitigated?
The primary risks include potential cost overruns due to lack of competition, vendor lock-in, and performance issues if the contractor fails to meet stringent security and operational requirements. Mitigation strategies could involve strong contract management, performance metrics, regular reviews, and contingency planning for potential vendor failure, though details are obscured by the classified nature of the work.
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 › IT AND TELECOM - NETWORK
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001924R0078
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: American Systems Corporation
Address: 1 MONTICELLO VILLAGE DR, WEAVERVILLE, NC, 28787
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $166,411,213
Exercised Options: $80,878,757
Current Obligation: $80,878,757
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001925D0010
IDV Type: IDC
Timeline
Start Date: 2024-10-18
Current End Date: 2026-10-17
Potential End Date: 2029-10-17 00:00:00
Last Modified: 2025-12-16
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