DoD's $117M IT contract awarded to SMARTRONIX, LLC for compute, network, and storage consumption

Contract Overview

Contract Amount: $117,276,064 ($117.3M)

Contractor: Smartronix, LLC

Awarding Agency: Department of Defense

Start Date: 2022-02-02

End Date: 2025-02-03

Contract Duration: 1,097 days

Daily Burn Rate: $106.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUTE, NETWORK, AND STORAGE CONSUMPTION

Place of Performance

Location: HOLLYWOOD, SAINT MARYS County, MARYLAND, 20636

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $117.3 million to SMARTRONIX, LLC for work described as: COMPUTE, NETWORK, AND STORAGE CONSUMPTION Key points: 1. Value for money assessed through firm-fixed-price structure and delivery order award. 2. Competition dynamics indicate a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators include a 3-year duration and a single delivery order, which may limit long-term flexibility. 4. Performance context is within engineering services for the Department of the Navy. 5. Sector positioning is within IT infrastructure services, a critical component of defense operations.

Value Assessment

Rating: good

The contract's firm-fixed-price structure provides cost certainty for the government. Benchmarking against similar IT infrastructure contracts is challenging without more granular data on the specific services and quantities. However, the award to SMARTRONIX, LLC, a known IT services provider, suggests a reasonable assessment of capability and price. The total value of $117.3 million over approximately three years indicates a significant but not exceptionally high annual spend for the scope of services.

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 presence of 3 bidders suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for price discovery, the number of bidders can influence the intensity of that discovery.

Taxpayer Impact: A full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to lower overall costs for the government.

Public Impact

The Department of the Navy benefits from enhanced IT infrastructure capabilities. Services delivered include compute, network, and storage consumption, crucial for operational readiness. The geographic impact is primarily within Maryland, where the contractor is located. Workforce implications include potential support roles for IT professionals and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly specific to this contract's architecture.
Reliance on a single delivery order may not capture the full spectrum of potential cost savings over a longer period.
The fixed-price nature might disincentivize cost-saving innovations by the contractor if not structured with performance incentives.

Positive Signals

Awarded under full and open competition, indicating a broad market search.
Firm-fixed-price contract type provides budget certainty.
Contractor has a track record in IT services, suggesting familiarity with government requirements.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on core infrastructure components like compute, network, and storage. The federal IT market is substantial, with significant annual spending on maintaining and upgrading these essential services across various agencies. This contract represents a portion of the Department of Defense's ongoing investment in modernizing its technological capabilities to support its mission.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature and scale of the services, it is unlikely that significant subcontracting opportunities for small businesses would be mandated, though the prime contractor may engage them voluntarily.

Oversight & Accountability

The firm-fixed-price contract type provides a degree of oversight through adherence to agreed-upon deliverables and pricing. Accountability is managed through contract performance monitoring by the Department of the Navy. Transparency is facilitated by the contract award notice, though detailed performance metrics are not publicly available. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise Network Services
Cloud Computing Services Contracts
Data Center Consolidation Initiatives

Risk Flags

Potential for scope creep if future needs are not fully captured.
Reliance on a single delivery order may limit long-term competitive pricing advantages.
Contract performance monitoring is crucial to ensure value delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.3 million to SMARTRONIX, LLC. COMPUTE, NETWORK, AND STORAGE CONSUMPTION

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 $117.3 million.

What is the period of performance?

Start: 2022-02-02. End: 2025-02-03.

What is the historical spending pattern for compute, network, and storage consumption services by the Department of the Navy?

Analyzing historical spending patterns for compute, network, and storage consumption by the Department of the Navy is crucial for contextualizing the $117.3 million award. While specific historical data for this exact service category and contractor is not provided, the Navy, like other branches of the DoD, has consistently invested heavily in IT infrastructure. This includes significant expenditures on cloud migration, data center modernization, and network upgrades. Trends often show an increasing reliance on cloud-based solutions and a push for more agile and secure network architectures. The annual spend can fluctuate based on specific modernization initiatives, cybersecurity threats, and evolving technological requirements. Without access to the Navy's detailed procurement history, it's difficult to pinpoint exact historical figures, but it's safe to assume a multi-billion dollar annual investment in IT services across the enterprise.

How does the pricing of this contract compare to similar IT infrastructure contracts awarded by other federal agencies?

Benchmarking the pricing of this $117.3 million contract against similar IT infrastructure contracts requires access to detailed pricing structures and service level agreements, which are not publicly available. However, the firm-fixed-price (FFP) award type suggests that the price was determined upfront and is not subject to change based on actual costs incurred by the contractor, provided the scope is met. Federal agencies generally aim for competitive pricing through mechanisms like full and open competition. Comparisons would ideally involve contracts for similar scopes of compute, network, and storage services, awarded around the same period, and under similar competition levels. Given the significant scale, it's likely that the pricing reflects market rates for large-scale enterprise IT services, potentially benefiting from economies of scale due to the contract's size.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key Performance Indicators (KPIs) for a contract focused on compute, network, and storage consumption typically revolve around availability, performance, security, and responsiveness. For instance, KPIs might include network uptime percentages (e.g., 99.9% availability), data transfer speeds, storage accessibility, incident response times for network issues, and adherence to security protocols and compliance standards. The firm-fixed-price nature of this contract implies that the contractor is obligated to deliver the specified services at the agreed-upon price, with penalties or remedies potentially in place for failing to meet critical KPIs. The Department of the Navy would establish these KPIs during the contract negotiation and monitor them throughout the performance period to ensure value and operational effectiveness.

What is SMARTRONIX, LLC's track record with the Department of Defense and similar IT contracts?

SMARTRONIX, LLC has a significant track record of serving the Department of Defense (DoD) and other federal agencies with IT and cloud computing services. They are known for their expertise in cloud solutions, cybersecurity, and mission-critical IT infrastructure. Their past performance often includes work related to modernizing legacy systems, migrating services to cloud environments (like AWS and Azure), and providing robust network and storage solutions. Awards like this one from the Department of the Navy are consistent with their established capabilities and market position. A review of federal procurement databases would likely reveal numerous other contracts awarded to SMARTRONIX, demonstrating their experience and capability in delivering complex IT solutions to defense clients.

What are the potential risks associated with a single delivery order for such a large IT services contract?

A primary risk associated with a single delivery order for a large IT services contract is the potential for limited flexibility and scope creep. If the initial delivery order does not fully anticipate all future needs or if requirements evolve significantly, the government may need to negotiate separate contracts or modifications, which can be time-consuming and potentially less cost-effective than a more comprehensive, multi-order approach. Furthermore, a single order might not fully leverage competitive pressures over the entire lifecycle of the need. While this contract is under full and open competition, subsequent needs might not receive the same level of competitive bidding if they are seen as extensions of the initial order. There's also a risk that the contractor might not be incentivized to innovate beyond the defined scope of the single order.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003921R3030

Offers Received: 3

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, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $148,857,417

Exercised Options: $131,530,391

Current Obligation: $117,276,064

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8527

IDV Type: IDC

Timeline