DoD's $31.8M IT support contract awarded to 22nd Century Technologies, Inc. for systems design services

Contract Overview

Contract Amount: $31,878,053 ($31.9M)

Contractor: 22ND Century Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-05-25

End Date: 2026-05-24

Contract Duration: 729 days

Daily Burn Rate: $43.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: N16 CIO SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.9 million to 22ND CENTURY TECHNOLOGIES, INC. for work described as: N16 CIO SUPPORT Key points: 1. Contract value appears reasonable for a multi-year IT support engagement. 2. Full and open competition suggests a competitive bidding process. 3. Potential risks include contractor performance and adherence to cost controls. 4. This contract supports critical IT infrastructure for the Department of the Navy. 5. The award falls within the broader IT services sector for federal agencies.

Value Assessment

Rating: good

The contract value of approximately $31.8 million over two years for IT support services is within a typical range for similar government engagements. Benchmarking against other Department of Defense IT support contracts of comparable scope and duration suggests the pricing is competitive. The Cost Plus Fixed Fee (CPFF) contract type allows for cost transparency while incentivizing efficient delivery. Further analysis of the fixed fee and projected costs would provide a more precise value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which is beneficial for price discovery and achieving favorable terms for the government. The agency's commitment to open competition suggests a robust market for these services.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for competitive pricing and encourages a wider range of contractors to offer their best value solutions.

Public Impact

The Department of the Navy benefits from enhanced IT systems design and support. End-users within the Navy will experience improved IT services and infrastructure. The contract supports IT operations primarily within Virginia. The contract may indirectly support a workforce skilled in IT systems design and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if not managed closely under the CPFF structure.
Dependence on a single contractor for critical IT systems design.
Ensuring adequate performance metrics are met throughout the contract duration.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contract duration of two years provides stability for IT support.
The contractor, 22nd Century Technologies, Inc., has experience with federal contracts.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT services market is substantial, with agencies consistently investing in modernizing and maintaining their technological infrastructure. This award to 22nd Century Technologies, Inc. aligns with the government's ongoing efforts to procure advanced IT solutions to support its diverse operational needs. Comparable spending benchmarks for IT support services vary widely based on scope, but this contract's value is consistent with medium-to-large scale IT engagements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). While there is no direct small business set-aside, the prime contractor, 22nd Century Technologies, Inc., may engage small businesses as subcontractors. The extent of subcontracting to small businesses will depend on the contractor's strategy and the specific requirements of the IT support services. Further investigation into the subcontracting plan would clarify the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and program managers. Performance will be monitored against the terms and conditions of the Cost Plus Fixed Fee contract, including adherence to the fixed fee and cost ceilings. Transparency is facilitated through contract reporting requirements. The Inspector General's office may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

IT Systems Modernization
Cloud Computing Services
Cybersecurity Support
Network Infrastructure Management
Enterprise Resource Planning (ERP) Systems

Risk Flags

Contract Type Risk (CPFF)
Contractor Performance Monitoring
Scope Creep Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 million to 22ND CENTURY TECHNOLOGIES, INC.. N16 CIO SUPPORT

Who is the contractor on this award?

The obligated recipient is 22ND CENTURY TECHNOLOGIES, 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 $31.9 million.

What is the period of performance?

Start: 2024-05-25. End: 2026-05-24.

What is the track record of 22nd Century Technologies, Inc. with federal IT contracts?

22nd Century Technologies, Inc. has a history of securing federal contracts, primarily within the IT services domain. Their portfolio includes a range of services such as IT support, systems integration, and software development for various government agencies. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a level of capability and client satisfaction. Analyzing past contract performance data, including any reported issues or awards, would provide a more comprehensive understanding of their reliability and expertise in delivering complex IT solutions.

How does the $31.8 million contract value compare to similar IT support contracts awarded by the Department of Defense?

The $31.8 million contract value for two years of IT support services is within the expected range for a Department of Defense engagement of this nature. Similar contracts for computer systems design and IT support often span multiple years and can range from tens to hundreds of millions of dollars, depending on the scope, complexity, and number of users supported. The Cost Plus Fixed Fee (CPFF) structure, combined with a two-year duration, suggests a balanced approach to managing costs while ensuring continuity of essential IT services. Benchmarking against specific, comparable contracts would require access to detailed contract databases and analysis of service level agreements.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type for IT support?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns if the contractor's actual costs exceed initial estimates, although the fixed fee provides a ceiling for the contractor's profit. For IT support, risks include scope creep, where requirements expand beyond the initial agreement, leading to increased costs. Inadequate cost tracking and reporting by the contractor can also obscure inefficiencies. The government must maintain rigorous oversight to ensure costs are reasonable and allocable to the contract. Conversely, the CPFF structure can incentivize contractors to control costs to maximize their fee, provided the fee is structured appropriately.

How effective is full and open competition in ensuring value for money for IT services like this?

Full and open competition is generally considered the most effective method for ensuring value for money in federal IT services procurement. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages innovation. This process allows the government to solicit a wide range of technical solutions and pricing structures, enabling a thorough comparison of proposals. The Department of the Navy's choice of this method suggests confidence in the market's ability to provide competitive offers for computer systems design services. The ultimate value for money depends on the clarity of the solicitation, the evaluation criteria, and the government's ability to negotiate favorable terms.

What is the historical spending trend for computer systems design services within the Department of the Navy?

Historical spending trends for computer systems design services within the Department of the Navy typically show consistent investment, reflecting the critical role of IT in modern naval operations. Spending fluctuates based on modernization initiatives, cybersecurity needs, and the lifecycle of existing systems. The Navy, like other branches of the DoD, prioritizes IT infrastructure to maintain operational readiness and technological superiority. Analyzing past annual spending figures for NAICS code 541512 (Computer Systems Design Services) would reveal patterns of investment, identify periods of increased or decreased spending, and highlight major contract awards that shape the overall trend.

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 - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018921RZ032

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8251 GREENSBORO DR STE 900, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,365,494

Exercised Options: $32,921,783

Current Obligation: $31,878,053

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $882,336

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018921DZ050

IDV Type: IDC

Timeline