DoD's $10.9M Computer Systems Design Services contract awarded to Siemens Government Technologies Inc. shows fair value

Contract Overview

Contract Amount: $10,875,639 ($10.9M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2022-02-23

End Date: 2023-08-21

Contract Duration: 544 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: ALE AND IDRN SUPPORT SERVICES- FY22

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $10.9 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ALE AND IDRN SUPPORT SERVICES- FY22 Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The fixed-price level of effort contract type provides cost certainty for the government. 3. The duration of 544 days indicates a significant, ongoing need for these services. 4. The contract falls under the Computer Systems Design Services NAICS code, a common area for IT support. 5. Siemens Government Technologies Inc. is a large, established contractor with experience in government IT services. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

The contract's value of approximately $10.9 million over 544 days, or roughly $20,000 per day, appears reasonable for complex computer systems design services. Benchmarking against similar contracts for IT support and system integration within the Department of Defense suggests that this pricing is within an expected range. The fixed-price level of effort structure helps control costs, but detailed performance metrics would be needed for a more precise value assessment. Without specific deliverables or performance data, it's challenging to definitively state if it represents excellent value, but it does not appear overpriced.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through 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 should lead to more favorable pricing and better quality solutions for the government. The open competition suggests that the agency sought the best possible offer in terms of both cost and technical merit.

Taxpayer Impact: Full and open competition is the most taxpayer-friendly approach, as it maximizes the potential for cost savings and ensures that the government receives competitive pricing by allowing a wide range of vendors to participate.

Public Impact

The Department of the Navy benefits from enhanced computer systems design and support, crucial for its operational efficiency. This contract supports critical IT infrastructure and services necessary for naval operations. The services are likely to have a broad impact across various naval commands and installations. The contract supports a workforce of skilled IT professionals employed by Siemens Government Technologies Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the services provided.
The duration of the contract (544 days) could lead to vendor lock-in if not managed carefully.
Potential for scope creep in complex IT projects, which could increase costs beyond initial estimates if not tightly controlled.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Fixed-price contract type provides cost predictability for the government.
Siemens Government Technologies Inc. is an established contractor with a track record in government IT services.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on computer systems design services. This is a critical area for government operations, encompassing everything from network infrastructure design to software development and system integration. The market for IT services to the federal government is substantial, with agencies constantly seeking to modernize their systems and improve cybersecurity. This contract with the Department of the Navy represents a typical procurement within this sector, aimed at ensuring the reliability and efficiency of complex IT systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses were likely not the primary focus of this specific award. However, Siemens Government Technologies Inc., as a large prime contractor, may engage small businesses as subcontractors to fulfill certain aspects of the contract, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Transparency is generally maintained through contract databases like FPDS, which record award details. The Inspector General's office for the Department of Defense may also conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Department of Defense IT Services
Navy IT Modernization Programs
Computer Systems Design and Related Services
Federal IT Support Contracts

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of contractor performance not meeting expectations.
Dependency on contractor's technical expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.9 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ALE AND IDRN SUPPORT SERVICES- FY22

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT 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 $10.9 million.

What is the period of performance?

Start: 2022-02-23. End: 2023-08-21.

What is the track record of Siemens Government Technologies Inc. in delivering similar IT services to the federal government?

Siemens Government Technologies Inc. has a significant track record of delivering IT and professional services to various U.S. federal agencies. They are known for providing solutions in areas such as enterprise IT, cybersecurity, cloud computing, and digital transformation. Their experience often includes large-scale system integration, infrastructure management, and support services. While specific performance data for this particular contract is not detailed here, their general history suggests they possess the capabilities to handle complex IT projects. Past performance reviews and contract award histories available through federal procurement databases would offer more granular insights into their success rates, on-time delivery, and client satisfaction across their portfolio of government contracts.

How does the cost of this contract compare to similar IT support contracts awarded by the Department of Defense?

The total award amount of approximately $10.9 million for 544 days, averaging around $20,000 per day, places this contract in a moderate spending category for IT support services within the DoD. Benchmarking requires comparing it to contracts with similar scope, complexity, and duration. Contracts for enterprise IT support, system integration, or specialized computer systems design services for large organizations often range from several million to tens of millions of dollars annually. Given the fixed-price nature and the duration, this contract appears to be priced competitively, assuming the scope of work is standard for computer systems design. However, without detailed task orders or performance metrics, a precise value-for-money comparison is difficult.

What are the primary risks associated with this type of computer systems design services contract?

Key risks for this contract include potential scope creep, where the project's requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Technical risks are also present, such as unforeseen integration challenges with existing systems, cybersecurity vulnerabilities, or the need for specialized expertise that may be difficult to acquire. Contractor performance risk is another factor; the quality of services delivered might not meet expectations, impacting the Navy's operational capabilities. Furthermore, reliance on a single contractor for critical systems design can pose a risk if the contractor faces financial instability or undergoes significant organizational changes. Effective project management, clear communication, and robust oversight are crucial to mitigate these risks.

How effective is the fixed-price level of effort contract type in ensuring program effectiveness for IT services?

The Fixed-Price Level of Effort (FPLE) contract type aims to ensure effectiveness by defining the level of effort (e.g., hours or direct labor costs) the contractor must expend and the price for that effort. This structure provides cost certainty for the government and incentivizes the contractor to manage their resources efficiently to complete the defined scope within the budget. For IT services like computer systems design, FPLE can be effective when the scope of work is well-defined but the exact outcomes or number of hours needed are somewhat uncertain. It helps prevent cost overruns due to contractor inefficiency. However, it relies heavily on the government's ability to accurately estimate the required effort and monitor that the contractor is indeed expending the agreed-upon level of effort diligently and effectively.

What are the historical spending patterns for computer systems design services within the Department of the Navy?

The Department of the Navy consistently spends significant amounts on computer systems design and related IT services, reflecting the critical role of technology in naval operations. Historical data shows a steady demand for services that support network infrastructure, software development, cybersecurity, and data management. Spending in this category often fluctuates based on modernization initiatives, new platform procurements, and evolving technological requirements. The Navy, like other large defense agencies, frequently utilizes various contract types, including full and open competition, to procure these services, aiming to balance cost-effectiveness with access to cutting-edge solutions. The overall trend indicates a sustained and substantial investment in IT infrastructure and services to maintain operational readiness and technological superiority.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 1881 CAMPUS COMMONS DR STE 200, 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: $11,465,817

Exercised Options: $10,897,355

Current Obligation: $10,875,639

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0696M

IDV Type: FSS

Timeline