NRC awards $10.8M for document processing, raising questions about value and competition

Contract Overview

Contract Amount: $10,881,956 ($10.9M)

Contractor: National Interest Security Company LLC

Awarding Agency: Nuclear Regulatory Commission

Start Date: 2003-12-03

End Date: 2008-09-05

Contract Duration: 1,738 days

Daily Burn Rate: $6.3K/day

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: IT

Official Description: DOCUMENT PROCESSING CENTER SUPPORT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Nuclear Regulatory Commission obligated $10.9 million to NATIONAL INTEREST SECURITY COMPANY LLC for work described as: DOCUMENT PROCESSING CENTER SUPPORT SERVICES Key points: 1. Contract value appears high relative to duration, suggesting potential for cost inefficiencies. 2. Limited competition may have led to suboptimal pricing and reduced taxpayer value. 3. Lack of clear performance metrics or benchmarks makes assessing effectiveness difficult. 4. The contract's long duration (over 4 years) could indicate a need for stable, long-term support. 5. Sole-source award warrants scrutiny regarding justification and potential alternatives. 6. Focus on custom computer programming services suggests specialized technical requirements.

Value Assessment

Rating: questionable

The total contract value of $10.8 million over approximately 1738 days (roughly 4.7 years) averages to about $2.3 million per year. Without specific deliverables or performance data, it's challenging to benchmark this against similar contracts. However, the lack of competition and the nature of the services (document processing support) suggest that the pricing may not have been rigorously tested against market alternatives. The 'COST NO FEE' award type, while sometimes appropriate for specific government-furnished equipment or services, needs careful justification to ensure it doesn't lead to cost overruns without commensurate value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. The justification for this approach is not provided in the data, but it typically implies that only one source was found to be capable of meeting the requirement, or that it was deemed necessary for reasons of urgency, national security, or unique expertise. The lack of open competition means that the government did not benefit from a range of proposals and potentially lower prices that could have resulted from a competitive bidding process.

Taxpayer Impact: Sole-source awards can be less advantageous for taxpayers as they eliminate the downward pressure on pricing that competition provides. This can result in higher costs for government services.

Public Impact

The Nuclear Regulatory Commission (NRC) benefits from this contract by receiving essential support for its document processing operations. Services delivered likely include managing, organizing, and retrieving critical documents related to the NRC's regulatory functions. The geographic impact is primarily within the NRC's operational areas, likely supporting its headquarters or regional offices in Maryland. Workforce implications are minimal for the public, but the contractor's employees provide specialized support to the agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for taxpayers.
Lack of detailed performance metrics makes it difficult to assess the effectiveness and efficiency of the services provided.
The 'COST NO FEE' award type requires careful monitoring to prevent uncontrolled cost growth.
Long contract duration without clear performance reviews could lead to complacency or outdated service delivery.

Positive Signals

The contract ensures continuity of essential document processing services for the NRC.
The contractor, National Interest Security Company LLC, has a long-standing relationship with the NRC, suggesting reliability.
The specific NAICS code (541511) indicates a focus on specialized IT services, potentially meeting unique agency needs.

Sector Analysis

The contract falls under the IT services sector, specifically Custom Computer Programming Services (NAICS 541511). This sector is characterized by high demand for specialized technical skills and solutions. The market size for IT services supporting government agencies is substantial, with agencies increasingly relying on external contractors for specialized functions. This contract represents a portion of the broader federal spending on IT support, which is critical for agency operations, data management, and regulatory compliance. Benchmarking this contract's value is difficult without more specific service details, but IT support services for federal agencies can range widely in cost depending on complexity and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The prime contractor is likely a larger entity capable of handling the scope of work. Analysis of subcontracting opportunities would require further investigation into the prime contractor's practices.

Oversight & Accountability

Oversight for this contract would primarily reside with the Nuclear Regulatory Commission's contracting officers and program managers. The 'COST NO FEE' award type necessitates robust financial oversight to ensure costs remain reasonable and justified. Transparency is limited by the sole-source nature of the award and the lack of publicly available performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Services Contracts
Document Management Systems
Custom Software Development
NRC Operational Support
Government IT Outsourcing

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of performance metrics hinders effectiveness assessment.
'COST NO FEE' award type requires vigilant oversight to control costs.
Limited public information on service specifics and justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Nuclear Regulatory Commission awarded $10.9 million to NATIONAL INTEREST SECURITY COMPANY LLC. DOCUMENT PROCESSING CENTER SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is NATIONAL INTEREST SECURITY COMPANY LLC.

Which agency awarded this contract?

Awarding agency: Nuclear Regulatory Commission (Nuclear Regulatory Commission).

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2003-12-03. End: 2008-09-05.

What specific document processing services were included under this contract, and what were the key performance indicators (KPIs)?

The provided data identifies the contract's purpose as 'DOCUMENT PROCESSING CENTER SUPPORT SERVICES' and categorizes it under NAICS code 541511 (Custom Computer Programming Services). However, it does not detail the specific services rendered beyond this general description, nor does it list any Key Performance Indicators (KPIs) or metrics used to evaluate the contractor's performance. Without this information, it is impossible to assess the quality, efficiency, or effectiveness of the document processing support provided. Understanding the specific tasks, such as digitization, indexing, archival, retrieval, or data entry, along with associated service levels (e.g., turnaround times, accuracy rates), would be crucial for a comprehensive value assessment.

Can the 'COST NO FEE' award type be justified for these document processing services, and what were the cost controls in place?

The 'COST NO FEE' (CNF) award type is unusual for support services and typically applies when the government provides all necessary facilities, equipment, and materials, and the contractor's role is primarily labor. For document processing, it's unclear why this structure would be chosen over a fixed-price or cost-plus-incentive-fee contract, which are more common for such services. A CNF contract requires stringent government oversight to prevent cost overruns, as the contractor is reimbursed for all allowable costs without a pre-defined profit margin. The justification for this award type and the specific cost control mechanisms employed by the NRC are not detailed in the provided data, making it difficult to assess the financial prudence of this approach.

What was the rationale for awarding this contract on a sole-source basis, and were any alternative sources considered?

The data explicitly states this contract was awarded on a sole-source basis ('l': 'sole-source'). The rationale for this decision is not provided. Typically, sole-source awards are justified when only one responsible source can satisfy the agency's needs, or in cases of urgency, national security, or when a public-private partnership is deemed necessary. For IT services like document processing, open competition usually yields better pricing and a wider range of solutions. The absence of a competitive process here means potential savings and innovative approaches from other vendors were likely forgone. A thorough review would require examining the government's justification documentation for this sole-source determination.

How does the annual cost of this contract compare to industry benchmarks for similar document processing and IT support services?

The total contract value is approximately $10.8 million over roughly 4.7 years, equating to an annual average of about $2.3 million. Benchmarking this figure is challenging without specific details on the scope, volume, and complexity of the document processing tasks, as well as the level of IT support provided. However, given the sole-source nature and the 'COST NO FEE' structure, there's a risk that this annual cost might be higher than what could be achieved through a competitive process. Industry benchmarks for IT support and document management vary significantly based on factors like the number of documents processed, digitization requirements, data security protocols, and the specific software solutions employed.

What is the track record of National Interest Security Company LLC in performing similar government contracts, particularly with the NRC?

The data indicates that National Interest Security Company LLC (co: 'NATIONAL INTEREST SECURITY COMPANY LLC') was awarded this contract. While the data doesn't provide a detailed history of their performance, the contract start date (2003-12-03) and end date (2008-09-05) suggest a long-standing relationship with the NRC, spanning over four years. This duration could imply satisfactory performance, as agencies often extend or re-award contracts to vendors they trust. However, without specific performance reviews, past performance ratings, or details on other contracts they've held, a comprehensive assessment of their track record is not possible from the given information.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Contractor Details

Parent Company: International Business Machines Corporation (UEI: 001368083)

Address: 310 STATE ROUTE 956, KEYSER, WV, 02

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,004,195

Exercised Options: $12,004,195

Current Obligation: $10,881,956

Parent Contract

Parent Award PIID: GS35F0522J

IDV Type: FSS

Timeline