State Department's $49M IT Services Contract Awarded to Creative Information Technology, Inc

Contract Overview

Contract Amount: $48,974,448 ($49.0M)

Contractor: Creative Information Technology, Inc.

Awarding Agency: Department of State

Start Date: 2008-04-01

End Date: 2015-10-31

Contract Duration: 2,769 days

Daily Burn Rate: $17.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 6

Pricing Type: LABOR HOURS

Sector: IT

Official Description: ENTERPRISE ENGINEERING SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20522

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $49.0 million to CREATIVE INFORMATION TECHNOLOGY, INC. for work described as: ENTERPRISE ENGINEERING SERVICES Key points: 1. Contract awarded through a competitive process, suggesting potential for price discovery. 2. Duration of over 2300 days indicates a long-term need for these services. 3. The contract's value of approximately $49 million over its life suggests a significant investment in IT support. 4. Services fall under 'Other Computer Related Services,' a broad category. 5. The contract was a delivery order under a larger agreement, implying a structured procurement approach. 6. Focus on 'Labor Hours' pricing model can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The contract's total value of $48,974,447.60 over approximately 7 years represents a substantial investment. Benchmarking this against similar IT engineering services contracts is challenging without more specific service details. However, the 'Labor Hours' pricing model, while common, can be less predictable than fixed-price contracts and may indicate a higher risk of cost escalation if not rigorously managed. The contract's duration suggests a sustained need, but the value per year is moderate for enterprise-level IT services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The presence of 6 bidders suggests a reasonably competitive environment for this type of IT service. A competitive award generally allows for better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more cost-effective solution than if it had been awarded without broad competition.

Public Impact

The Department of State benefits from the provision of essential enterprise engineering services, likely supporting its global operations and IT infrastructure. These services are crucial for maintaining and enhancing the technological capabilities of the State Department. The contract's impact is primarily within the federal government's IT infrastructure, with potential downstream effects on diplomatic and consular services. Workforce implications are likely related to the IT professionals employed by Creative Information Technology, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Labor Hours pricing model introduces potential for cost overruns if not closely monitored.
The broad 'Other Computer Related Services' category might obscure the specific value and necessity of all services rendered.
Long contract duration (over 7 years) could lead to vendor lock-in or reduced flexibility for the agency over time.

Positive Signals

Awarded through a full and open competition, indicating a robust bidding process.
Multiple bidders (6) suggest a healthy market response and potential for competitive pricing.
The contract supports critical IT infrastructure for a major federal agency.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically under computer-related services. The market for enterprise IT services is vast and highly competitive, with numerous large and small businesses offering a wide range of solutions. Government IT spending is a significant portion of the federal budget, with agencies like the Department of State relying heavily on contractors for specialized expertise and support. Comparable spending benchmarks would depend on the specific nature of the engineering services, but contracts of this value are common for large-scale IT support.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Creative Information Technology, Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data. The absence of a small business set-aside means that opportunities for small businesses to participate in this contract are dependent on the prime contractor's subcontracting strategy, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of State. Accountability measures are embedded in the contract terms, performance metrics, and payment schedules. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. The Inspector General for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of State IT Modernization Programs
Federal Enterprise Architecture
IT Services and Support Contracts
Cloud Computing Services (if applicable)
Cybersecurity Services (if applicable)

Risk Flags

Labor Hours pricing model risk
Broad service category definition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $49.0 million to CREATIVE INFORMATION TECHNOLOGY, INC.. ENTERPRISE ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is CREATIVE INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $49.0 million.

What is the period of performance?

Start: 2008-04-01. End: 2015-10-31.

What specific enterprise engineering services were provided under this contract?

The provided data categorizes this contract under 'Other Computer Related Services' (NAICS 541519) and specifies the pricing model as 'Labor Hours.' However, it does not detail the specific engineering tasks performed. These could range widely, potentially including software development, systems integration, network engineering, IT infrastructure management, technical support, and cybersecurity engineering. To understand the precise services, one would need to consult the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not included in the provided data. The broad categorization suggests a general IT engineering support role rather than a highly specialized niche.

How does the $49 million contract value compare to similar IT services contracts awarded by the Department of State?

The $49 million total contract value over approximately seven years places this contract in the mid-to-large range for IT services within the Department of State. While specific comparisons require access to detailed contract databases and filtering by service type and duration, the Department of State, like other large federal agencies, procures numerous IT contracts. Contracts for enterprise resource planning (ERP) systems, large-scale network upgrades, or comprehensive cybersecurity solutions can often exceed this value significantly. Conversely, smaller, more focused IT support contracts might be valued in the single-digit millions. This contract appears to represent a substantial, but not exceptionally large, investment in ongoing IT engineering support.

What are the primary risks associated with a 'Labor Hours' contract of this magnitude and duration?

The primary risk with a 'Labor Hours' contract, especially one valued at $49 million over nearly seven years, is cost escalation. Unlike fixed-price contracts, the government pays for the actual time and materials spent by the contractor. If the contractor's labor rates are high, or if the project scope expands without adequate controls, or if the work is inefficiently performed, costs can significantly exceed initial estimates. Managing this risk requires rigorous oversight, detailed timesheet verification, strong performance management, and clear scope definition. The long duration also increases the risk of the technology becoming outdated or the agency's needs evolving beyond the original contract's scope, potentially requiring costly modifications or new procurements.

What is the track record of Creative Information Technology, Inc. in performing large federal IT contracts?

Creative Information Technology, Inc. (CITI) has a history of performing federal contracts, including work with agencies like the Department of State. While the provided data confirms this specific award, a comprehensive assessment of their track record would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other contract awards, and any documented issues or successes. CITI's website and public records indicate experience in various IT services. However, without access to detailed performance metrics and a broader portfolio review, it's difficult to definitively assess their track record specifically for large-scale enterprise engineering services beyond this single data point.

How does the competition level (6 bidders) impact the value proposition for the taxpayer?

A competition level of six bidders is generally considered healthy and suggests that the contract was adequately publicized and attracted significant interest from potential vendors. This level of competition typically leads to more competitive pricing as vendors vie for the award. For the taxpayer, this means a higher likelihood that the Department of State secured the enterprise engineering services at a reasonable market price. It reduces the risk of paying an inflated price that might occur in a sole-source or limited-bid scenario. The competitive process allows the government to evaluate multiple technical approaches and cost proposals, ultimately selecting the best value offering.

What are the potential implications of the 'Other Computer Related Services' classification on contract oversight?

The classification 'Other Computer Related Services' (NAICS 541519) is very broad and can encompass a wide array of IT activities. This broadness can present challenges for contract oversight. It means that the specific deliverables and performance standards might not be as clearly defined as they would be under a more specialized NAICS code. Oversight teams need to ensure that the services being provided align with the agency's actual needs and that the contractor is not billing for services that fall outside the intended scope or are not truly necessary. Detailed monitoring of the Statement of Work (SOW) and regular performance reviews are crucial to ensure accountability and prevent scope creep or inefficient service delivery under such a general classification.

Industry Classification

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

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 12709 GREENBRIAR ROAD, POTOMAC, MD, 20854

Business Categories: 8(a) Program Participant, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $59,746,402

Exercised Options: $59,746,402

Current Obligation: $48,974,448

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SAQMPD07D0090

IDV Type: IDC

Timeline