DoD's $27.5M contract for Stock Control Systems support awarded to Interactive Process Technology, LLC

Contract Overview

Contract Amount: $27,512,710 ($27.5M)

Contractor: Interactive Process Technology, LLC

Awarding Agency: Department of Defense

Start Date: 2014-11-18

End Date: 2023-06-08

Contract Duration: 3,124 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF ACAT III SERVICES TO PROVIDE OPERATIONS, MAINTENANCE, SUSTAINMENT SUPPORT FOR STOCK CONTROL SYSTEMS (SCS)

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20878

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to INTERACTIVE PROCESS TECHNOLOGY, LLC for work described as: IGF::OT::IGF ACAT III SERVICES TO PROVIDE OPERATIONS, MAINTENANCE, SUSTAINMENT SUPPORT FOR STOCK CONTROL SYSTEMS (SCS) Key points: 1. Value for money appears fair given the extended contract duration and cost-plus-fixed-fee structure. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting a robust bidding process. 3. Risk indicators include the cost-plus-fixed-fee contract type, which can incentivize cost overruns if not managed tightly. 4. Performance context is for operations, maintenance, and sustainment of critical Stock Control Systems. 5. Sector positioning is within IT services, specifically custom computer programming and IT support.

Value Assessment

Rating: fair

The contract's total value of approximately $27.5 million over its duration suggests a moderate investment for IT sustainment services. Benchmarking against similar IT support contracts for defense systems is challenging without more specific service details. However, the cost-plus-fixed-fee (CPFF) structure, while common for complex IT projects, carries inherent risks of cost escalation if not meticulously managed by the government. The fixed fee component provides some cost certainty for the contractor's profit, but the overall cost is variable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was initially intended to be fully open, certain sources were excluded, potentially due to specific technical requirements or prior performance issues. The presence of 3 bidders suggests a reasonable level of competition, though the exclusion of sources might limit the breadth of market participation and potentially impact price discovery.

Taxpayer Impact: The competitive process, even with exclusions, aims to secure the best value for taxpayers. A moderate number of bidders can lead to competitive pricing, but the specific nature of the exclusions warrants scrutiny to ensure no viable, cost-effective sources were unfairly barred.

Public Impact

The Department of the Air Force benefits from the continued operation and maintenance of its Stock Control Systems. Services delivered include operations, maintenance, and sustainment support, crucial for inventory management. The geographic impact is likely concentrated within Air Force installations that rely on these systems. Workforce implications include the need for skilled IT professionals to manage and support the Stock Control Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
The 'after exclusion of sources' clause in competition requires understanding the rationale for exclusions.
Long contract duration (over 8 years) increases the risk of technological obsolescence or changing requirements.

Positive Signals

Awarded after a competitive process, indicating some level of market vetting.
Interactive Process Technology, LLC has a contract history with the government, suggesting some familiarity with federal requirements.
Sustainment support is critical for maintaining the functionality of essential systems.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on custom computer programming and IT support. The market for defense IT sustainment is substantial, with agencies like the Department of Defense consistently investing in maintaining and upgrading complex systems. Comparable spending benchmarks would involve looking at other large-scale IT sustainment contracts for critical infrastructure or logistics systems within the federal government, particularly those managed by military branches.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through this award. The primary contractor, Interactive Process Technology, LLC, would determine any subcontracting opportunities based on their own business strategy and project needs, rather than a federal requirement tied to this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to track expenditures and ensure costs remain reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency (DLA) IT Support Contracts
Air Force Enterprise Resource Planning (ERP) Systems
Department of Defense Supply Chain Management IT
Custom Software Development Services for Government

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of technological obsolescence given the long contract duration.
Need to verify justification for 'exclusion of sources' in competition.
Ensuring adequate performance monitoring for sustainment services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to INTERACTIVE PROCESS TECHNOLOGY, LLC. IGF::OT::IGF ACAT III SERVICES TO PROVIDE OPERATIONS, MAINTENANCE, SUSTAINMENT SUPPORT FOR STOCK CONTROL SYSTEMS (SCS)

Who is the contractor on this award?

The obligated recipient is INTERACTIVE PROCESS TECHNOLOGY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2014-11-18. End: 2023-06-08.

What is the track record of Interactive Process Technology, LLC with government contracts, particularly in IT sustainment?

Interactive Process Technology, LLC has a history of receiving government contracts, primarily within the IT services domain. While specific details on their performance for this particular Stock Control Systems (SCS) contract are not provided in the summary data, their continued awards suggest a level of capability and compliance with federal procurement regulations. Further analysis would require examining past performance reviews, any contract modifications, and the scope of their previous IT sustainment work for the Department of Defense or other agencies. Understanding their experience with similar complex systems and their ability to manage cost-plus-fixed-fee contracts effectively would be crucial for a comprehensive assessment.

How does the pricing structure (Cost Plus Fixed Fee) compare to other IT sustainment contracts of similar scope?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for complex IT projects where the scope of work may evolve or is difficult to precisely define upfront, such as sustainment and maintenance of existing systems. Compared to fixed-price contracts, CPFF offers more flexibility but carries a higher risk of cost escalation for the government if not managed diligently. For similar IT sustainment contracts, agencies often use a mix of contract types. Fixed-price contracts might be used for well-defined upgrades, while CPFF or Cost Plus Incentive Fee (CPIF) are more likely for ongoing operations and maintenance where unforeseen issues can arise. The 'fixed fee' portion provides the contractor with a predetermined profit margin, incentivizing them to complete the work efficiently within the cost parameters.

What are the primary risks associated with the 'Full and Open Competition After Exclusion of Sources' award type?

The primary risks associated with 'Full and Open Competition After Exclusion of Sources' stem from the potential for reduced competition and the justification for exclusions. While it aims to ensure a competitive process, excluding specific sources might limit the pool of qualified bidders, potentially leading to higher prices or less innovative solutions if the excluded entities were strong contenders. The government must have a clear, documented, and justifiable reason for excluding any potential bidder to avoid protests and ensure fairness. Risks include the possibility that the excluded sources possessed unique capabilities or offered more competitive pricing. Understanding the criteria for exclusion is key to assessing whether the competition truly represented the best value available in the market.

What is the expected impact of this contract on the operational readiness of the Air Force's logistics and supply chain?

This contract is critical for maintaining the operational readiness of the Air Force's logistics and supply chain by ensuring the Stock Control Systems (SCS) function effectively. The SCS are fundamental to tracking inventory, managing stock levels, and facilitating the movement of supplies. Continuous operations, maintenance, and sustainment support provided under this contract prevent system downtime, data corruption, and performance degradation. Without this support, the Air Force could face significant disruptions in its ability to manage assets, fulfill requisitions, and maintain necessary stock levels, directly impacting mission effectiveness and readiness across various operations.

How has historical spending on Stock Control Systems support evolved over time, and does this contract represent a significant shift?

Historical spending data on Stock Control Systems (SCS) support is not provided in the summary. However, IT sustainment contracts, especially for critical defense systems, typically represent a consistent and significant portion of defense IT budgets. The evolution of spending often reflects upgrades to technology, changes in system complexity, and shifts in contracting strategies. A contract valued at $27.5 million over approximately 8 years ($3.4M/year average) for sustainment suggests a substantial, ongoing investment. Without historical context, it's difficult to determine if this represents a significant shift, but it indicates a sustained commitment to maintaining these vital systems. Trends in defense IT spending often show increasing costs due to system complexity and cybersecurity requirements.

What are the potential implications of the contract's long duration (over 8 years) on technological relevance and adaptability?

The contract's long duration of over 8 years (3124 days) presents both opportunities and risks regarding technological relevance and adaptability. On the positive side, it allows for long-term planning, stable support, and the potential for deep system knowledge to develop within the contractor. However, it also increases the risk of the supported technology becoming obsolete or insufficient to meet evolving Air Force requirements. The CPFF structure might allow for incorporating technological upgrades, but the government must actively manage the contract to ensure the systems remain current and adaptable. Without proactive management and potential contract modifications, the long duration could lock the Air Force into supporting legacy systems longer than optimal.

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Interactive Process Technology LLC

Address: 1500 DISTRICT AVE, BURLINGTON, MA, 01803

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Service Disabled Veteran Owned Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $30,465,269

Exercised Options: $27,853,231

Current Obligation: $27,512,710

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877112D1007

IDV Type: IDC

Timeline