SEC awards $11.7M for data center services to Equinix, Inc. over 7 years

Contract Overview

Contract Amount: $11,684,750 ($11.7M)

Contractor: Equinix, Inc.

Awarding Agency: Securities and Exchange Commission

Start Date: 2005-01-19

End Date: 2012-01-23

Contract Duration: 2,560 days

Daily Burn Rate: $4.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: IT

Official Description: ALTERNATE DATA CENTER

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $11.7 million to EQUINIX, INC. for work described as: ALTERNATE DATA CENTER Key points: 1. Contract value represents a significant investment in critical IT infrastructure. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Long contract duration may introduce risks related to technological obsolescence. 4. Fixed Price with Economic Price Adjustment (FP-EPA) contract type allows for cost fluctuations. 5. The contract's focus on data center services aligns with the SEC's operational needs. 6. The award to a single vendor warrants scrutiny of ongoing value and performance.

Value Assessment

Rating: fair

The total award of $11.7 million over approximately 7 years (2560 days) averages to about $1.67 million per year. Benchmarking this against similar government data center contracts is challenging without more specific service details. However, the fixed-price with economic price adjustment structure suggests an attempt to balance cost certainty with market volatility. The value proposition hinges on the reliability and security of the data center services provided by Equinix, Inc., a major player in the colocation market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With 4 bids received, the competition level appears moderate. This suggests that the SEC likely received competitive pricing, although the specific number of bidders doesn't guarantee the lowest possible price without further analysis of the bids submitted and the market landscape for such services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive environment, which can lead to better pricing and service quality. The presence of multiple bidders increases the likelihood that the government is obtaining a fair market price for the data center services.

Public Impact

The Securities and Exchange Commission (SEC) benefits from reliable and secure data center infrastructure. Essential IT services supporting the SEC's mission of protecting investors and maintaining fair markets are delivered. The services are primarily located in Virginia, impacting the regional IT services sector. The contract supports jobs within the IT infrastructure and data center management fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract (7 years) may lead to technology obsolescence if not managed proactively.
Economic price adjustment clause introduces potential for cost increases beyond initial projections.
Reliance on a single vendor for critical data center services poses a concentration risk.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Equinix, Inc. is a well-established provider in the data center industry.
The contract duration aligns with the typical lifecycle of data center infrastructure investments.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on data center colocation and related services. The market for data center services is large and growing, driven by increasing data volumes and the demand for cloud computing and IT infrastructure. Equinix, Inc. is a leading global provider of data center services. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per kilowatt of power for similar colocation services in the same geographic region.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As the contract was awarded under full and open competition, it is unlikely that small businesses were exclusively targeted. However, the prime contractor, Equinix, Inc., may engage small businesses as subcontractors for various support services, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically reside with the Securities and Exchange Commission's contracting officers and program managers. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is generally maintained through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Data Center Consolidation Initiative
IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Critical Infrastructure Protection Contracts

Risk Flags

Long-term contract duration may increase risk of technology obsolescence.
Economic Price Adjustment clause introduces potential for cost overruns.
Moderate number of bidders (4) in full and open competition warrants scrutiny of price competitiveness.

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $11.7 million to EQUINIX, INC.. ALTERNATE DATA CENTER

Who is the contractor on this award?

The obligated recipient is EQUINIX, INC..

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2005-01-19. End: 2012-01-23.

What is the specific nature of the 'Other Computer Related Services' (NAICS 541519) provided under this contract?

The NAICS code 541519, 'Other Computer Related Services,' is broad and encompasses a wide range of IT services not classified elsewhere. Given the context of a data center award to Equinix, Inc., these services likely include colocation (space, power, cooling), network connectivity, managed hosting, and potentially related IT support or consulting. Without more granular detail from the contract itself, it's difficult to pinpoint the exact service mix. However, the core offering is the provision and maintenance of secure, reliable physical infrastructure for the SEC's IT equipment.

How does the average annual cost of $1.67 million compare to market rates for similar data center services in Virginia?

Determining the precise market rate comparison is complex without detailed service specifications (e.g., power density, redundancy levels, bandwidth). However, Equinix is a premium provider, and data center costs in the Northern Virginia region (a major hub) can be substantial. An average annual cost of $1.67 million for a significant data center footprint could be considered within a reasonable range for a large enterprise or government agency requiring high levels of reliability and security from a top-tier provider. A more definitive comparison would require access to Equinix's standard pricing for comparable enterprise solutions and analysis of other bids received.

What are the potential risks associated with the 'Fixed Price with Economic Price Adjustment' (FP-EPA) contract type over a 7-year period?

The FP-EPA contract type aims to protect both the contractor and the government from significant price fluctuations due to external economic factors, such as inflation or changes in utility costs. For the government, the risk is that the economic price adjustments could lead to the total cost exceeding initial projections, especially if inflation is higher than anticipated. Over a 7-year period, these adjustments can accumulate. The benefit is that it allows the government to secure services from providers who might otherwise be unwilling to commit to a fixed price over such a long duration, potentially ensuring service continuity and access to specialized infrastructure.

What is Equinix, Inc.'s track record with the federal government, particularly the SEC?

Equinix, Inc. is a major player in the data center and interconnection services market and has a significant presence serving federal government clients. They operate numerous data centers, including facilities in the Washington D.C. metropolitan area, which is relevant to the SEC's location. While this specific award is for $11.7 million, Equinix likely holds other contracts with various federal agencies. Their track record generally involves providing reliable infrastructure, but like any large provider, performance can vary. Specific performance history with the SEC would require a deeper dive into past contract data and performance reviews, if publicly available.

How does this $11.7 million award fit into the SEC's overall IT spending or data center strategy?

This $11.7 million award represents a substantial, long-term investment in the SEC's core IT infrastructure. It suggests a strategic decision to utilize external colocation services rather than building and managing all data center facilities in-house. This aligns with broader government trends towards leveraging specialized providers for infrastructure to focus on mission-critical applications and services. The duration indicates a commitment to this approach for the foreseeable future, likely supporting the SEC's ongoing operations and modernization efforts.

What are the implications of awarding this contract through 'full and open competition' with only 4 bidders?

Awarding through 'full and open competition' is a positive indicator for price discovery and taxpayer value, as it theoretically allows any qualified vendor to compete. However, receiving only 4 bids for a contract of this nature and value might suggest a few possibilities: the market for such specialized services in that specific location is limited, the barriers to entry are high, or the solicitation requirements were very specific. While 4 bidders is better than a sole-source award, a higher number of bidders often correlates with more aggressive pricing. The SEC would need to ensure the evaluation process rigorously assessed value for money among the 4 submissions.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 301 VELOCITY WAY, 5TH FLR, FOSTER CITY, CA, 15

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,684,750

Exercised Options: $11,684,750

Current Obligation: $11,684,750

Contract Characteristics

Multi-Year Contract: Yes

Timeline