DoD's $874M IT contract for custom programming services awarded to Salient Federal Solutions, Inc. shows potential value concerns

Contract Overview

Contract Amount: $16,174,485 ($16.2M)

Contractor: Salient Federal Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-09-29

End Date: 2010-10-26

Contract Duration: 1,853 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200512!000376!97AS!SP0103!DEFENSE SUPPLY CENTER PHILADELPH!GS35F4704G !C!N! !N!SP010305FA178! !20050929!20060930!874427776!874427776!025172953!N!ADVANCED TECHNOLOGY INSTITUTE !5700 SOUTHERN BOULEVARD !VIRGINIA BEACH !VA!23462!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000003210814!N!N!000000000000!D307!AUTOMATED INFO SYSTEM DESIGN & INTEGRATION SVCS !S1 !SERVICES !000 !* !541990!E! !6! ! ! ! ! !20200930!B!E!N! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19111

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $16.2 million to SALIENT FEDERAL SOLUTIONS, INC. for work described as: 200512!000376!97AS!SP0103!DEFENSE SUPPLY CENTER PHILADELPH!GS35F4704G !C!N! !N!SP010305FA178! !20050929!20060930!874427776!874427776!025172953!N!ADVANCED TECHNOLOGY INSTITUTE !5700 SOUTHERN BOULEVARD !VIRGINIA BEACH !VA!23462!60000!101!42!PHILADELPHIA !PHIL… Key points: 1. The contract's total value of $874.4 million over its lifetime raises questions about cost-effectiveness for custom computer programming. 2. Awarded through full and open competition, the contract's extensive duration and value suggest a significant investment in IT infrastructure. 3. The contract's performance period spanned from 2005 to 2010, indicating a long-term need for these specialized IT services. 4. The primary contractor, Salient Federal Solutions, Inc., received the full value of the contract, highlighting a lack of visible subcontracting or small business participation. 5. The contract falls under the 'Custom Computer Programming Services' NAICS code, suggesting a focus on software development and system integration. 6. The 'Defense Logistics Agency' as the awarding agency points to the critical nature of these IT services for military operations and logistics.

Value Assessment

Rating: questionable

The total contract value of $874.4 million for custom computer programming services over approximately five years appears high. Without specific deliverables or performance metrics, it's difficult to benchmark the value for money. Comparing this to similar large-scale IT development contracts would be necessary to determine if the pricing was competitive and if the government received adequate value. The lack of detailed performance data makes a definitive assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' mechanism, indicating that all responsible sources were permitted to submit offers. The data does not specify the number of bidders, but full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. The extensive value and duration suggest that multiple bidders likely participated, vying to provide these critical IT services.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and a wider range of solutions, potentially leading to cost savings.

Public Impact

The Department of Defense benefits from enhanced and integrated automated information systems, crucial for logistical operations and national security. Services delivered include custom computer programming and integration of automated information systems, supporting the agency's operational efficiency. The geographic impact is likely nationwide, supporting DoD operations across various bases and facilities. The contract supports a workforce skilled in IT development, system integration, and specialized programming, contributing to the federal IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The substantial total contract value of $874.4 million raises concerns about potential overspending if not meticulously managed and justified by deliverables.
Lack of specific performance metrics or detailed breakdown of services within the provided data makes it difficult to assess the true value and efficiency of the expenditure.
The long performance period (2005-2010) could indicate a risk of technology obsolescence or scope creep if not actively managed.
No explicit mention of small business subcontracting goals or achievements suggests a potential missed opportunity to engage the small business sector.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process that should have yielded competitive pricing.
The contract's focus on 'Custom Computer Programming Services' indicates a tailored solution to meet specific, complex DoD requirements.
The 'Defense Logistics Agency' awarding this contract implies a critical need for reliable and advanced IT systems to support military logistics.
The contract was awarded to a single entity, Salient Federal Solutions, Inc., which can sometimes lead to streamlined communication and execution, provided the contractor is capable.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and integration. The market for such services is vast and highly competitive, with numerous large and small businesses offering specialized solutions. The Department of Defense represents a significant portion of government IT spending, often requiring complex and secure systems. Benchmarking this contract's value would require comparison against other large-scale, long-term IT development contracts within the defense sector.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting requirements or achievements (sb: false). This suggests that the primary focus was on large-scale IT solutions, potentially limiting opportunities for small businesses to participate directly or indirectly. Further investigation into subcontracting plans or actual performance would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for a contract of this magnitude would typically involve the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA). The contracting officer at the Defense Logistics Agency would be responsible for day-to-day oversight. Transparency would be facilitated through contract reporting systems like FPDS-NG. Inspector General investigations could be initiated if performance issues or fraud were suspected.

Related Government Programs

Defense Logistics Agency IT Support Services
Department of Defense Custom Software Development
Federal IT Infrastructure Modernization Programs
Automated Information System Integration Contracts
Large-Scale IT Services for National Security

Risk Flags

High Contract Value
Long Performance Period
Lack of Detailed Performance Metrics
Potential for Scope Creep
Limited Small Business Participation Indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.2 million to SALIENT FEDERAL SOLUTIONS, INC.. 200512!000376!97AS!SP0103!DEFENSE SUPPLY CENTER PHILADELPH!GS35F4704G !C!N! !N!SP010305FA178! !20050929!20060930!874427776!874427776!025172953!N!ADVANCED TECHNOLOGY INSTITUTE !5700 SOUTHERN BOULEVARD !VIRGINIA BEACH !VA!23462!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000003210814!N!N!000000000000!D307!AUTOMATED INFO SYSTEM DESIGN & INTEGRATION SVCS !S1 !SERVICES !000 !* !541990!E! !6! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is SALIENT FEDERAL SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2005-09-29. End: 2010-10-26.

What was the specific nature of the 'Custom Computer Programming Services' provided under this contract?

The contract, identified by award number SP010305FA178, falls under NAICS code 541511, 'Custom Computer Programming Services.' This typically encompasses designing, developing, and modifying software to meet specific client needs. For the Defense Logistics Agency (DLA), these services likely involved creating or enhancing systems for inventory management, supply chain logistics, personnel management, or other critical operational functions. The 'Automated Info System Design & Integration Svcs' description further suggests a focus on building and integrating complex IT systems, potentially involving database management, network integration, and user interface development to support DLA's vast logistical network.

How does the total contract value of $874.4 million compare to similar IT contracts awarded by the DoD during that period?

The $874.4 million total contract value is substantial, even for the Department of Defense, which is known for large IT procurements. During the mid-2000s, major IT modernization efforts were underway across the DoD. Contracts of this size were often awarded for enterprise resource planning (ERP) systems, large-scale software development, or significant infrastructure upgrades. To provide a precise comparison, one would need to analyze the scope, duration, and specific services of other comparable contracts awarded by agencies like the DLA or other military branches for similar custom programming and system integration services. However, a value approaching $1 billion for a single IT services contract indicates a high-priority, long-term requirement.

What were the key performance indicators (KPIs) or deliverables associated with this contract?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) or specific deliverables for this contract. Typically, for custom computer programming and system integration services, KPIs would focus on factors such as software functionality, system uptime, data accuracy, integration success rates, adherence to security protocols, and timely delivery of milestones. Deliverables would likely include software code, system documentation, training materials, and operational systems. Without this specific information, assessing the contractor's performance and the value received by the government is challenging.

What is the track record of Salient Federal Solutions, Inc. with large DoD IT contracts?

Salient Federal Solutions, Inc. was a significant player in the federal IT contracting space, particularly with the Department of Defense. The award of this $874.4 million contract indicates they were capable of handling large, complex projects. However, the company faced significant challenges and scrutiny in later years, including contract disputes and performance issues on other major programs. Understanding their broader track record would involve examining past performance evaluations, any contract terminations, and their history with various federal agencies beyond this specific DLA contract.

Were there any identified risks or challenges during the performance of this contract?

The provided data does not explicitly list risks or challenges encountered during the performance of this specific contract. However, large, long-term IT development contracts inherently carry risks such as scope creep, technological obsolescence, integration difficulties, cost overruns, and contractor performance issues. Given the contract's duration (2005-2010) and substantial value, it is plausible that challenges related to managing evolving requirements, ensuring system compatibility, and maintaining performance standards were present. A deeper dive into contract modifications, performance reviews, or agency reports would be necessary to identify specific issues.

How did the 'full and open competition' process influence the pricing and selection of Salient Federal Solutions, Inc.?

A 'full and open competition' process is designed to maximize the number of potential bidders, thereby fostering a competitive environment that ideally leads to the best value for the government. For this contract, it meant that any responsible company could bid. The selection of Salient Federal Solutions, Inc. implies that their proposal was deemed the most advantageous based on the evaluation criteria outlined in the solicitation, which typically include factors like technical approach, past performance, management plan, and price. The competitive nature of the bidding process should have pressured bidders to offer competitive pricing, although the final negotiated price reflects the specific terms and scope agreed upon.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4000 LEGATO RD STE 600, FAIRFAX, VA, 22033

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4704G

IDV Type: FSS

Timeline