DoD's $182.7M SAP WMS contract awarded to Alamo City Engineering Services, Inc. for IT services

Contract Overview

Contract Amount: $182,694,945 ($182.7M)

Contractor: Alamo City Engineering Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-05-24

End Date: 2023-09-10

Contract Duration: 1,204 days

Daily Burn Rate: $151.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAP WMS CONSOLIDATED EFFORT

Place of Performance

Location: NEW CUMBERLAND, CUMBERLAND County, PENNSYLVANIA, 17070

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $182.7 million to ALAMO CITY ENGINEERING SERVICES, INC. for work described as: SAP WMS CONSOLIDATED EFFORT Key points: 1. Contract value represents a significant investment in logistics and supply chain management IT. 2. The contract was awarded under full and open competition, suggesting a robust bidding process. 3. The duration of the contract (over 3 years) indicates a long-term need for these services. 4. Fixed-price contract type helps manage cost certainty for the government. 5. The award falls within the 'Other Computer Related Services' NAICS code, a broad category. 6. The contract's performance period spans a significant portion of recent years, reflecting ongoing support.

Value Assessment

Rating: good

The contract value of approximately $182.7 million over its period of performance appears reasonable for a large-scale IT services contract supporting a critical defense agency. Benchmarking against similar large IT modernization or system implementation contracts within the Department of Defense suggests that the overall investment is within expected ranges for such complex projects. The firm fixed-price structure provides cost predictability, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a competitive environment, though the exact number of bids received is not detailed. A competitive award process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and solutions, driving down costs and improving service quality.

Public Impact

The primary beneficiaries are the Department of Defense and the Defense Logistics Agency, which will receive enhanced IT support for their supply chain management systems. The services delivered are crucial for maintaining the efficiency and effectiveness of military logistics operations. The geographic impact is likely nationwide, supporting DoD operations across various bases and facilities. Workforce implications may include the need for specialized IT personnel within the contractor organization and potential impacts on government IT staff managing the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the system becomes highly customized and difficult to transition.
Reliance on a single contractor for critical IT infrastructure could pose risks if performance degrades.
The broad NAICS code 'Other Computer Related Services' might obscure the specific nature of the IT work performed.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type provides cost certainty.
Long contract duration suggests a sustained need and potentially stable support.
Awarded to a single contractor, potentially allowing for focused expertise and streamlined management.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software and system support for supply chain management. The market for large-scale IT services supporting government agencies is substantial, with significant spending allocated to modernization and maintenance of critical systems. Comparable spending benchmarks for enterprise resource planning (ERP) or warehouse management system (WMS) implementations and support within the federal government often run into hundreds of millions of dollars over several years, making this contract's value align with industry norms for such projects.

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 for small businesses stemming from a set-aside requirement. The primary contractor, Alamo City Engineering Services, Inc., is likely a mid-to-large-sized business given the contract value. The absence of a small business set-aside means opportunities for small business participation would depend on the prime contractor's subcontracting plan, if any.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency's contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract structure, which ties payment to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency IT Support Services
Department of Defense Supply Chain Management Systems
Federal Civilian and Defense IT Modernization Efforts
Enterprise Resource Planning (ERP) System Support Contracts

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of performance degradation impacting critical logistics operations.
Dependence on a single vendor for essential IT services.
Limited competition may impact long-term price optimization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $182.7 million to ALAMO CITY ENGINEERING SERVICES, INC.. SAP WMS CONSOLIDATED EFFORT

Who is the contractor on this award?

The obligated recipient is ALAMO CITY ENGINEERING SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $182.7 million.

What is the period of performance?

Start: 2020-05-24. End: 2023-09-10.

What is the specific nature of the 'SAP WMS CONSOLIDATED EFFORT' and its criticality to the Defense Logistics Agency?

The 'SAP WMS CONSOLIDATED EFFORT' contract likely pertains to the implementation, maintenance, and enhancement of a Supply Chain Management (SCM) and Warehouse Management System (WMS) utilizing SAP software for the Defense Logistics Agency (DLA). SAP is a leading enterprise resource planning (ERP) software provider, and its WMS modules are designed to manage and optimize warehouse operations, including inventory tracking, order fulfillment, and logistics. The criticality of such a system to the DLA cannot be overstated; the DLA is responsible for providing essential logistics support, including supply, acquisition, and transportation services, to the U.S. military. An efficient and reliable WMS is fundamental to ensuring that the right supplies reach the right place at the right time, supporting military readiness and operational effectiveness. Failures or inefficiencies in this system could lead to supply chain disruptions, increased costs, and potential mission impacts.

How does the $182.7 million contract value compare to other large IT service contracts within the Department of Defense?

The $182.7 million contract value for the SAP WMS Consolidated Effort is substantial, placing it among significant IT investments within the Department of Defense (DoD). Large-scale IT modernization, system implementation, and sustainment contracts within the DoD frequently range from tens of millions to hundreds of millions, and sometimes billions, of dollars over their lifecycles. For instance, major enterprise software implementations (like ERP systems) or cybersecurity initiatives often command similar or higher figures. When compared to other contracts for IT services, particularly those involving complex system integration, software development, and long-term support for critical infrastructure, this contract's value appears commensurate with the scope and duration of services typically required by a major defense agency like the DLA. It reflects the significant resources dedicated to maintaining and improving the technological backbone of military logistics.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

While firm fixed-price (FFP) contracts offer cost certainty to the government, they can introduce risks for the contractor, which may be indirectly borne by the government if not managed properly. For a contract of this magnitude ($182.7M) and duration (over 3 years), the primary risk is that unforeseen technical challenges, scope creep (if not rigorously controlled), or market changes could significantly impact the contractor's profitability. If the contractor underestimates costs or encounters unexpected complexities, they might cut corners on quality or service to maintain margins, potentially affecting system performance or reliability. Conversely, if the contractor significantly overestimates costs due to uncertainty, the government might end up paying a premium. Effective contract management, clear scope definition, and robust performance monitoring are crucial to mitigate these risks and ensure the government receives the intended value.

Given the award was 'FULL AND OPEN COMPETITION' with 2 bidders, what does this suggest about the market for these specialized IT services?

An award under 'full and open competition' signifies that the solicitation was broadly advertised, allowing any qualified vendor to submit a proposal. The fact that only two bids were received, while still competitive, might suggest a few possibilities regarding the market for these specialized IT services. It could indicate that the market is relatively concentrated, with only a few companies possessing the specific expertise, security clearances, and capacity to handle a contract of this size and complexity for the DLA. Alternatively, the bidding process itself might have been highly demanding, or the specific requirements may have narrowed the field of potential bidders. While two bidders ensure some level of competition, a larger number typically provides stronger price discovery and a wider range of innovative solutions. This scenario warrants monitoring to ensure continued competitive pressure and value for the government.

What is the historical spending pattern for similar SAP WMS or DLA IT support contracts?

Analyzing historical spending patterns for similar contracts is crucial for context. While specific historical data for this exact 'SAP WMS Consolidated Effort' is not provided, we can infer trends. The DLA has consistently invested heavily in IT modernization and logistics systems. Contracts for large-scale ERP and WMS implementations and sustainment are typically multi-year and represent significant portions of agency IT budgets. Previous awards for DLA IT support, especially those involving core logistics functions and enterprise systems, would likely show multi-million dollar annual expenditures. The $182.7 million over approximately 1204 days (roughly 3.3 years) averages around $55 million per year. This annual spend is consistent with the ongoing costs associated with maintaining, supporting, and potentially upgrading complex enterprise IT systems for a major federal agency. Tracking prior contract values for similar services would reveal if this award represents an increase, decrease, or stable level of investment in DLA's IT infrastructure.

What are the implications of the NAICS code 541519 ('Other Computer Related Services') for understanding this contract's scope?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specifically classified under other codes like custom programming, computer facilities management, or data processing. For this contract, it suggests that the services provided by Alamo City Engineering Services, Inc. might be diverse, potentially including IT consulting, systems integration, software support, IT project management, and other related technical services that don't fit neatly into more specific IT NAICS codes. While this broad classification allows flexibility, it can sometimes make it challenging to precisely define the contract's core activities and benchmark spending against more narrowly defined IT service categories. Understanding the specific tasks within the 'SAP WMS CONSOLIDATED EFFORT' statement of work is essential to fully grasp the scope beyond the general NAICS code.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SP470120Q0016

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Alamo City Engineering Services Inc.

Address: 101 KENDALIA CIR, SPRING BRANCH, TX, 78070

Business Categories: Category Business, HUBZone Firm, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $242,933,049

Exercised Options: $242,933,049

Current Obligation: $182,694,945

Actual Outlays: $169,695,745

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0598S

IDV Type: FSS

Timeline