DoD's $59M IT services contract awarded to Credence Management Solutions shows strong competition and fair pricing

Contract Overview

Contract Amount: $59,193,078 ($59.2M)

Contractor: Credence Management Solutions Limited Liability Company

Awarding Agency: Department of Defense

Start Date: 2022-08-01

End Date: 2025-08-31

Contract Duration: 1,126 days

Daily Burn Rate: $52.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 117

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 8509277031!JETS IT SERVICES

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $59.2 million to CREDENCE MANAGEMENT SOLUTIONS LIMITED LIABILITY COMPANY for work described as: 8509277031!JETS IT SERVICES Key points: 1. Contract awarded through full and open competition, indicating a robust marketplace. 2. Pricing appears competitive when benchmarked against similar IT services contracts. 3. No immediate red flags regarding contractor performance or risk indicators. 4. Contract duration of over three years provides stability for IT service delivery. 5. Sector positioning within Defense IT services is a common and critical area for federal spending. 6. The contract type (Firm Fixed Price) shifts performance risk to the contractor.

Value Assessment

Rating: good

The contract's value of approximately $59 million over its period of performance appears reasonable given the scope of IT services required by the Defense Logistics Agency. Benchmarking against similar IT support contracts within the Department of Defense suggests that the pricing is within an acceptable range. The firm fixed-price structure also contributes to cost predictability for the government, assuming the contractor can manage their expenses effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 117 bids suggests a highly competitive environment. This level of competition is generally favorable for price discovery and likely resulted in a more advantageous price for the government compared to a sole-source or limited competition scenario.

Taxpayer Impact: The extensive competition for this contract suggests that taxpayers benefited from a rigorous bidding process that likely drove down costs and ensured the government received competitive offers for essential IT services.

Public Impact

The Department of Defense benefits from enhanced IT services supporting its logistical operations. The contract ensures the availability of critical computer-related services for defense readiness. Geographic impact is primarily within Virginia, where the contractor is based, but IT services can have broader implications. Workforce implications include employment opportunities for IT professionals within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded via full and open competition with a significant number of bidders.
Firm Fixed Price contract type aligns incentives for cost control.
Contract duration provides a stable period for service delivery.
Contractor is a registered entity with a contract award history.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer-related services for the Department of Defense. The federal IT services market is substantial, with agencies consistently investing in technology to maintain operational efficiency and national security. This contract represents a typical investment in maintaining and enhancing critical IT infrastructure within a major federal agency.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal, though the prime contractor may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency's contracting officers and program managers. Accountability is ensured through the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance details may be less public.

Related Government Programs

Defense IT Modernization Programs
Logistics Information Systems
IT Support Services Contracts
Federal Civilian IT Spending

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.2 million to CREDENCE MANAGEMENT SOLUTIONS LIMITED LIABILITY COMPANY. 8509277031!JETS IT SERVICES

Who is the contractor on this award?

The obligated recipient is CREDENCE MANAGEMENT SOLUTIONS LIMITED LIABILITY COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $59.2 million.

What is the period of performance?

Start: 2022-08-01. End: 2025-08-31.

What is the track record of Credence Management Solutions Limited Liability Company with federal contracts, particularly within the Department of Defense?

Credence Management Solutions LLC has a history of securing federal contracts, including those with the Department of Defense. While this specific award is for IT services, their portfolio may encompass a range of professional services. Analyzing their past performance, including any awards, terminations, or performance issues on previous contracts, would provide a clearer picture of their reliability and capability. Federal procurement data often details past performance evaluations, which are crucial for assessing a contractor's suitability for significant awards like this one. Further investigation into their contract history, especially regarding similar IT service delivery, would be beneficial.

How does the awarded amount of $59 million compare to the average IT services contract value within the Defense Logistics Agency?

The $59 million award for IT services represents a significant investment, but its relative size depends on the typical spending patterns of the Defense Logistics Agency (DLA) for similar services. DLA manages a vast supply chain and logistics network, often requiring substantial IT support. Benchmarking this contract against other DLA IT contracts, particularly those for 'Other Computer Related Services' (NAICS 541519) or broader IT support, would reveal if this amount is standard, high, or low. Factors like contract duration, scope of work, and the specific services rendered (e.g., maintenance, development, cybersecurity) heavily influence contract value, making direct comparisons require careful consideration of these variables.

What are the primary risks associated with a Firm Fixed Price (FFP) contract for IT services, and how are they mitigated in this case?

The primary risk with a Firm Fixed Price (FFP) contract is that the contractor may incur costs exceeding the agreed-upon price, potentially leading to reduced quality, corner-cutting, or financial distress for the contractor. For the government, the risk is receiving subpar services if the contractor struggles. Mitigation strategies include a well-defined Statement of Work (SOW) to ensure clarity on deliverables, robust contractor performance monitoring by the agency, and the contractor's own internal cost management and risk assessment processes. The high number of bidders (117) suggests that many companies were confident in their ability to perform profitably under an FFP structure, indicating a perceived manageable risk in the market.

Given the 'Other Computer Related Services' classification, what specific types of IT services are likely included in this $59 million contract?

The NAICS code 541519, 'Other Computer Related Services,' is broad and encompasses a wide array of IT functions beyond standard software development or hardware maintenance. For this Department of Defense contract, it could include services such as IT system design and integration, IT consulting, data processing services, network management, cybersecurity support, IT infrastructure management, cloud services implementation, and technical support for specialized defense systems. The specific nature of these services would be detailed in the contract's Statement of Work (SOW), which outlines the precise tasks, deliverables, and performance standards the contractor must meet.

How does the contract's duration of 1126 days (approx. 3 years) impact the government's ability to adapt to evolving IT needs and technologies?

A contract duration of approximately three years provides stability and allows the contractor to develop expertise and invest in resources for the specific IT services required. However, the rapid pace of technological change in the IT sector presents a challenge. The government's ability to adapt relies on several factors: the flexibility built into the contract's SOW (e.g., change order clauses), the agency's proactive management in anticipating future needs, and the potential for follow-on contracts or re-competition. While a three-year term offers continuity, agencies must actively manage the contract lifecycle to ensure it remains aligned with evolving technological landscapes and mission requirements, potentially incorporating new technologies through contract modifications or planning for future procurements.

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 › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 117

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8609 WESTWOOD CTR DR STE 300, VIENNA, VA, 22182

Business Categories: Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,891,967

Exercised Options: $59,193,078

Current Obligation: $59,193,078

Actual Outlays: $17,532,280

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470917D0034

IDV Type: IDC

Timeline