Treasury's $33.3M IT Services Contract with WYLE Information Systems: A Cost Plus Award Fee Analysis
Contract Overview
Contract Amount: $33,277,283 ($33.3M)
Contractor: Wyle Information Systems, LLC
Awarding Agency: Department of the Treasury
Start Date: 2007-03-23
End Date: 2011-12-15
Contract Duration: 1,728 days
Daily Burn Rate: $19.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: PROVIDE INFORMATION TECHNOLOGY SERVICES AND MAINTENANCE SUPPORT SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005, UNITED STATES OF AMERICA
Plain-Language Summary
Department of the Treasury obligated $33.3 million to WYLE INFORMATION SYSTEMS, LLC for work described as: PROVIDE INFORMATION TECHNOLOGY SERVICES AND MAINTENANCE SUPPORT SERVICES Key points: 1. Contract awarded to WYLE INFORMATION SYSTEMS, LLC for IT services. 2. Total value of $33.3M over 1728 days. 3. Procured under Full and Open Competition. 4. Contract type is Cost Plus Award Fee (CPAF). 5. No small business participation noted.
Value Assessment
Rating: fair
The Cost Plus Award Fee structure can incentivize performance but may lead to higher costs if award fees are consistently high. Benchmarking against similar IT services contracts is needed to assess if the total cost, including potential award fees, is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and Open Competition was utilized, suggesting a broad market search. However, the CPAF structure requires careful monitoring to ensure that award fees are justified by exceptional performance and do not inflate the overall price beyond market rates.
Taxpayer Impact: Taxpayer funds are utilized. The CPAF structure necessitates robust oversight to ensure award fees are earned through demonstrable value and performance, preventing unnecessary cost escalation.
Public Impact
Ensures continued IT operations and maintenance for the Bureau of the Fiscal Service. Supports critical government functions through technology services. Potential for performance-based incentives to drive contractor efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure requires strong oversight to manage costs.
- Lack of small business participation.
Positive Signals
- Full and Open Competition utilized.
- Contract duration of nearly 4.8 years provides stability.
Sector Analysis
This contract falls under Computer Systems Design Services (NAICS 541512), a common category for government IT support. Spending benchmarks for similar IT services contracts vary widely based on scope and complexity, but $33.3M over nearly 5 years suggests a significant, long-term engagement.
Small Business Impact
The data indicates no small business participation in this contract. Agencies should actively seek opportunities to include small businesses in contracting to foster competition and support economic goals.
Oversight & Accountability
The Cost Plus Award Fee (CPAF) contract type requires diligent oversight to ensure that award fees are tied to measurable performance improvements and that costs remain reasonable. Regular performance reviews and audits are crucial for accountability.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Bureau of the Fiscal Service Programs
Risk Flags
- Potential for cost creep due to CPAF structure.
- Lack of small business participation.
- Need for strong performance metric validation.
- Requires diligent contract administration.
Tags
computer-systems-design-services, department-of-the-treasury, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $33.3 million to WYLE INFORMATION SYSTEMS, LLC. PROVIDE INFORMATION TECHNOLOGY SERVICES AND MAINTENANCE SUPPORT SERVICES
Who is the contractor on this award?
The obligated recipient is WYLE INFORMATION SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).
What is the total obligated amount?
The obligated amount is $33.3 million.
What is the period of performance?
Start: 2007-03-23. End: 2011-12-15.
What specific performance metrics were used to determine award fees, and how were they validated to ensure fair compensation and taxpayer value?
The effectiveness of award fees hinges on clearly defined, objective, and measurable performance metrics. The government must have robust processes for tracking contractor performance against these metrics and for validating the results before awarding fees. Without transparency into these metrics and validation processes, it's difficult to ascertain if the award fees truly reflect exceptional value or simply represent an increase in cost.
Given the CPAF structure, what mechanisms were in place to mitigate the risk of cost overruns and ensure the government received competitive pricing?
Mitigation strategies for CPAF contracts include establishing realistic target costs, clearly defining performance standards that trigger award fees, and implementing stringent oversight. Regular performance reviews, audits, and comparison of contractor costs against industry benchmarks are essential. The government must actively manage the contract to ensure that award fees are earned through superior performance, not simply as a cost-plus mechanism.
How effectively did the 'Full and Open Competition' process ensure a competitive landscape and drive down costs for these IT services?
Full and Open Competition is designed to maximize competition, theoretically leading to better prices and services. However, the effectiveness depends on the specific requirements, the number of bidders, and the contract type. For this CPAF contract, the competition's success in driving down costs would be evident if multiple qualified bidders participated and if the final negotiated price, including potential award fees, was demonstrably competitive against market rates.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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
Solicitation ID: DOT-TTB-2007-C-2534
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wyle Services Corporation (UEI: 963281881)
Address: 1600 INTERNATIONAL DR STE 800, MC LEAN, VA, 22102
Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Small Business
Financial Breakdown
Contract Ceiling: $33,277,283
Exercised Options: $33,277,283
Current Obligation: $33,277,283
Parent Contract
Parent Award PIID: 263010088
IDV Type: IDC
Timeline
Start Date: 2007-03-23
Current End Date: 2011-12-15
Potential End Date: 2013-09-29 00:00:00
Last Modified: 2015-09-17
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