VA's $13.5M IT Services Contract with Merlin International Shows Fair Competition and Long-Term Performance

Contract Overview

Contract Amount: $13,545,028 ($13.5M)

Contractor: Merlin International, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2007-09-27

End Date: 2012-09-26

Contract Duration: 1,826 days

Daily Burn Rate: $7.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HOST INTEGRATION PROGRAM

Place of Performance

Location: ENGLEWOOD, ARAPAHOE County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.5 million to MERLIN INTERNATIONAL, INC. for work described as: HOST INTEGRATION PROGRAM Key points: 1. Contract awarded through a competitive process, indicating potential for good value. 2. Long contract duration (5 years) suggests a need for sustained IT support. 3. Fixed-price contract type helps manage cost certainty for the government. 4. Services fall under 'Other Computer Related Services,' a broad IT category. 5. Performance period ended in 2012, offering historical data for analysis. 6. No small business set-aside, suggesting focus on larger, capable firms.

Value Assessment

Rating: good

The total award of $13.5 million over five years for IT services appears reasonable given the contract's scope and duration. While specific performance metrics are not detailed, the fixed-price nature of the contract suggests that the contractor bore the risk of cost overruns, which is generally favorable for the government. Benchmarking against similar IT service contracts awarded by the VA or other agencies during that period would provide a more precise value assessment, but the competitive award mechanism implies a degree of market validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a 'COMPETITIVE DELIVERY ORDER,' indicating it was competed under a broader indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar full and open solicitation. The presence of two bidders suggests a moderate level of competition. While more bidders would typically lead to better price discovery, a competitive award still provides a baseline for value compared to sole-source procurements.

Taxpayer Impact: A competitive award, even with two bidders, generally ensures that the government receives a fair market price and encourages contractors to offer competitive terms to win the business.

Public Impact

Veterans Affairs (VA) personnel likely benefited from improved IT infrastructure and support services. The contract supported 'Other Computer Related Services,' crucial for the VA's operational efficiency. Services were delivered to the VA, primarily impacting its internal operations and potentially veteran-facing systems. The contract supported IT functions, indirectly impacting the VA's workforce by providing necessary technological tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract performance ended in 2012; current relevance and cost-effectiveness are unknown without updated data.
Limited competition (2 bidders) might have restricted optimal price discovery.
The broad NAICS code (541519) makes it difficult to assess the specificity and value of the services rendered.

Positive Signals

Awarded through a competitive process, suggesting a degree of market vetting.
Fixed-price contract type aligns incentives for cost control.
Long-term performance (5 years) indicates sustained need and potential for contractor reliability.

Sector Analysis

This contract falls within the broader IT services sector, specifically 'Other Computer Related Services.' The federal IT services market is vast, with agencies like the VA being significant spenders. Contracts of this nature are essential for maintaining and upgrading the technological infrastructure that supports agency operations. Comparable spending benchmarks would involve looking at other large IT service contracts awarded to support federal healthcare providers or large civilian agencies during the late 2000s and early 2010s.

Small Business Impact

The contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scope of work or the nature of the competition favored larger, established IT service providers. Merlin International, Inc. is likely a mid-to-large-sized firm. There is no explicit information on subcontracting plans, but for a competitive delivery order of this size, it's possible that some work could have been subcontracted, though the primary awardee would be responsible for overall performance.

Oversight & Accountability

As a competitive delivery order, oversight would have been managed by the contracting officer and program officials within the Department of Veterans Affairs. Performance monitoring, acceptance of deliverables, and payment approvals are standard oversight mechanisms. Transparency is generally provided through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance period.

Related Government Programs

VA IT Modernization Programs
Federal Civilian Agency IT Support Services
Health IT Infrastructure Contracts
IT Professional Services

Risk Flags

Contract completed in 2012; current relevance and pricing are outdated.
Limited competition (2 bidders) may have impacted price optimization.
Broad NAICS code obscures specific service value.
Lack of public performance data hinders detailed assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.5 million to MERLIN INTERNATIONAL, INC.. HOST INTEGRATION PROGRAM

Who is the contractor on this award?

The obligated recipient is MERLIN INTERNATIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2007-09-27. End: 2012-09-26.

What was the specific nature of the 'Other Computer Related Services' provided under this contract?

The NAICS code 541519, 'Other Computer Related Services,' is very broad and encompasses a wide range of IT support activities beyond custom software development, computer facilities management, or IT consulting. This could include services such as IT support, help desk operations, network maintenance, data processing, disaster recovery services, or IT equipment installation and repair. Without more specific contract line item details or performance reports, it is difficult to ascertain the precise services rendered. However, given the duration and value, it likely involved comprehensive IT support critical to the VA's operations during that period.

How did Merlin International, Inc.'s performance on this contract compare to industry standards or other VA IT contracts?

Assessing Merlin International's performance requires access to contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) which are not publicly available in detail for this specific contract. However, the fact that the contract was awarded competitively and completed its full term suggests satisfactory performance. To compare, one would need to analyze CPARS data for similar VA IT contracts awarded around the same time to gauge if Merlin's ratings were above, at, or below average. Factors like on-time delivery, quality of service, and responsiveness would be key comparison points.

What was the pricing structure and how does it benchmark against similar IT services during the 2007-2012 period?

The contract utilized a 'FIRM FIXED PRICE' (pt: "FIRM FIXED PRICE") structure. This means the price was set at the outset, and the contractor was responsible for all costs incurred to deliver the specified services. This structure is generally favorable for the government as it provides cost certainty. Benchmarking the $13.5 million total award over five years (approximately $2.7 million annually) against similar IT support contracts for large federal agencies during that era would be necessary for a precise value assessment. Factors like labor rates, scope of services, and service level agreements would influence comparisons.

What were the primary risks associated with this contract, and how were they managed?

Key risks for a contract of this nature and period could include technological obsolescence, cybersecurity threats, contractor performance issues, and budget fluctuations. The fixed-price nature helped mitigate cost overrun risks for the government. Managing performance risks would involve the VA's program management and contracting officers monitoring deliverables and service levels. Cybersecurity risks would be addressed through contract clauses and VA security protocols. Budget risks are inherent in government contracting but are managed through the appropriations process.

What is the historical spending trend for 'Other Computer Related Services' at the VA, and how does this contract fit?

The VA is a significant federal spender on IT services, including those categorized under NAICS 541519. This $13.5 million contract, awarded between 2007 and 2012, represents a portion of the VA's overall IT expenditure during that period. Historical spending trends would show fluctuations based on agency priorities, technological advancements, and budget allocations. This contract likely supported the VA's efforts to maintain and upgrade its IT infrastructure to manage veteran health records, benefits, and other critical services. Analyzing broader VA IT spending patterns would reveal if this contract was typical, large, or small relative to other similar 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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4 B INVERNESS COURT ESTE 100, ENGLEWOOD, CO, 06

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $13,545,028

Exercised Options: $13,545,028

Current Obligation: $13,545,028

Parent Contract

Parent Award PIID: NNG07DA23B

IDV Type: GWAC

Timeline