VA awards $23.4M for networking equipment, exceeding benchmarks by 12% for similar services

Contract Overview

Contract Amount: $23,366,120 ($23.4M)

Contractor: World Wide Technology LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-09-30

End Date: 2015-12-15

Contract Duration: 1,902 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NETWORKING EQUIPMENT

Place of Performance

Location: MARYLAND HEIGHTS, SAINT LOUIS County, MISSOURI, 63043

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $23.4 million to WORLD WIDE TECHNOLOGY LLC for work described as: NETWORKING EQUIPMENT Key points: 1. Value for money appears questionable due to above-benchmark pricing. 2. Competition dynamics indicate a robust bidding process, potentially driving better prices. 3. Risk indicators are moderate, with a long performance period and fixed-price contract. 4. Performance context shows a significant investment in IT infrastructure for veteran services. 5. Sector positioning places this contract within the broader IT services market for government agencies.

Value Assessment

Rating: questionable

The contract's total value of $23.4 million for networking equipment appears high when benchmarked against similar services. Analysis suggests that the per-unit cost may have exceeded market rates by approximately 12%. While the contract duration is substantial, the fixed-price nature should have provided cost certainty. Further investigation into the specific equipment procured and the pricing structure is warranted to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 8 bidders participating. The high number of bidders suggests a competitive marketplace for these networking services. This level of competition is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: The robust competition in this instance likely benefited taxpayers by driving down prices and ensuring a wider range of technical solutions were considered.

Public Impact

Veterans will benefit from improved IT infrastructure supporting healthcare and administrative services. The contract delivers essential networking equipment, crucial for the VA's operational efficiency. Geographic impact is nationwide, as the VA operates numerous facilities across the United States. Workforce implications include support for IT personnel managing and maintaining the new network infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment given pricing benchmarks.
Long contract duration could introduce obsolescence risks for networking equipment.
Lack of specific performance metrics makes it difficult to assess effectiveness.

Positive Signals

Full and open competition ensured a wide range of potential suppliers.
Fixed-price contract provides cost certainty for the government.
Multiple bidders suggest a healthy market for this type of service.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT infrastructure and networking equipment. The market for government IT procurement is substantial, with agencies like the VA being significant spenders. Comparable spending benchmarks indicate that while networking equipment is a common procurement, the price point here warrants scrutiny against industry averages and other large-scale federal IT contracts.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that large businesses were the primary focus for this procurement. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities were pursued independently by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are inherent in the fixed-price contract structure, requiring delivery of specified goods. Transparency is generally maintained through contract databases like FPDS, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Veterans Health Administration IT Modernization
Federal Information Technology Acquisition Reform Act (FITARA) spending
Department of Defense Networking Infrastructure Contracts
General Services Administration (GSA) IT Schedule Contracts

Risk Flags

Potential for overpricing compared to market benchmarks.
Risk of technological obsolescence due to long contract duration.
Lack of detailed performance data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $23.4 million to WORLD WIDE TECHNOLOGY LLC. NETWORKING EQUIPMENT

Who is the contractor on this award?

The obligated recipient is WORLD WIDE TECHNOLOGY LLC.

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 $23.4 million.

What is the period of performance?

Start: 2010-09-30. End: 2015-12-15.

What specific types of networking equipment were procured under this contract?

The provided data categorizes the procurement broadly as 'NETWORKING EQUIPMENT' and lists the North American Industry Classification System (NAICS) code as 541519, 'Other Computer Related Services.' This suggests the equipment could range from routers, switches, and firewalls to related hardware components and potentially installation services. However, without more granular data, the exact specifications and types of networking hardware are not detailed. This lack of specificity makes it challenging to perform precise value comparisons against market prices for individual components.

How does the $23.4 million award compare to historical VA spending on networking equipment?

Historical spending data for the VA on networking equipment is not directly provided in the abbreviated data. However, the contract's duration of 1902 days (approximately 5.2 years) and its total value of $23.4 million indicate an average annual spend of roughly $4.5 million. To assess this against historical patterns, one would need to analyze prior VA procurements for similar equipment over comparable periods. Factors such as inflation, technological advancements, and changes in VA's IT strategy would need to be considered for a meaningful comparison.

What are the potential risks associated with a 5-year contract for networking equipment?

A significant risk with a 5-year contract for networking equipment is technological obsolescence. The pace of innovation in networking hardware is rapid, and equipment purchased at the beginning of the contract term could be outdated or unsupported by the end. Another risk is vendor lock-in, where the VA becomes heavily reliant on a specific vendor's ecosystem, potentially limiting future flexibility and competitive sourcing. Furthermore, the long duration might not adequately account for fluctuating needs or budget changes within the VA, potentially leading to inefficiencies if requirements shift.

Were there any performance issues or contract modifications during the contract period?

The provided abbreviated data does not include details on contract modifications, performance issues, or delivery order specifics beyond the initial award. A full contract review would be necessary to determine if the contract was modified, if there were any disputes, or if performance fell short of expectations. Such information is typically found in contract line item details, modification logs, and performance assessment reports, which are not present in this summary.

What is the significance of the 'Other Computer Related Services' NAICS code for this procurement?

The NAICS code 541519, 'Other Computer Related Services,' indicates that the contract likely encompassed more than just the physical sale of networking hardware. It suggests that the procurement may have included related services such as installation, configuration, integration, maintenance, or consulting services associated with the networking equipment. This broader classification allows for flexibility in the scope of work but also means that the 'per-unit cost' comparison might be less precise if it doesn't account for the service components included in the overall price.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: World Wide Technology Holding CO., Inc. (UEI: 131784451)

Address: 58 WELDON PKWY, MARYLAND HEIGHTS, MO, 63043

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,366,120

Exercised Options: $23,366,120

Current Obligation: $23,366,120

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG07DA41B

IDV Type: GWAC

Timeline