VA's $18.4M WAN acceleration equipment purchase via NASA SEWP IV GWAC shows fair value with 3 bidders

Contract Overview

Contract Amount: $18,405,496 ($18.4M)

Contractor: Merlin International, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2011-09-16

End Date: 2014-09-15

Contract Duration: 1,095 days

Daily Burn Rate: $16.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DELIVERY ORDER UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) SOLUTIONS FOR ENTERPRISE-WIDE PROCUREMENT (SEWP) IV GOVERNMENTWIDE ACQUISITION CONTRACT (GWAC) FOR THE DEPARTMENT OF VETERANS AFFAIRS (VA) ENTERPRISE WIDE AREA NETWORK (WAN) ACCELERATION EQUIPMENT

Place of Performance

Location: ENGLEWOOD, ARAPAHOE County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.4 million to MERLIN INTERNATIONAL, INC. for work described as: DELIVERY ORDER UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) SOLUTIONS FOR ENTERPRISE-WIDE PROCUREMENT (SEWP) IV GOVERNMENTWIDE ACQUISITION CONTRACT (GWAC) FOR THE DEPARTMENT OF VETERANS AFFAIRS (VA) ENTERPRISE WIDE AREA NETWORK (WAN) ACCELERATION EQUIPMENT Key points: 1. The contract represents a moderate investment in network infrastructure to enhance VA's Wide Area Network. 2. Competition was robust, with three bids received, suggesting a healthy market for these services. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of three years allows for sustained network improvement. 5. The use of a Governmentwide Acquisition Contract (GWAC) streamlines procurement for the VA. 6. The specific service code (541519) indicates a focus on IT services beyond simple hardware provision.

Value Assessment

Rating: fair

The contract's value of approximately $18.4 million over three years for WAN acceleration equipment appears reasonable given the scope. Benchmarking against similar GWAC orders for network hardware and services suggests this price point is within expected ranges. The fixed-price nature of the contract provides cost certainty, which is a positive indicator for value. However, without detailed performance metrics or specific equipment lists, a definitive assessment of 'excellent' value is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that the solicitation was broadly advertised and multiple vendors were allowed to bid. The presence of three bidders suggests a competitive environment for this type of IT equipment and services. This level of competition generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The competitive bidding process likely resulted in a more cost-effective solution for taxpayers by driving down prices and encouraging vendors to offer their best terms.

Public Impact

Veterans Affairs (VA) personnel and potentially beneficiaries will experience improved network performance, leading to more efficient operations and service delivery. The acquisition of WAN acceleration equipment directly supports the VA's IT infrastructure modernization efforts. The geographic impact is nationwide, as the VA operates a distributed network across the United States. The contract supports the IT services sector, potentially involving technical personnel for installation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen equipment is proprietary and difficult to integrate with future solutions.
Risk of obsolescence if the technology rapidly advances beyond the capabilities of the purchased equipment within the contract period.
Dependence on Merlin International, Inc. for support and maintenance during the contract term.

Positive Signals

Leveraging a NASA SEWP IV GWAC reduces administrative burden and procurement lead time for the VA.
The fixed-price contract structure provides budget certainty and limits financial risk.
The competitive award process suggests a fair market price was likely achieved.
The contract duration allows for sustained network improvements and operational stability.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on network infrastructure and services. The market for WAN acceleration equipment is driven by the increasing demand for faster and more reliable data transmission, crucial for large organizations like the VA. Spending in this area is often benchmarked against broader IT infrastructure investments by federal agencies, which can range from millions to billions annually depending on the scope and agency size. The use of a GWAC like NASA SEWP IV indicates a strategic approach to IT procurement, aiming for efficiency and leveraging pre-competed solutions.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Merlin International, Inc. may be a small business, the contract itself was awarded under full and open competition. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is not detailed in this record, though larger prime contractors often engage small businesses for specialized IT services.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs, as they are the end-user agency. As a delivery order under a NASA SEWP IV GWAC, the initial contract vehicle itself underwent a rigorous competitive process managed by NASA. Accountability measures are embedded in the firm fixed-price contract type, requiring Merlin International, Inc. to deliver the specified equipment and services within the agreed-upon cost. Transparency is facilitated by the public nature of federal contract awards, though detailed performance monitoring data may not be publicly available.

Related Government Programs

NASA SEWP IV GWAC
Department of Veterans Affairs IT Modernization Programs
Federal Wide Area Network (WAN) Infrastructure
Network Equipment Procurement

Risk Flags

Potential for vendor lock-in
Reliance on a single vendor for critical infrastructure
Technology obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.4 million to MERLIN INTERNATIONAL, INC.. DELIVERY ORDER UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) SOLUTIONS FOR ENTERPRISE-WIDE PROCUREMENT (SEWP) IV GOVERNMENTWIDE ACQUISITION CONTRACT (GWAC) FOR THE DEPARTMENT OF VETERANS AFFAIRS (VA) ENTERPRISE WIDE AREA NETWORK (WAN) ACCELERATION EQUIPMENT

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 $18.4 million.

What is the period of performance?

Start: 2011-09-16. End: 2014-09-15.

What is the track record of Merlin International, Inc. in fulfilling government contracts, particularly within the VA or similar agencies?

Assessing Merlin International, Inc.'s track record requires a deeper dive into their contract history beyond this single award. While this $18.4 million contract for VA WAN acceleration equipment is a significant data point, it's crucial to examine other awards, their performance ratings (if available through sources like the Contractor Performance Assessment Reporting System - CPARS), and any past performance issues or successes. A history of timely delivery, adherence to budget, and positive client feedback would indicate reliability. Conversely, a pattern of delays, cost overruns, or unresolved disputes would raise concerns about their capacity to consistently meet government requirements. Without this broader context, this single contract provides limited insight into their overall reliability as a contractor.

How does the per-unit cost of the WAN acceleration equipment compare to market rates or similar government purchases?

Determining the precise per-unit cost is challenging without a detailed breakdown of the equipment purchased and its specifications. The total award of $18.4 million is for a variety of WAN acceleration equipment over a three-year period. To benchmark effectively, one would need to identify the specific models and quantities of routers, switches, accelerators, and related hardware/software procured. Comparing these line items to current market prices from commercial vendors or to similar equipment purchased by other federal agencies through other contract vehicles (like GSA schedules or other GWACs) would be necessary. Given the use of a competitive GWAC, it's likely the pricing was vetted, but a detailed analysis would reveal if it represents excellent, fair, or questionable value on a unit basis.

What are the specific performance improvements expected from this WAN acceleration equipment for the VA's network?

The primary goal of WAN acceleration equipment is to enhance the speed, efficiency, and reliability of data transfer across geographically dispersed networks. For the VA, this translates to potentially faster access to electronic health records (EHRs), improved communication between facilities, quicker transfer of large medical imaging files, and a more responsive user experience for its IT systems. Specific performance metrics might include reduced latency, increased bandwidth utilization, improved application response times, and enhanced network uptime. The success of this contract hinges on whether these anticipated improvements are realized and demonstrably improve the VA's operational capabilities and service delivery to veterans.

What is the historical spending pattern of the VA on WAN acceleration equipment and related network infrastructure?

Analyzing the VA's historical spending on WAN acceleration and broader network infrastructure provides context for this $18.4 million award. Understanding if this represents an increase, decrease, or consistent level of investment is key. For instance, if the VA has consistently spent similar amounts annually on network upgrades, this contract might be part of a routine refresh cycle. However, if this is a significant departure from previous spending levels, it could indicate a major network overhaul, an expansion of services, or a response to identified performance deficiencies. Examining spending trends over the past 5-10 years would reveal whether this contract aligns with established patterns or signifies a strategic shift in the VA's network investment strategy.

What are the potential risks associated with relying on a single vendor (Merlin International, Inc.) for this critical network upgrade over a three-year period?

Relying on a single vendor for critical network infrastructure over three years presents several potential risks. Firstly, there's the risk of vendor lock-in, where the VA becomes dependent on Merlin International, Inc.'s proprietary technology, making future transitions to different vendors or technologies more complex and costly. Secondly, if Merlin International, Inc. experiences financial difficulties, operational issues, or changes its business strategy, it could disrupt the supply chain for necessary equipment, maintenance, or support, potentially impacting the VA's network performance. Thirdly, without ongoing competitive pressure, there might be less incentive for the vendor to offer the most competitive pricing or proactive service improvements throughout the contract duration. Robust service level agreements (SLAs) and clear contingency plans are essential to mitigate these risks.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

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: $18,405,496

Exercised Options: $18,405,496

Current Obligation: $18,405,496

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $12,677,407

Parent Contract

Parent Award PIID: NNG07DA23B

IDV Type: GWAC

Timeline