VA's $55.4M document management contract with DOCUMENT STORAGE SYSTEMS, INC. awarded without competition

Contract Overview

Contract Amount: $55,450,234 ($55.5M)

Contractor: Document Storage Systems, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-10-01

End Date: 2016-11-30

Contract Duration: 1,156 days

Daily Burn Rate: $48.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF

Place of Performance

Location: JUNO BEACH, PALM BEACH County, FLORIDA, 33408

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $55.5 million to DOCUMENT STORAGE SYSTEMS, INC. for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The contract's duration of 1156 days suggests a long-term need for these services. 3. Fixed-price contract type may offer cost certainty but could limit flexibility. 4. The specific service category (Other Computer Related Services) is broad and requires further definition. 5. The absence of small business set-aside indicates a focus on larger, established providers. 6. Geographic location in Florida might point to specific regional needs or contractor presence.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar document management services. The fixed-price nature suggests a defined scope, but the lack of competition prevents an assessment of whether the government secured the best possible price. Without competitive bids, it's difficult to determine if the $55.4 million represents a fair market value or if taxpayers could have realized savings through a more open bidding process. Further analysis would require understanding the specific deliverables and market rates for such specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The lack of competition means there were no other bidders to compare against, and the government did not benefit from the price discovery mechanisms inherent in a competitive procurement process. This raises concerns about whether alternative, potentially more cost-effective solutions were overlooked.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not achieve the most advantageous pricing achievable through open competition. This limits the government's ability to leverage market forces to secure better value.

Public Impact

Benefits the Department of Veterans Affairs by providing essential document storage and management services. Ensures the availability and accessibility of critical veteran records. Supports the operational efficiency of VA facilities, particularly those in Florida. Potentially impacts the workforce involved in document handling and digital conversion processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
Sole-source awards can reduce transparency and accountability in government spending.
The broad service category 'Other Computer Related Services' lacks specificity, making performance monitoring difficult.
Long contract duration without clear performance metrics could lead to vendor lock-in.
No indication of small business participation, potentially missing opportunities for smaller firms.

Positive Signals

Fixed-price contract type provides cost predictability for the government.
The contract is with an established entity, potentially ensuring service continuity.
The award is for a defined period, allowing for future re-evaluation of needs.
The contract is managed by the Department of Veterans Affairs, a key agency for veteran services.

Sector Analysis

The IT services sector, particularly document management and related computer services, is a significant area of federal spending. Agencies like the VA handle vast amounts of sensitive data, necessitating robust storage and retrieval solutions. While specific market size data for sole-source document storage contracts is scarce, the broader IT services market is highly competitive. However, sole-source awards bypass these competitive dynamics, often for specialized or legacy systems where a single vendor has unique expertise or proprietary technology. This contract falls under the 'Other Computer Related Services' NAICS code, indicating a focus beyond standard IT hardware or software.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there information suggesting subcontracting opportunities for small businesses. The award to DOCUMENT STORAGE SYSTEMS, INC. suggests a focus on a larger, potentially established provider. This approach may limit the participation of small businesses in providing these specific services, potentially concentrating the contract value among larger firms and not fostering the growth of the small business ecosystem in this particular service area.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is limited due to the sole-source nature, but contract award details are typically available through federal procurement databases.

Related Government Programs

Federal Records Management
Electronic Document Management Systems
IT Services for Healthcare Agencies
Department of Veterans Affairs IT Procurement
Sole-Source IT Contracts

Risk Flags

Sole-source award lacks competition
Potential for overpayment without competitive benchmarking
Broad service category lacks specificity
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $55.5 million to DOCUMENT STORAGE SYSTEMS, INC.. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is DOCUMENT STORAGE SYSTEMS, 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 $55.5 million.

What is the period of performance?

Start: 2013-10-01. End: 2016-11-30.

What specific services are included under 'Other Computer Related Services' for this contract?

The 'Other Computer Related Services' (NAICS 541519) category is broad and encompasses a wide range of IT services not classified elsewhere. For this specific contract with DOCUMENT STORAGE SYSTEMS, INC. for the Department of Veterans Affairs, it likely pertains to services such as digital scanning, document imaging, data conversion, secure physical and/or electronic document storage, retrieval systems, and potentially associated software or platform management. Without a more detailed statement of work, the precise scope remains general. However, given the agency (VA) and the contractor's name, it strongly suggests a focus on managing and digitizing large volumes of veteran-related records, ensuring their long-term accessibility and integrity.

How does the pricing of this $55.4M contract compare to similar sole-source document management contracts?

Directly comparing the pricing of this $55.4 million sole-source contract to similar awards is difficult due to the inherent lack of transparency and standardization in sole-source procurements. Sole-source contracts are, by definition, not subject to competitive bidding, meaning the price is negotiated directly with the chosen vendor. Without market data from competing bids, it's challenging to establish a benchmark for 'fair market price.' Factors influencing the cost include the volume of documents, the complexity of digitization, the required security protocols, the duration of storage, and the specific technology platforms used. A comprehensive value-for-money assessment would require detailed knowledge of these factors and comparison against industry standards for similar, albeit potentially competed, services.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($55.4 million) include potential overpayment due to the absence of competitive pressure, reduced innovation as the government is tied to a single vendor's offerings, and a lack of flexibility to switch to potentially better or more cost-effective solutions that may emerge. There's also a risk of vendor lock-in, where the government becomes highly dependent on the incumbent contractor, making future transitions difficult and costly. Furthermore, sole-source awards can sometimes be perceived as less transparent, potentially leading to scrutiny regarding the justification for not competing the requirement and ensuring the best value was obtained for taxpayer funds.

What is the track record of DOCUMENT STORAGE SYSTEMS, INC. in handling federal contracts, particularly for the VA?

DOCUMENT STORAGE SYSTEMS, INC. has a history of receiving federal contracts, including those with the Department of Veterans Affairs. Information from federal procurement databases indicates past awards for document management and related services. Assessing their overall track record requires a deeper dive into contract performance metrics, past performance reviews, and any documented issues or successes on previous government engagements. While the award itself signifies a level of trust or capability recognized by the agency, a comprehensive evaluation would involve examining specific contract close-outs, user feedback, and any quality assurance reports associated with their prior work for the VA or other federal agencies.

How has the VA's spending on document management services evolved over time, and does this contract fit historical patterns?

The VA's spending on document management services has likely evolved significantly with the increasing push towards digitization and electronic health records (EHRs). Historically, spending may have been higher on physical storage and manual processes. As technology advanced, the focus shifted towards scanning, indexing, and electronic document management systems (EDMS). This $55.4 million contract, awarded in 2013 for services extending into 2016, fits within a period where agencies were actively migrating from paper-based systems to digital solutions. Without historical spending data specifically for this contractor or detailed breakdowns of VA's document management budget over multiple years, it's difficult to definitively state if this contract represents a typical or anomalous level of spending. However, it reflects a substantial investment in managing critical veteran data.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: VA118-13-R-0342

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12575 US HIGHWAY 1 STE 200, JUNO BEACH, FL, 33408

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $176,378,432

Exercised Options: $127,539,966

Current Obligation: $55,450,234

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline