VA's $22M data center contract with Techanax LLC awarded under full and open competition

Contract Overview

Contract Amount: $22,026,075 ($22.0M)

Contractor: Techanax LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-06-23

End Date: 2021-06-10

Contract Duration: 2,179 days

Daily Burn Rate: $10.1K/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: IGF::OT::IGF VA OI&T NDCP REGION 4 DATACENTER HOSTING AND ASSOCIATED SUPPORT SERVICES.

Place of Performance

Location: SECAUCUS, HUDSON County, NEW JERSEY, 07094

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $22.0 million to TECHANAX LLC for work described as: IGF::OT::IGF VA OI&T NDCP REGION 4 DATACENTER HOSTING AND ASSOCIATED SUPPORT SERVICES. Key points: 1. Contract value of $22.03 million over its duration. 2. Awarded to Techanax LLC for data center hosting and support. 3. Utilized full and open competition after exclusion of sources. 4. Contract duration of 2179 days (approximately 6 years). 5. Firm Fixed Price contract type suggests predictable costs. 6. No small business set-aside was utilized. 7. Geographic location of service in New Jersey.

Value Assessment

Rating: fair

The contract's total value of $22.03 million over approximately six years averages to about $3.67 million annually. Benchmarking this against similar government contracts for data center hosting and facilities management is challenging without more specific service details. However, the firm fixed-price nature provides cost certainty for the VA. The absence of readily available per-unit cost data makes a precise value-for-money assessment difficult, but the duration suggests a potentially stable, long-term relationship.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. The data shows 3 offers were received. This suggests some level of competition, but the 'exclusion of sources' clause warrants further investigation to understand the rationale and its impact on the competitive landscape and final pricing.

Taxpayer Impact: The limited competition, due to source exclusion, may have resulted in less aggressive pricing than a truly open competition with no exclusions. Taxpayers may have paid a premium if the excluded sources could have offered better value.

Public Impact

Provides essential IT infrastructure support for the Department of Veterans Affairs. Ensures continuity of critical data center operations for VA services. Services are delivered within New Jersey, impacting the local IT workforce. Supports the digital backbone necessary for veteran healthcare and benefits administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to 'exclusion of sources' clause.
Lack of detailed performance metrics or outcome data.
Firm Fixed Price contracts can sometimes lead to contractor inflexibility on scope changes.

Positive Signals

Long-term contract duration provides stability for service delivery.
Firm Fixed Price contract type offers cost predictability.
Awarded to a single contractor, potentially simplifying management.
Competition was sought, with 3 offers received.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data center facilities management and hosting. The market for such services is large and competitive, with numerous providers offering cloud, colocation, and managed hosting solutions. Government spending in this area is substantial, driven by the need for secure, reliable, and scalable IT infrastructure to support agency operations. This contract represents a portion of the VA's broader IT modernization and operational support spending.

Small Business Impact

This contract did not include a small business set-aside, as indicated by 'sb': false. Consequently, there are no direct subcontracting requirements mandated for small businesses within this specific award. The prime contractor, Techanax LLC, is responsible for its own business operations and supply chain. The absence of a set-aside means opportunities for small businesses to directly participate in this contract were not prioritized.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officer and program management officials. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract. Transparency is generally maintained through contract databases like FPDS, which provide basic award details, though detailed performance reports may not always be publicly accessible.

Related Government Programs

VA IT Infrastructure Services
Data Center Operations Contracts
Cloud and Hosting Services
Federal IT Facilities Management

Risk Flags

Limited competition due to source exclusion.
Lack of detailed performance metrics.
Potential for inflexibility with FFP contract type.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $22.0 million to TECHANAX LLC. IGF::OT::IGF VA OI&T NDCP REGION 4 DATACENTER HOSTING AND ASSOCIATED SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is TECHANAX 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 $22.0 million.

What is the period of performance?

Start: 2015-06-23. End: 2021-06-10.

What specific services are included under 'Computer Facilities Management Services' for this contract?

The provided data indicates the North American Industry Classification System (NAICS) code is 541513, which corresponds to Computer Facilities Management Services. This typically encompasses a range of activities including operating and managing clients' computer systems and/or data operations facilities. Services can include the installation and/or support of software and other computer-related equipment, as well as providing facilities for the hosting of servers and data. For this specific contract, 'DATACENTER HOSTING AND ASSOCIATED SUPPORT SERVICES' suggests a focus on the physical infrastructure, power, cooling, security, and potentially network connectivity required to house and operate IT equipment, along with ongoing technical support for these facilities.

What is the rationale behind 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'?

This procurement method signifies that the agency intended to compete the contract broadly but identified specific sources that were excluded from consideration. The reasons for exclusion can vary, potentially including prior performance issues, specific technical requirements that only certain vendors could meet, or national security concerns. While it aims for competition, the exclusion inherently limits the bidder pool compared to a standard 'full and open' competition. Understanding the specific justification for excluding sources is crucial for assessing whether the competition was truly adequate and if it potentially impacted the final price and value received by the government.

How does the $22.03 million contract value compare to similar VA data center contracts?

Direct comparison of the $22.03 million contract value is difficult without granular data on the scope, duration, and specific services of other VA data center contracts. However, the contract duration of approximately six years (2179 days) suggests a significant, long-term commitment. Annualized, the contract value is roughly $3.67 million per year. The VA, like other large federal agencies, relies heavily on data center services, and spending in this area can range widely based on scale, complexity, and whether services are on-premises, collocated, or cloud-based. This contract appears to represent a substantial investment in maintaining critical IT infrastructure.

What are the potential risks associated with a Firm Fixed Price (FFP) contract for data center services?

Firm Fixed Price contracts offer cost certainty to the government, as the price is set regardless of the contractor's actual costs. However, risks can emerge. If the scope of work is not precisely defined, the contractor may resist changes or charge premiums for modifications. Conversely, if the contractor underestimates costs, they may cut corners on service quality to maintain profitability, potentially impacting reliability. For data center services, which can involve evolving technologies and unpredictable demands, an FFP contract might limit flexibility in adapting to new requirements or scaling resources efficiently without costly change orders.

What is the track record of Techanax LLC with federal contracts, particularly with the VA?

Publicly available data indicates Techanax LLC has been awarded federal contracts, including this one with the Department of Veterans Affairs. Analyzing their broader contract history, including past performance ratings, any contract disputes, or other awards, would provide a more comprehensive view of their track record. Without access to detailed performance evaluations or a broader database of their awards and history, it's challenging to definitively assess their overall reliability and effectiveness as a federal contractor beyond the basic award information provided.

What are the implications of this contract being awarded in New Jersey?

The contract's performance location in New Jersey has several implications. It means the IT infrastructure and associated support services are physically located within the state, potentially leveraging local data center facilities and IT workforce. For the VA, this geographic placement might be driven by factors such as proximity to VA facilities, existing infrastructure, state-level incentives, or specific security requirements. The economic impact is localized, potentially creating or sustaining jobs within New Jersey's technology sector and supporting businesses in the supply chain within that region.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA118-15-R-0073

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15000 AFTON CT, MONTCLAIR, VA, 22025

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $27,410,887

Exercised Options: $22,026,075

Current Obligation: $22,026,075

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline