VA awards $236.7M for cloud services, with 3 bidders competing for infrastructure, platform, and software as a service

Contract Overview

Contract Amount: $236,665,957 ($236.7M)

Contractor: Four Points Technology, L.L.C.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-06

End Date: 2022-09-05

Contract Duration: 1,825 days

Daily Burn Rate: $129.7K/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 THIS CONTRACT IS FOR REQUIRES CLOUD SERVICES FROM AN AUTHORIZED PUBLIC SECTOR RESELLER IN SUPPORT OF ALL SERVICE LEVELS: INFRASTRUCTURE AS A SERVICE, PLATFORM AS A SERVICE, AND SOFTWARE AS A SERVICE. THESE CLOUD SERVICES ARE REQUIRED TO ALLOCATE MEMORY, PROCESSING, STORAGE, AND NETWORKING ON DEMAND TO GAIN ACCESS TO A SUITE OF SECURE, SCALABLE AND FLEXIBLE INFORMATION TECHNOLOGY CAPABILITIES TO ENABLE CREATION, DELETION, AND FLEXIBLE SIZING OF VIRTUAL DATA CENTERS AND VIRTUAL MACHINES.

Place of Performance

Location: TINTON FALLS, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $236.7 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: IGF::OT::IGF THIS CONTRACT IS FOR REQUIRES CLOUD SERVICES FROM AN AUTHORIZED PUBLIC SECTOR RESELLER IN SUPPORT OF ALL SERVICE LEVELS: INFRASTRUCTURE AS A SERVICE, PLATFORM AS A SERVICE, AND SOFTWARE AS A SERVICE. THESE CLOUD SERVICES ARE REQUIRED TO ALLOCATE MEMORY, PROCESSING… Key points: 1. The contract leverages cloud computing to provide on-demand memory, processing, storage, and networking. 2. Services include Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). 3. The contract enables flexible creation, deletion, and sizing of virtual data centers and machines. 4. This award supports the Department of Veterans Affairs' broader IT modernization efforts. 5. The firm fixed-price contract type suggests predictable costs for the government. 6. The duration of 1825 days indicates a long-term commitment to these cloud services.

Value Assessment

Rating: good

The total award of $236.7 million over five years for comprehensive cloud services appears reasonable given the scope. Benchmarking against similar large-scale cloud service contracts is challenging without specific service level agreements and usage metrics. However, the firm fixed-price structure provides cost certainty. The number of bidders suggests a competitive environment that likely contributed to a fair price.

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 all responsible sources were permitted to submit offers. With three bidders, the competition level is moderate, suggesting that while multiple vendors were interested, the market may not be as broad as for more commoditized IT services. This level of competition generally supports price discovery and can lead to better value.

Taxpayer Impact: A moderate level of competition among three bidders is generally positive for taxpayers, as it encourages vendors to offer competitive pricing to secure the contract. It suggests that the government is not overly reliant on a single provider.

Public Impact

Veterans Affairs (VA) personnel benefit from enhanced IT capabilities to manage and deliver services. The contract delivers essential cloud infrastructure, platform, and software services. The geographic impact is national, supporting VA operations across the United States. IT professionals and support staff within the VA will utilize these services. Improved IT infrastructure can indirectly support the delivery of healthcare and benefits to veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific cloud technologies become deeply integrated.
Reliance on a single reseller could introduce supply chain risks.
Ensuring continued cost-effectiveness as cloud usage scales requires ongoing monitoring.

Positive Signals

Use of cloud services promotes scalability and flexibility, adapting to changing VA needs.
Competition among three bidders suggests a healthy market for these services.
Firm fixed-price contract provides budget predictability.

Sector Analysis

The market for cloud computing services is vast and rapidly evolving, with significant government spending allocated to IaaS, PaaS, and SaaS. This contract fits within the broader IT services sector, specifically focusing on cloud infrastructure and reselling. Comparable spending benchmarks are difficult to pinpoint without detailed service usage, but the overall federal cloud spending is in the hundreds of billions annually. This contract represents a portion of that investment for the VA.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The primary contractor, Four Points Technology, L.L.C., is a small business, which may indirectly benefit the small business ecosystem if they leverage other small businesses for support, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officer and program management offices. The firm fixed-price nature of the contract provides a degree of financial oversight by limiting cost overruns. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

General Services Administration (GSA) Cloud IT Schedule
Department of Defense (DoD) Cloud Computing Strategy
Federal Risk and Authorization Management Program (FedRAMP)

Risk Flags

Potential for vendor lock-in
Supply chain complexity via reseller
Cost management for scaling cloud usage
Data security and compliance oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $236.7 million to FOUR POINTS TECHNOLOGY, L.L.C.. IGF::OT::IGF THIS CONTRACT IS FOR REQUIRES CLOUD SERVICES FROM AN AUTHORIZED PUBLIC SECTOR RESELLER IN SUPPORT OF ALL SERVICE LEVELS: INFRASTRUCTURE AS A SERVICE, PLATFORM AS A SERVICE, AND SOFTWARE AS A SERVICE. THESE CLOUD SERVICES ARE REQUIRED TO ALLOCATE MEMORY, PROCESSING, STORAGE, AND NETWORKING ON DEMAND TO GAIN ACCESS TO A SUITE OF SECURE, SCALABLE AND FLEXIBLE INFORMATION TECHNOLOGY CAPABILITIES TO ENABLE CREATION, DELETION, AND FLEXIBLE SIZING OF VIRTUAL DATA CENTERS AND VIRTUAL MAC

Who is the contractor on this award?

The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..

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 $236.7 million.

What is the period of performance?

Start: 2017-09-06. End: 2022-09-05.

What is the specific nature of the cloud services provided by Four Points Technology, L.L.C. under this contract?

The contract specifies that Four Points Technology, L.L.C. is providing cloud services as an authorized public sector reseller. These services encompass Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). The core function is to allocate memory, processing, storage, and networking on demand. This enables the Department of Veterans Affairs (VA) to gain access to secure, scalable, and flexible IT capabilities, facilitating the creation, deletion, and flexible sizing of virtual data centers and virtual machines. The firm fixed-price contract type suggests a defined scope of services for the total award amount.

How does the pricing of this contract compare to similar cloud service agreements within the federal government?

Direct per-unit cost comparisons are difficult without knowing the specific service level agreements (SLAs) and usage metrics for IaaS, PaaS, and SaaS components. However, the total award of $236.7 million over five years for comprehensive cloud services suggests a significant investment. The firm fixed-price (FFP) contract type generally offers cost certainty, which is a positive indicator for value. The presence of three bidders indicates a competitive environment, which typically helps in achieving fair market pricing. Further analysis would require benchmarking against contracts with similar scope, security requirements, and performance metrics.

What are the primary risks associated with this cloud services contract for the Department of Veterans Affairs?

Key risks include potential vendor lock-in, especially if the VA becomes heavily reliant on specific proprietary cloud technologies or architectures offered through this reseller. There's also a risk related to the supply chain, as relying on a reseller rather than directly with a cloud provider could introduce an additional point of failure or complexity. Ensuring continued cost-effectiveness as cloud usage scales is another concern; while FFP provides initial certainty, unmonitored growth in resource consumption could lead to unexpected budget pressures if not managed proactively. Data security and compliance with VA regulations within the cloud environment also remain a constant risk that requires diligent oversight.

What is the historical spending pattern for cloud services by the Department of Veterans Affairs?

Historical spending data for cloud services by the VA is not directly available from the provided snippet. However, federal agencies, including the VA, have been increasingly migrating IT infrastructure to the cloud to enhance agility, scalability, and cost-efficiency. This trend has been driven by government-wide initiatives promoting cloud adoption. The $236.7 million award over five years indicates a substantial and ongoing commitment to cloud services, suggesting that previous spending in this area was likely significant and is expected to continue growing as the VA modernizes its IT systems.

How does the competition level of three bidders impact the value proposition for taxpayers?

A competition level of three bidders is generally considered moderate and positive for taxpayers. It indicates that the contract was not awarded under a sole-source or limited competition scenario, which could lead to inflated prices. The presence of multiple interested parties suggests that Four Points Technology, L.L.C. had to offer competitive terms to win the contract. This level of competition helps ensure that the government is receiving services at a fair market price, avoiding the inefficiencies and higher costs often associated with a lack of robust competition. It provides a degree of assurance that taxpayer funds are being used efficiently.

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: 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: 14900 CONFERENCE CENTER DR STE 100, CHANTILLY, VA, 20151

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $480,452,400

Exercised Options: $236,665,957

Current Obligation: $236,665,957

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD22B

IDV Type: GWAC

Timeline