VA's $38.3M ITSM Tool Contract Awarded to SIERRA7, Inc. for IT Services

Contract Overview

Contract Amount: $38,299,376 ($38.3M)

Contractor: Sierra7, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-22

End Date: 2019-01-21

Contract Duration: 486 days

Daily Burn Rate: $78.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF ITSM TOOL

Place of Performance

Location: MARTINSBURG, BERKELEY County, WEST VIRGINIA, 25403

State: West Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $38.3 million to SIERRA7, INC. for work described as: IGF::OT::IGF ITSM TOOL Key points: 1. The contract represents a significant investment in IT service management tools for the VA. 2. Competition dynamics for this contract are noted as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggesting a potentially complex procurement process. 3. The contract duration of 486 days indicates a medium-term need for these IT services. 4. The award value of $38.3 million positions this as a substantial IT services contract within the agency. 5. The North American Industry Classification System (NAICS) code 541519 points to a focus on 'Other Computer Related Services'. 6. The contract type is 'FIRM FIXED PRICE', which typically shifts cost risk to the contractor. 7. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this $38.3 million contract for IT Service Management (ITSM) tools is challenging without specific performance metrics or comparable contract data. However, the firm-fixed-price nature suggests the VA aimed to control costs by transferring risk to SIERRA7, Inc. The per-unit cost is not readily calculable due to the nature of the services provided, which likely encompass a suite of ITSM functionalities rather than discrete, easily quantifiable units. Further analysis would require understanding the scope of services delivered and comparing them to industry standards for similar ITSM solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This specific designation suggests that while the competition was intended to be open, certain sources may have been excluded for reasons not immediately apparent from the provided data. The presence of two bidders indicates some level of competition, but the exclusion clause raises questions about the breadth of the competitive landscape and its potential impact on price discovery. A more thorough review of the solicitation and award documents would be needed to understand the rationale behind the source exclusion.

Taxpayer Impact: The limited competition, particularly with the exclusion of sources, may have resulted in a higher price for taxpayers than a truly open and unrestricted competition. It also suggests a potential lack of robust market research or a specific requirement that narrowed the field of eligible bidders.

Public Impact

The primary beneficiaries are likely Department of Veterans Affairs (VA) IT staff and potentially veterans who rely on VA IT systems for services. The services delivered are related to IT Service Management (ITSM), which could include help desk support, incident management, problem management, change management, and asset management. The geographic impact is primarily within the VA's operational footprint, likely nationwide, supporting its various facilities and personnel. Workforce implications could include the need for specialized IT personnel to manage and operate the ITSM tools, both within the VA and at the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'EXCLUSION OF SOURCES' clause in the competition type warrants further investigation to ensure fair market access and optimal pricing.
Lack of detailed performance metrics makes it difficult to assess the true value for money and effectiveness of the ITSM services.
The contract's fixed-price nature, while good for cost control, could lead to scope creep issues if not managed meticulously.

Positive Signals

The use of 'FULL AND OPEN COMPETITION' (even with exclusions) indicates an effort to leverage market capabilities for IT services.
The 'FIRM FIXED PRICE' contract type aligns with government objectives to ensure cost certainty and transfer risk to the contractor.
The award to SIERRA7, Inc. suggests a selection based on their ability to meet the VA's specific ITSM requirements.

Sector Analysis

The Information Technology (IT) services sector is a critical component of government operations, with agencies increasingly relying on sophisticated ITSM tools to manage complex infrastructures. The market for ITSM solutions is competitive, with numerous vendors offering a range of products and services. Government spending in this area is substantial, driven by the need for efficiency, security, and modernization of IT systems. This contract fits within the broader category of IT professional services, specifically focusing on the management and support of IT infrastructure and services.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests the contract was likely awarded through a mechanism that did not prioritize small businesses, or that the prime contractor, SIERRA7, Inc., is not a small business. There is no explicit information on subcontracting plans for small businesses. The absence of small business set-aside considerations means that opportunities for small businesses to directly participate as prime contractors were limited for this specific award.

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 facilitated through contract award databases like FPDS, which provide basic details of the contract. However, detailed operational oversight and performance monitoring would be internal VA processes.

Related Government Programs

IT Service Management (ITSM) Software
IT Professional Services
Cloud Computing Services
Cybersecurity Services
Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for limited competition due to source exclusion.
Risk of scope creep in firm-fixed-price contracts for complex services.
Need for robust performance monitoring to ensure value for money.
Dependence on contractor performance for critical IT service management functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $38.3 million to SIERRA7, INC.. IGF::OT::IGF ITSM TOOL

Who is the contractor on this award?

The obligated recipient is SIERRA7, 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 $38.3 million.

What is the period of performance?

Start: 2017-09-22. End: 2019-01-21.

What specific ITSM functionalities does this contract cover for the VA?

The provided data identifies the contract's purpose as 'IGF::OT::IGF ITSM TOOL' and the NAICS code as 541519 ('Other Computer Related Services'). While specific functionalities are not detailed, ITSM tools generally encompass a suite of services designed to manage and support IT infrastructure and end-user services. This typically includes incident management (resolving IT issues), problem management (identifying root causes of recurring issues), change management (controlling IT modifications), service request fulfillment, asset management (tracking IT hardware and software), and service level management. The contract likely involves the implementation, maintenance, and support of software and related services that enable these functions for the VA's IT operations.

How does the award value of $38.3 million compare to similar ITSM contracts within the federal government?

Comparing the $38.3 million award value requires access to a broader dataset of federal ITSM contracts. However, for a duration of approximately 1.3 years (486 days), this represents a significant investment. Federal agencies often spend tens to hundreds of millions of dollars on enterprise-wide ITSM solutions, including software licenses, implementation services, and ongoing support. The VA's investment appears substantial, suggesting a comprehensive scope or a high level of service required. Without specific details on the scope of services and the number of users supported, a precise benchmark is difficult, but it falls within the range of major IT service contracts.

What are the key risks associated with a firm-fixed-price contract for complex IT services like ITSM?

Firm-fixed-price (FFP) contracts are designed to provide cost certainty to the buyer. However, for complex IT services like ITSM, risks can arise. A primary risk is that the contractor may cut corners on quality or service delivery to maintain profitability if their cost estimates were too low, potentially impacting system performance or user satisfaction. Conversely, if the contractor's costs are significantly higher than anticipated, they may seek change orders or scope adjustments, leading to cost increases. Another risk is scope creep, where the requirements evolve beyond the initial agreement, necessitating renegotiation. Effective contract management, clear performance metrics, and robust oversight are crucial to mitigate these risks.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the procurement process?

This procurement designation suggests a multi-stage process. Initially, the solicitation was intended for full and open competition, meaning all responsible sources were encouraged to submit offers. However, 'after exclusion of sources' indicates that, at some point, certain potential offerors were disqualified or prevented from bidding. The reasons for exclusion could range from failure to meet mandatory requirements, past performance issues, or specific government policy decisions. While it aimed for broad competition initially, the exclusion narrows the field, potentially impacting the number of bids received and the final price. Understanding the specific criteria for exclusion is key to assessing the true competitiveness.

What is the historical spending pattern for ITSM tools at the Department of Veterans Affairs?

Analyzing historical spending patterns for ITSM tools at the VA would require examining contract data over multiple fiscal years. Agencies like the VA often have ongoing needs for ITSM solutions, leading to recurring contracts or task orders under IDIQ vehicles. Spending can fluctuate based on system upgrades, new technology adoption, contract expirations, and agency priorities. Without access to historical VA spending data specifically for ITSM, it's difficult to establish a trend. However, it's common for large federal agencies to consistently invest significant sums in maintaining and improving their IT service management capabilities.

What is the track record of SIERRA7, Inc. in delivering similar IT services to the federal government?

Assessing SIERRA7, Inc.'s track record requires reviewing their past federal contract awards, performance evaluations (e.g., CPARS), and any publicly available project information. As a contractor awarded a $38.3 million firm-fixed-price contract for ITSM tools, they presumably demonstrated the capability and experience necessary to meet the VA's requirements. However, a comprehensive evaluation would involve looking at the size, complexity, and success of their previous engagements, particularly those involving IT service management or similar complex IT solutions for government agencies. Information on their performance history is crucial for understanding potential risks and successes.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3190 FAIRVIEW PARK DR STE 350, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $125,880,090

Exercised Options: $38,299,376

Current Obligation: $38,299,376

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG15SD78B

IDV Type: GWAC

Timeline