Army awards $13.8M IT support contract to Koniag IT Systems, LLC for technology modernization

Contract Overview

Contract Amount: $13,881,926 ($13.9M)

Contractor: Koniag IT Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2025-08-28

End Date: 2026-09-29

Contract Duration: 397 days

Daily Burn Rate: $35.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TECHNOLOGY SUPPORT MODERNIZATION (TSM) SERVICES REQUIREMENT FOR HEADQUARTERS, ARMY MATERIEL COMMAND (HQAMC)

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $13.9 million to KONIAG IT SYSTEMS, LLC for work described as: TECHNOLOGY SUPPORT MODERNIZATION (TSM) SERVICES REQUIREMENT FOR HEADQUARTERS, ARMY MATERIEL COMMAND (HQAMC) Key points: 1. Contract focuses on IT support and modernization for Army Materiel Command headquarters. 2. The award is a definitive contract with a firm-fixed-price structure. 3. Duration of the contract is 397 days, ending in September 2026. 4. The contract value is approximately $13.8 million. 5. This contract is not set aside for small businesses. 6. The primary place of performance is Alaska.

Value Assessment

Rating: fair

The contract value of $13.8 million for 397 days of IT support and modernization services appears within a reasonable range for specialized technology services. Benchmarking against similar IT support contracts for headquarters-level organizations within the Department of Defense would provide a clearer picture of value for money. The firm-fixed-price structure suggests that the government has a clear understanding of the scope, which can help control costs, but it also shifts performance risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one contractor can provide the required services, often due to unique capabilities, existing infrastructure, or specific security requirements. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may not receive the best possible price due to the absence of competitive bidding. The government did not leverage market forces to drive down costs.

Public Impact

The primary beneficiaries are the Headquarters, Army Materiel Command (HQAMC), receiving essential IT support and modernization. Services delivered include technology support and modernization, crucial for the operational efficiency of HQAMC. The geographic impact is primarily in Alaska, where the place of performance is located. Workforce implications include employment opportunities for IT professionals within Koniag IT Systems, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit the government's access to innovative solutions from a broader market.
Performance risks are concentrated with the contractor under a firm-fixed-price contract.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a single, potentially specialized, vendor may ensure specific expertise is utilized.
Contract duration allows for sustained support and modernization efforts.

Sector Analysis

The IT services sector is a critical component of government operations, encompassing a wide range of support, development, and modernization activities. This contract falls under computer-related services, a segment that is consistently in high demand across federal agencies. The market for IT support and modernization is competitive, but specific requirements or existing relationships can lead to sole-source awards. Comparable spending benchmarks for similar IT support contracts within the Department of Defense can vary significantly based on scope and complexity.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to Koniag IT Systems, LLC, a single entity, does not directly contribute to the small business ecosystem through set-asides. Further analysis would be needed to determine if Koniag IT Systems, LLC itself is a small business or if subcontracting opportunities exist outside the explicit terms of this award.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and program management within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract, where the contractor is responsible for delivering specified services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, with details of the justification for this approach not readily available in the provided data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army IT Modernization Programs
Department of Defense IT Services Contracts
HQAMC Support Services
Information Technology Professional Services

Risk Flags

Sole-source award lacks competitive pricing.
Potential for higher costs due to lack of competition.
Limited transparency on justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to KONIAG IT SYSTEMS, LLC. TECHNOLOGY SUPPORT MODERNIZATION (TSM) SERVICES REQUIREMENT FOR HEADQUARTERS, ARMY MATERIEL COMMAND (HQAMC)

Who is the contractor on this award?

The obligated recipient is KONIAG IT SYSTEMS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2025-08-28. End: 2026-09-29.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which is synonymous with a sole-source award. The specific justification for this sole-source determination is not included in the data. Typically, sole-source awards are made when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique capabilities, proprietary technology, urgent requirements where competition is not feasible, or if the contract is a follow-on to a previous sole-source award where the original justification still holds. Without the official justification document, it's impossible to ascertain the precise reasons, but it implies a lack of readily available alternatives or a specific, singular requirement.

How does the contract value compare to similar IT support contracts for Army headquarters?

Direct comparison of the $13.8 million contract value for 397 days of IT support and modernization services for HQAMC to similar contracts is challenging without access to a broader database of federal IT procurements. However, for a headquarters-level command within a major military branch like the Army, this value appears to be within a plausible range for comprehensive IT support, including modernization efforts. Factors influencing cost include the complexity of the existing IT infrastructure, the scope of modernization required, the level of security clearance needed for personnel, and the specific services mandated (e.g., network management, cybersecurity, help desk, application support). A detailed benchmark analysis would require comparing contracts with similar service scopes, durations, and agency levels.

What are the potential risks associated with a firm-fixed-price sole-source contract?

A firm-fixed-price (FFP) contract, especially when awarded sole-source, presents specific risks. For the government, the primary risk is paying a potentially inflated price due to the lack of competition. Without competing bids, there's less market pressure to ensure the most cost-effective solution is obtained. The contractor bears the risk of cost overruns; if their expenses exceed the fixed price, their profit margin shrinks or they incur a loss. However, in a sole-source scenario, the government might overpay if the contractor's cost estimates are not rigorously scrutinized or if the contractor has significant leverage. Transparency is also reduced, making it harder to assess the fairness of the price.

What is the expected performance outcome or effectiveness of these TSM services?

The expected performance outcome of the Technology Support Modernization (TSM) services for HQAMC is the enhanced operational efficiency and security of the command's IT infrastructure. Modernization implies upgrading outdated systems, improving performance, and potentially integrating new technologies to meet evolving mission requirements. Effective TSM services should lead to increased system reliability, reduced downtime, improved user support, and better cybersecurity posture. The success of these services will be measured against the contract's performance standards and deliverables, ensuring that HQAMC's technological capabilities align with its strategic objectives and operational needs.

What is Koniag IT Systems, LLC's track record with similar government contracts?

Information regarding Koniag IT Systems, LLC's specific track record with similar government contracts, particularly within the Department of Defense or for IT support and modernization at a headquarters level, is not provided in the data. To assess their track record, one would typically look at past performance evaluations, contract history (including awards, modifications, and terminations), and any reported issues or successes on previous government engagements. A thorough review would involve searching federal procurement databases and performance rating systems to understand their reliability, quality of service, and ability to manage complex IT projects within budget and schedule.

What is the historical spending trend for IT support at HQAMC?

The provided data only includes details for a single, upcoming contract award. It does not offer any historical spending information for IT support services at HQAMC. To understand historical spending patterns, one would need to access procurement data for previous years, identifying all contracts awarded for similar IT support and modernization services to HQAMC. Analyzing this historical data would reveal trends in spending levels, types of services procured, primary contractors, and the evolution of IT needs and investments over time.

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 › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 700, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,721,057

Exercised Options: $13,881,926

Current Obligation: $13,881,926

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Timeline