DoD's $109M IT Service Operations contract awarded to Agile Defense, LLC, faces scrutiny over value and competition

Contract Overview

Contract Amount: $109,043,759 ($109.0M)

Contractor: Agile Defense, LLC

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2026-03-01

Contract Duration: 2,347 days

Daily Burn Rate: $46.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 18

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IT SERVICE OPERATIONS

Place of Performance

Location: HYATTSVILLE, PRINCE GEORGES County, MARYLAND, 20783

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $109.0 million to AGILE DEFENSE, LLC for work described as: IT SERVICE OPERATIONS Key points: 1. The contract's cost-plus-fixed-fee structure warrants close examination for potential cost overruns. 2. Limited public data on performance metrics makes a comprehensive value-for-money assessment challenging. 3. The high number of bidders suggests a competitive market, but price discovery effectiveness is unclear. 4. The contract's duration and scope indicate significant reliance on Agile Defense for critical IT functions. 5. Geographic concentration in Maryland may limit broader economic benefits. 6. The absence of small business set-asides warrants review for potential missed opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this $109 million IT Service Operations contract is difficult without detailed performance data and comparable contract specifics. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex IT services, can sometimes lead to higher costs if not meticulously managed. Comparing it to similar large-scale IT operations contracts within the Department of Defense would be necessary to determine if the pricing is competitive. The fixed fee component provides some cost control, but the overall value hinges on the efficiency and effectiveness of the services delivered, which are not readily apparent from the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows 18 bids were received, suggesting a robust level of interest and a competitive marketplace for these IT services. A high number of bidders generally supports the idea that the government received a range of proposals and pricing options, which can contribute to achieving a fair market price. However, the specific details of the evaluation process and the final negotiated price are not provided, leaving some uncertainty about the extent to which this competition translated into optimal value for the government.

Taxpayer Impact: The full and open competition with numerous bidders is positive for taxpayers, as it increases the likelihood that the contract was awarded at a competitive price. This process helps prevent price gouging and encourages contractors to offer their best value propositions.

Public Impact

The Department of the Army benefits from sustained IT service operations, ensuring the continuity of critical digital infrastructure. Military personnel and civilian employees likely experience improved IT support and system reliability. The contract supports IT service jobs, potentially within the Maryland region where the contract is managed. Agile Defense, LLC, as the prime contractor, receives significant revenue, contributing to its business growth. The successful execution of this contract is crucial for maintaining the operational readiness of Army systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize spending if not closely monitored.
Lack of specific performance metrics makes it hard to gauge true value for money.
The long contract duration (over 6 years) poses a risk of vendor lock-in and potential complacency.
Concentration of IT operations support with one vendor could create single points of failure.
No explicit small business participation noted, potentially limiting broader economic impact.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
A significant number of bids (18) suggests a healthy market and potential for competitive pricing.
The contract aims to ensure critical IT service operations for the Department of Defense.
Fixed fee component provides some level of cost predictability for the government.
The contract duration aligns with long-term IT infrastructure planning needs.

Sector Analysis

This contract falls within the IT Services sector, specifically focusing on IT service operations and support. The broader IT services market is vast and highly competitive, encompassing everything from software development to cloud computing and managed services. Contracts of this magnitude, supporting major government agencies like the Department of Defense, represent a significant portion of federal IT spending. Comparable spending benchmarks would involve looking at other large-scale IT operations and maintenance contracts awarded to large system integrators or service providers within the federal government, often in the hundreds of millions of dollars over their lifecycle.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary competition was among large businesses. While full and open competition allows all eligible businesses to bid, the absence of specific small business set-asides means that opportunities for small businesses to directly participate as prime contractors on this specific award were limited. However, it is possible that Agile Defense, LLC, may engage small businesses as subcontractors to fulfill certain aspects of the contract, though this is not explicitly detailed in the summary data. Further investigation into subcontracting plans would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is often facilitated through contract award databases like FPDS-NG, where basic information is publicly available. Given the nature of IT service operations for the DoD, the Inspector General's office likely has jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Operations and Maintenance
Cloud Computing Services
Cybersecurity Services
Network Infrastructure Support
Defense Information Systems Agency (DISA) Contracts
Enterprise Resource Planning (ERP) Support

Risk Flags

Cost-plus-fixed-fee pricing requires diligent oversight to prevent cost creep.
Long-term contract duration may limit flexibility and introduce vendor lock-in.
Lack of explicit small business participation noted.
Performance metrics and value-for-money assessment are not readily available.
Geographic concentration of service delivery or management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $109.0 million to AGILE DEFENSE, LLC. IT SERVICE OPERATIONS

Who is the contractor on this award?

The obligated recipient is AGILE DEFENSE, 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 $109.0 million.

What is the period of performance?

Start: 2019-09-27. End: 2026-03-01.

What is the track record of Agile Defense, LLC in performing similar large-scale IT service operations contracts for the federal government?

Agile Defense, LLC has a history of securing and performing federal IT contracts. While specific details on past performance for contracts of this exact scale and scope (IT Service Operations) require deeper database searches, their presence as a prime contractor suggests experience. Analyzing their past performance reviews, contract modifications, and any reported issues on previous DoD or other agency contracts would provide a clearer picture of their reliability, technical capabilities, and ability to manage complex IT service delivery. A review of their contract history might reveal patterns in contract types (e.g., CPFF vs. FFP), award values, and agencies served, offering insights into their core competencies and potential risks.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for IT service operations, and what are the implications for value?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is significant uncertainty in performance requirements, making it suitable for complex IT service operations. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government, as the final cost is dependent on actual expenses incurred. However, it can incentivize contractors to take on challenging projects where cost estimation is difficult. The key to ensuring value with CPFF lies in robust government oversight, clear definition of allowable costs, and effective negotiation of the fixed fee to ensure it reflects the risk and effort involved.

What specific IT services are encompassed within this $109 million contract, and how do they align with the Army's strategic IT goals?

The contract is broadly categorized under 'IT SERVICE OPERATIONS,' which typically includes a wide range of activities such as help desk support, network management, system administration, cybersecurity monitoring, data center operations, and potentially end-user device management. To understand its alignment with Army strategic IT goals, one would need to examine the specific Statement of Work (SOW) and Performance Work Statement (PWS) associated with the contract. These documents detail the required services, performance standards, and objectives. Alignment would be assessed by comparing these requirements against current Army modernization efforts, digital transformation initiatives, cybersecurity mandates, and overall IT infrastructure modernization plans. For instance, if the Army is prioritizing cloud migration, the IT service operations contract should reflect support for those cloud environments.

Given the 18 bids received, what does this indicate about the competitive landscape for large-scale IT service operations within the Department of Defense?

Receiving 18 bids for a large-scale IT service operations contract signifies a highly competitive market for these types of services within the Department of Defense. This suggests that multiple companies possess the capabilities, resources, and desire to compete for significant federal IT contracts. A robust bidding process like this generally benefits the government by fostering price competition, encouraging innovation, and potentially leading to better service quality as contractors strive to differentiate themselves. It also indicates that the barriers to entry for qualified large businesses are not prohibitively high, and that the market is sufficiently mature to support numerous players vying for these substantial opportunities.

What are the potential risks associated with a single contractor, Agile Defense, LLC, managing critical IT service operations for the Department of the Army for potentially over six years?

The primary risks associated with a single contractor managing critical IT service operations for an extended period include vendor lock-in, potential for decreased innovation or service quality over time, and single points of failure. Vendor lock-in can make it difficult and costly to switch providers or integrate new technologies. Over time, without strong performance management and competition, a contractor might become complacent, leading to a decline in service effectiveness. Furthermore, concentrating critical functions with one entity increases vulnerability; if the contractor experiences financial instability, operational failures, or security breaches, the impact on the Army's IT infrastructure could be severe. Mitigating these risks requires rigorous contract oversight, performance monitoring, and contingency planning.

Are there any indications of cost overruns or significant contract modifications in the history of this specific contract or similar contracts held by Agile Defense, LLC?

The provided summary data does not include information on cost overruns or specific contract modifications for this Delivery Order (DO) under a larger contract. To assess this, one would need to access detailed contract modification history through federal procurement databases (like FPDS-NG). Analyzing modifications can reveal changes in scope, price adjustments, and reasons for deviations from the original plan. For CPFF contracts, modifications related to cost increases are not uncommon if allowable costs escalate. Examining Agile Defense, LLC's broader contract portfolio for patterns of frequent or substantial modifications, especially those increasing cost, would be prudent for a comprehensive risk assessment.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W911QX19R0011

Offers Received: 18

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 11600 SUNRISE VALLEY DR STE 440, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $113,009,702

Exercised Options: $113,009,702

Current Obligation: $109,043,759

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $17,191,513

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J18DA023

IDV Type: IDC

Timeline