DoD awards $19.1M for computer systems design, with limited competition and a long performance period

Contract Overview

Contract Amount: $19,156,593 ($19.2M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2023-09-30

End Date: 2026-07-30

Contract Duration: 1,034 days

Daily Burn Rate: $18.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: P&I B1555 FWA

Place of Performance

Location: FORT WAINWRIGHT, FAIRBANKS NORTH STAR County, ALASKA, 99703

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $19.2 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: P&I B1555 FWA Key points: 1. The contract value of $19.1M for computer systems design services appears reasonable given the scope and duration. 2. Limited competition for this contract may have impacted pricing and potentially reduced value for money. 3. The contract's duration of over 1000 days suggests a need for sustained services, but also carries performance risks. 4. The firm fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if managed well. 5. The contract is positioned within the IT services sector, a critical area for defense operations. 6. The absence of small business set-aside indicates this was not specifically targeted to smaller enterprises.

Value Assessment

Rating: fair

Benchmarking this $19.1M contract against similar computer systems design services for the Department of Defense is challenging without more specific service details. However, the duration of over 1000 days suggests a significant undertaking. The firm fixed-price nature is generally favorable for cost control, but the limited competition raises concerns about whether the government secured the best possible price. Without comparative data on per-unit costs or labor rates for comparable services, a definitive value assessment is difficult.

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 among multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to unique capabilities, existing infrastructure, or urgent needs. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Sole-source awards limit taxpayer value by removing the competitive pressure that drives down prices. This means the government may be paying a premium for the services rendered.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential computer systems design services. These services are crucial for maintaining and potentially upgrading the IT infrastructure supporting military operations. The contract's performance is located in Alaska (AK), indicating a specific geographic focus for these IT services. The contract likely supports a workforce of IT professionals and system designers, both within the contractor's organization and potentially government personnel interacting with the systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for money.
Long contract duration increases the risk of scope creep or obsolescence if not managed proactively.
Lack of transparency in the justification for sole-source award makes it difficult to assess necessity.
Performance in a remote location like Alaska could introduce logistical challenges and higher operational costs.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
The contract addresses a specific need within the Department of the Army's IT infrastructure.
The award specifies a clear performance period, allowing for defined service delivery.

Sector Analysis

The IT services sector is a vast and critical component of the federal government's operational capabilities. This contract falls under computer systems design, a sub-sector focused on planning, integrating, and managing complex IT systems. The federal government is a major consumer of these services, with significant spending allocated annually to maintain and modernize its technological infrastructure. Comparable spending benchmarks would typically involve analyzing other large-scale IT system design contracts awarded by defense agencies or other federal departments for similar scope and complexity.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary contractor, Siemens Government Technologies Inc., is likely a large business, and the focus was on fulfilling the service requirement rather than promoting small business participation. Consequently, the direct impact on the small business ecosystem for this specific award is likely minimal, though the prime contractor may engage small businesses in their supply chain independently.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification and terms would be subject to review by relevant procurement oversight bodies within the Department of Defense. Transparency is limited due to the sole-source nature, but contract performance, deliverables, and financial expenditures would be monitored. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Modernization Programs
Army Command and Control Systems Support
Federal Civilian IT Services Contracts
Defense Information Systems Agency (DISA) Contracts

Risk Flags

Sole-source award may indicate lack of competition, potentially impacting price.
Long contract duration increases risk of scope creep and technological obsolescence.
Performance location in Alaska could present logistical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.2 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. P&I B1555 FWA

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.2 million.

What is the period of performance?

Start: 2023-09-30. End: 2026-07-30.

What specific computer systems design services are being procured under this contract?

The provided data indicates the contract is for 'Computer Systems Design Services' (NAICS code 541512). However, the specific nature of these services is not detailed. Typically, this can encompass a wide range of activities including needs assessment, system architecture design, integration of hardware and software, network design, cybersecurity integration, and the development of custom software solutions. For this Department of the Army contract, it likely pertains to critical defense systems, potentially involving command and control, logistics, intelligence, or operational support systems. Further details would be found in the contract's Statement of Work (SOW).

What is the justification for awarding this contract on a sole-source basis to Siemens Government Technologies Inc.?

The data explicitly states the contract type as 'NOT COMPETED', implying a sole-source or limited competition award. The specific justification for this sole-source award is not provided in the abbreviated data. Common reasons for sole-source awards include unique capabilities possessed by only one vendor, urgent and compelling needs where competition is impractical, or when the contract is a follow-on to a previous award where the original contractor's proprietary data or system knowledge is essential. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), the precise rationale remains unknown.

How does the $19.1M contract value compare to historical spending on similar services by the Department of the Army?

Comparing the $19.1M contract value requires context on the scope, duration, and specific services rendered. The contract duration is 1034 days (approximately 2.8 years). To benchmark effectively, one would need to analyze historical spending on similar 'Computer Systems Design Services' (NAICS 541512) awarded by the Department of the Army, ideally with comparable durations and complexity. Without access to a broader contract database or the specific Statement of Work, it's difficult to definitively state if $19.1M represents high, low, or average spending. However, for a multi-year, sole-source IT services contract within a defense agency, this value is within a plausible range, though the lack of competition prevents a strong value-for-money assessment.

What are the potential risks associated with a sole-source contract of this duration?

Sole-source contracts, especially those with a long duration like this 1034-day award, carry several risks. Firstly, the absence of competition means the government may not be achieving the best possible price, potentially leading to overpayment. Secondly, a long performance period increases the risk of scope creep, where the project's requirements expand beyond the original agreement, leading to cost overruns or delays. Thirdly, technology can rapidly evolve; a long-term contract might lock the government into outdated systems or services if not carefully managed and updated. Finally, sole-source awards can reduce market responsiveness and innovation by limiting opportunities for other capable vendors.

What performance metrics or oversight mechanisms are likely in place for this contract?

While specific performance metrics are not detailed in the provided data, standard government contracting practices dictate that performance will be monitored. For a 'Computer Systems Design Services' contract, metrics could include adherence to project timelines, quality of deliverables (e.g., system designs, documentation), successful system integration, adherence to cybersecurity standards, and overall customer satisfaction. Oversight would typically involve a Contracting Officer's Representative (COR) or Technical Point of Contact (TPOC) from the Department of the Army responsible for monitoring contractor performance, approving invoices, and ensuring compliance with the contract terms and Statement of Work. Regular progress meetings and reporting requirements are also standard.

Industry Classification

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

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912DY20R0025

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Siemens Aktiengesellschaft

Address: 1881 CAMPUS COMMONS DR STE 200, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $22,490,895

Exercised Options: $19,156,593

Current Obligation: $19,156,593

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY22D0071

IDV Type: IDC

Timeline