DoD's $11.7M Cisco Maintenance Contract Awarded to GovConnection Inc. Shows Fair Value

Contract Overview

Contract Amount: $11,716,104 ($11.7M)

Contractor: Govconnection Inc

Awarding Agency: Department of Defense

Start Date: 2008-03-04

End Date: 2010-11-30

Contract Duration: 1,001 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CISCO CONSOLIDATED MAINT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.7 million to GOVCONNECTION INC for work described as: CISCO CONSOLIDATED MAINT Key points: 1. The contract represents a moderate investment in essential IT maintenance services for the Department of Defense. 2. GovConnection Inc. secured this award through full and open competition, indicating a competitive bidding process. 3. The duration of the contract (1001 days) suggests a need for sustained support, with potential for follow-on work. 4. The fixed-price nature of the contract helps mitigate cost overrun risks for the government. 5. Performance was rated as 'Acceptable' (VA: 'good'), suggesting satisfactory service delivery. 6. The contract's value is within a reasonable range for consolidated IT maintenance services of this scope.

Value Assessment

Rating: good

The contract's total value of approximately $11.7 million over roughly 33 months appears reasonable for consolidated IT maintenance services. Benchmarking against similar large-scale IT maintenance contracts for federal agencies suggests that the pricing is competitive. The fixed-price structure further supports value for money by shifting cost risk to the contractor. While specific per-unit cost data is not provided, the overall award amount aligns with industry standards for comprehensive support of Cisco equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bidders indicates a moderate level of competition for this IT maintenance requirement. While not an extremely high number of bidders, it suggests that the market was sufficiently engaged, and the government had options to choose from, which generally leads to better price discovery and selection of a qualified vendor.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages the selection of the best value offer.

Public Impact

The Department of Defense benefits from uninterrupted IT infrastructure maintenance, ensuring operational readiness. This contract supports the ongoing functionality of critical Cisco networking and communication systems. The services delivered are essential for maintaining secure and reliable data transmission within military operations. The geographic impact is likely widespread, supporting DoD installations across various locations. The contract indirectly supports IT professionals employed by GovConnection Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future maintenance needs are heavily reliant on this specific vendor's expertise.
Reliance on a single vendor for consolidated maintenance could pose a risk if the vendor experiences financial instability or significant operational disruptions.

Positive Signals

Consolidation of maintenance services under one contract can lead to administrative efficiencies and potentially cost savings.
The fixed-price contract structure provides cost certainty for the government.
Award through full and open competition suggests a competitive market and a fair price was likely achieved.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on maintenance and support for networking hardware. The IT services market is vast, with significant government spending allocated to maintaining complex infrastructure. This contract represents a portion of the Department of Defense's overall IT spending, aimed at ensuring the operational integrity of its communication networks. Comparable spending benchmarks for large federal IT maintenance contracts often run into tens or hundreds of millions of dollars annually, making this $11.7 million contract a moderate-sized investment.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements for small businesses were mandated. GovConnection Inc. is a large business. Therefore, this award does not directly contribute to small business set-aside goals. The lack of explicit small business subcontracting provisions means there is no direct mechanism within this contract to channel funds or opportunities to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Army. Performance monitoring, invoice review, and adherence to contract terms are standard oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense IT Services Contracts
Network Equipment Maintenance Contracts
IT Infrastructure Support Services
Government-wide IT Acquisition Contracts (GSA Schedules)
Cisco Systems Support Contracts

Risk Flags

Performance Risk: 'Acceptable' rating suggests potential for minor deficiencies.
Vendor Stability Risk: Reliance on a single vendor for critical maintenance.
Contract Complexity Risk: Managing a large, consolidated IT maintenance agreement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.7 million to GOVCONNECTION INC. CISCO CONSOLIDATED MAINT

Who is the contractor on this award?

The obligated recipient is GOVCONNECTION 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 $11.7 million.

What is the period of performance?

Start: 2008-03-04. End: 2010-11-30.

What was the track record of GovConnection Inc. with similar federal IT maintenance contracts prior to this award?

Prior to this award in March 2008, GovConnection Inc. had a history of performing IT services for the federal government. Analyzing their contract history in FPDS would reveal the types and values of previous awards, including maintenance and support contracts. A review of past performance ratings on those contracts would indicate their reliability and ability to meet government requirements. For instance, if they had a consistent record of 'Satisfactory' or 'Exceptional' performance on similar large-scale maintenance contracts, it would bolster confidence in their ability to execute this $11.7 million award effectively. Conversely, a history of poor performance or contract disputes would raise concerns.

How does the per-unit cost of this contract compare to market rates for Cisco maintenance?

Determining the precise per-unit cost for this contract is challenging without a detailed breakdown of the services and equipment covered. However, the total award of $11.7 million over approximately 33 months suggests an average annual value of roughly $4.25 million. For large enterprise-level maintenance agreements covering a broad range of Cisco hardware and software, this figure is generally considered within a competitive range. Market rates can vary significantly based on the specific product lines (e.g., routers, switches, firewalls, unified communications), the level of support required (e.g., 24/7 response vs. next-business-day), and the volume of equipment. Given that this was awarded under full and open competition, it implies that the pricing was deemed fair and reasonable by the contracting agency relative to the market at the time of award.

What are the primary risks associated with a consolidated IT maintenance contract of this magnitude?

The primary risks associated with a consolidated IT maintenance contract of this magnitude include vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility and negotiation power. There's also the risk of vendor performance failure; if GovConnection Inc. were to experience significant financial difficulties, operational disruptions, or a decline in service quality, it could severely impact the Department of Defense's IT infrastructure. Furthermore, the complexity of managing a large consolidated contract increases the potential for administrative errors or misinterpretations of service level agreements. Ensuring adequate oversight and contingency planning is crucial to mitigate these risks.

How effective was the 'Acceptable' performance rating in ensuring the government received value for its investment?

An 'Acceptable' performance rating suggests that GovConnection Inc. met the minimum requirements of the contract but did not necessarily exceed expectations. While 'Acceptable' indicates that the government received the core services it paid for, it implies there may have been minor deficiencies or areas where performance could have been improved. For a critical function like IT maintenance, 'Acceptable' performance might mean that while systems remained operational, there could have been delays in response times, less proactive issue resolution, or other minor shortcomings. This rating suggests that the value received was adequate, but perhaps not optimal, and highlights the importance of clear performance metrics and active contract management to ensure the government consistently gets the best possible value.

What does the historical spending pattern for Cisco maintenance by the Department of Defense reveal?

Analyzing historical spending patterns for Cisco maintenance by the Department of Defense (DoD) would likely show a consistent and significant investment in network infrastructure support. The DoD relies heavily on robust communication networks, making ongoing maintenance and upgrades for equipment like Cisco's a necessity. Historical data might reveal trends in contract values, the types of services procured (e.g., hardware maintenance, software support, professional services), and the primary contracting vehicles used (e.g., direct awards, GSA schedules, competitive solicitations). It could also indicate shifts in strategy, such as moving towards more consolidated contracts like this one or increasing reliance on specific vendors over time. Understanding these patterns provides context for the $11.7 million award, suggesting it aligns with a sustained need for such services.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: PC Connection (UEI: 166964986)

Address: 7503 STANDISH PL, ROCKVILLE, MD, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,716,104

Exercised Options: $11,716,104

Current Obligation: $11,716,104

Parent Contract

Parent Award PIID: NNG07DA32B

IDV Type: GWAC

Timeline