DoD's $153M IT contract for computing infrastructure awarded to Perot Systems Government Services shows mixed value and competition

Contract Overview

Contract Amount: $15,308,213 ($15.3M)

Contractor: NTT Data Services Federal Government, LLC

Awarding Agency: Department of Defense

Start Date: 2005-08-09

End Date: 2008-06-30

Contract Duration: 1,056 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: IT

Official Description: 200512!501429!2100!W91QUZ!ACA, ITEC4 !GS00F0049M !C!N! !N!W91QUZ05F0151! !20050809!20050819!044673937!175344753!191692813!N!PEROT SYSTEMS GOVERNMENT SERVI!8270 WILLOW OAKS CORPORATE!FAIRFAX !VA!22031!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000001922958!N!N!000000000000!V999!OTHER TRANSPORTATION TRAVEL & RELOCATION SERVICES !S1 !SERVICES !M49 !DTS !541611!E! !6! ! ! ! ! !20200930!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !000! ! ! ! ! ! ! !2100!W81GYE!0001! !

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC for work described as: 200512!501429!2100!W91QUZ!ACA, ITEC4 !GS00F0049M !C!N! !N!W91QUZ05F0151! !20050809!20050819!044673937!175344753!191692813!N!PEROT SYSTEMS GOVERNMENT SERVI!8270 WILLOW OAKS CORPORATE!FAIRFAX !VA!22031!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000001922958!N!N!000000000000!V999… Key points: 1. The contract's value proposition is unclear due to a lack of detailed performance metrics and benchmarking. 2. Competition was full and open, suggesting a potentially competitive pricing environment, but the number of bidders is not specified. 3. Risk indicators are moderate, with a fixed-price contract type potentially mitigating cost overruns but requiring clear performance standards. 4. The contract falls within the IT sector, specifically supporting computing infrastructure and data processing needs. 5. This award represents a small portion of the overall federal IT spending, but highlights specific service categories. 6. The contract's duration and fixed-price nature warrant scrutiny for potential cost efficiencies and performance alignment.

Value Assessment

Rating: fair

The total contract value of $153,082,132.25 over approximately 3.5 years (1056 days) suggests a significant investment in IT services. However, without specific performance metrics or comparison to similar contracts for computing infrastructure, data processing, and web hosting, it is difficult to definitively assess value for money. The fixed-price contract type implies a defined scope, but the absence of detailed service level agreements or outcome-based measures makes a robust value assessment challenging. Benchmarking against industry standards for similar services would be necessary for a more precise evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows all responsible sources to submit offers. This approach is generally favored for maximizing competition and achieving the best value for the government. However, the specific number of bids received is not detailed in the provided data, which is crucial for understanding the actual level of competition and its impact on price discovery. A high number of bidders typically leads to more competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive market rates, potentially leading to cost savings compared to less competitive procurement methods.

Public Impact

The primary beneficiary is the Department of Defense, which receives essential IT services for its operations. Services delivered include computing infrastructure, data processing, and web hosting, crucial for modern military operations. The geographic impact is primarily within Virginia, where the contractor is located, but the services likely support broader DoD missions. Workforce implications include employment opportunities for IT professionals within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess if the full value of the contract was realized.
The fixed-price nature, while mitigating cost overruns, could lead to scope creep or reduced service quality if not managed tightly.
Limited information on the number of bidders prevents a full assessment of competitive pressure on pricing.

Positive Signals

Awarded under full and open competition, indicating a broad search for qualified vendors.
The contract type (fixed-price) provides cost certainty for the government, assuming the scope is well-defined.
The contractor, Perot Systems Government Services (now NTT DATA), has a significant presence in the federal IT market.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' (NAICS 518210). This is a critical area for government operations, supporting everything from data storage and processing to network management and cloud services. Federal spending in this category is substantial, driven by the increasing reliance on digital infrastructure and advanced analytics. Comparable spending benchmarks would involve analyzing other large IT service contracts awarded by the DoD and other federal agencies for similar capabilities, considering factors like contract duration, scope, and competition.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, Perot Systems Government Services, is a large entity, and its subcontracting practices would need to be assessed separately to understand any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the DoD Inspector General. Transparency is generally facilitated through contract award databases like FPDS, which provide basic details of the award. However, detailed performance reports and audits are often not publicly available, limiting a full assessment of accountability measures.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Department of Defense Enterprise IT Services
Cloud Computing Services Contracts
Data Center Operations Contracts

Risk Flags

Lack of detailed performance metrics.
Limited information on the number of bidders.
Potential for scope creep or quality reduction in fixed-price contracts.
Need for benchmarking against comparable contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.3 million to NTT DATA SERVICES FEDERAL GOVERNMENT, LLC. 200512!501429!2100!W91QUZ!ACA, ITEC4 !GS00F0049M !C!N! !N!W91QUZ05F0151! !20050809!20050819!044673937!175344753!191692813!N!PEROT SYSTEMS GOVERNMENT SERVI!8270 WILLOW OAKS CORPORATE!FAIRFAX !VA!22031!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000001922958!N!N!000000000000!V999!OTHER TRANSPORTATION TRAVEL & RELOCATION SERVICES !S1 !SERVICES !M49 !DTS !541611!E! !6! ! ! ! ! !20200930!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !000! ! ! ! ! ! ! !2100!W81GYE!0001! !

Who is the contractor on this award?

The obligated recipient is NTT DATA SERVICES FEDERAL GOVERNMENT, 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 $15.3 million.

What is the period of performance?

Start: 2005-08-09. End: 2008-06-30.

What was the specific scope of services provided under this contract, and how did it align with the contractor's capabilities?

The contract data indicates the scope included services under NAICS code 518210, which covers 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services.' This broadly encompasses providing the necessary hardware, software, and network infrastructure to support IT operations, including data storage, processing, and online accessibility. Perot Systems Government Services (now NTT DATA) has historically specialized in IT services for government and commercial clients, including infrastructure management, application development, and cybersecurity. The alignment would depend on the specific technical requirements outlined in the contract's Statement of Work (SOW), which is not detailed here. A thorough analysis would require reviewing the SOW to confirm the precise services and deliverables expected.

How does the per-unit cost or overall value of this contract compare to similar IT service contracts awarded by the Department of Defense during the same period?

Benchmarking this contract's value requires comparing it to similar IT service contracts for computing infrastructure, data processing, and web hosting awarded by the DoD between 2005 and 2008. Without access to a detailed database of comparable contracts with specific service details and pricing, a precise comparison is difficult. However, the total value of approximately $153 million over roughly 3.5 years suggests an average annual value of around $43.7 million. This figure needs to be contextualized by the specific services rendered, the number of users supported, and the complexity of the infrastructure. A comprehensive analysis would involve identifying contracts with similar NAICS codes and service descriptions, adjusting for inflation and contract duration, and then comparing average annual costs or key performance indicators.

What were the primary risk indicators associated with this contract, and how were they managed?

The primary risk indicators for this contract likely revolved around performance, cost, and schedule. The contract type is Fixed Price (PT: FIXED PRICE), which shifts much of the cost risk to the contractor. However, this also introduces a risk of the contractor cutting corners on quality or service to maintain profitability, especially if the initial price was too low or the scope was underestimated. The duration of over three years (DUR: 1056 days) also presents a risk of technological obsolescence or changing requirements. Management of these risks would typically involve robust oversight from the contracting officer, clear performance metrics and Service Level Agreements (SLAs) in the contract, and regular progress reviews. The absence of specific risk mitigation strategies in the provided data makes a definitive assessment challenging.

What was the historical spending pattern for similar IT services by the Department of the Army prior to this award?

Analyzing historical spending patterns for similar IT services by the Department of the Army prior to August 2005 would require access to historical federal procurement data, such as from the Federal Procurement Data System (FPDS) or similar archives. This contract, awarded in 2005 for services extending to 2008, falls within a period of significant IT modernization and outsourcing trends within the DoD. Spending on computing infrastructure, data processing, and web hosting was likely increasing as agencies moved towards more centralized IT management and explored efficiencies. Understanding the Army's specific spending trajectory in these areas would involve looking at the volume and value of contracts awarded under relevant NAICS codes (like 518210) and Product Service Codes (PSCs) during the preceding years to identify trends in demand and investment.

Did the contractor, Perot Systems Government Services, have a prior track record with the Department of the Army or other federal agencies for similar services?

Perot Systems Government Services, prior to its acquisition by Dell and later by NTT DATA, was a significant player in the federal IT contracting space. It is highly probable that they had a substantial track record with the Department of the Army and other federal agencies for similar IT services, including computing infrastructure, data processing, and web hosting, before this 2005 award. Federal agencies often prefer to award contracts to vendors with proven past performance, as it is considered a key evaluation factor. To confirm this, one would need to search historical procurement databases for previous contracts awarded to Perot Systems Government Services by the DoD or other relevant agencies, examining the scope, value, and performance history of those contracts.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › OTHER TRANSPORT, TRAVEL, RELOCAT SV

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Contractor Details

Parent Company: Dell Technologies Inc. (UEI: 601839660)

Address: 8550 ARLINGTON BLVD, FAIRFAX, VA, 22031

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: GS00F0049M

IDV Type: FSS

Timeline