Army Cyber Center IT Support Contract Awarded to STG LLC for $47.8M

Contract Overview

Contract Amount: $47,814,030 ($47.8M)

Contractor: STG LLC

Awarding Agency: Department of Defense

Start Date: 2017-12-29

End Date: 2019-06-30

Contract Duration: 548 days

Daily Burn Rate: $87.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INFORMATION TECHNOLOGY SUPPORT SERVICES FOR THE UNITED STATES ARMY REGIONAL CYBER CENTER CONTINENTAL UNITED STATES TO PROVIDE THE FULL RANGE OF OPERATIONS, MAINTENANCE AND DEFENSIVE FUNCTIONS OF THE ARMY'S PORTION OF THE GLOBAL INFORMATION GRID, OR LANDWARNET.

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $47.8 million to STG LLC for work described as: INFORMATION TECHNOLOGY SUPPORT SERVICES FOR THE UNITED STATES ARMY REGIONAL CYBER CENTER CONTINENTAL UNITED STATES TO PROVIDE THE FULL RANGE OF OPERATIONS, MAINTENANCE AND DEFENSIVE FUNCTIONS OF THE ARMY'S PORTION OF THE GLOBAL INFORMATION GRID, OR LANDWARNET. Key points: 1. Contract aims to ensure the operational readiness of the Army's global information grid. 2. Focus on defensive functions highlights the critical nature of cybersecurity for military operations. 3. The contract's duration of 548 days suggests a need for sustained, specialized support. 4. Awarded as a sole-source contract, raising questions about potential cost efficiencies and market alternatives. 5. The specific IT services required are essential for maintaining secure and reliable communication networks. 6. Geographic focus on CONUS indicates a concentration of critical cyber infrastructure within the United States.

Value Assessment

Rating: questionable

The contract value of $47.8 million for approximately 18 months of IT support appears substantial. Without direct comparable contracts for similar scope and scale within the Army Regional Cyber Center, a precise value-for-money assessment is challenging. However, the sole-source nature of the award warrants scrutiny regarding whether the pricing reflects competitive market rates or if there was an opportunity for better cost discovery through a more open competition. Benchmarking against industry standards for comprehensive IT operations and maintenance for a critical defense network would be necessary for a definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, STG LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances, such as when only one vendor possesses the required unique capabilities or when urgency precludes a full competition, it limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through open market competition.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the absence of competition may reduce the incentive for the contractor to offer the most competitive pricing. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

The primary beneficiaries are the United States Army's cyber operations, ensuring the security and functionality of its communication networks. Services delivered include operations, maintenance, and defensive functions for the Army's portion of the Global Information Grid (LANDWARNET). The geographic impact is focused within the Continental United States (CONUS), supporting critical cyber infrastructure. Workforce implications may involve specialized IT and cybersecurity professionals employed by STG LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for cost savings.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for vendor lock-in if STG LLC develops unique, indispensable capabilities.

Positive Signals

Contract addresses critical cybersecurity needs for Army operations.
STG LLC likely possesses specialized expertise required for this niche support.
Sustained support ensures continuity of essential cyber defense functions.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT support services for defense. The IT services market is vast and highly competitive, with numerous companies offering specialized support. However, contracts for highly specialized cyber operations within the Department of Defense often involve unique requirements and security clearances, which can limit the pool of eligible contractors. Comparable spending benchmarks for similar large-scale, mission-critical IT support within defense agencies would typically be in the tens to hundreds of millions of dollars annually, depending on the scope and complexity.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of subcontracting requirements for small businesses (sb: false). This suggests that the primary contractor, STG LLC, is likely a larger entity, and the contract's execution may not directly involve significant opportunities for small business participation through set-asides or mandated subcontracting. This could limit the impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army contracting officer and potentially program managers responsible for cyber operations. Accountability measures would be defined within the contract's terms and conditions, including performance metrics and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to ensure the proper use of government funds and prevent fraud, waste, and abuse.

Related Government Programs

Department of Defense IT Support Services
Army Cyber Command Operations
Global Information Grid Maintenance
Cybersecurity Services Contracts
Information Technology Infrastructure Support

Risk Flags

Sole-source award
Potential for cost overruns
Limited market research evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.8 million to STG LLC. INFORMATION TECHNOLOGY SUPPORT SERVICES FOR THE UNITED STATES ARMY REGIONAL CYBER CENTER CONTINENTAL UNITED STATES TO PROVIDE THE FULL RANGE OF OPERATIONS, MAINTENANCE AND DEFENSIVE FUNCTIONS OF THE ARMY'S PORTION OF THE GLOBAL INFORMATION GRID, OR LANDWARNET.

Who is the contractor on this award?

The obligated recipient is STG 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 $47.8 million.

What is the period of performance?

Start: 2017-12-29. End: 2019-06-30.

What is STG LLC's track record with the Department of the Army and similar cyber support contracts?

Assessing STG LLC's track record requires a deeper dive into their contract history with the Department of the Army and other federal agencies, particularly for IT support and cybersecurity services. Information on past performance, including successful contract completions, any performance issues, and client satisfaction, would be crucial. Specifically, examining their experience with large-scale, mission-critical cyber operations similar to the Army Regional Cyber Center's needs would provide context. Without access to specific past performance reviews or detailed contract award histories, it's difficult to definitively gauge their suitability beyond the fact they were selected for this sole-source award. Further investigation into their financial stability and technical capabilities would also be warranted.

How does the $47.8 million contract value compare to similar IT support contracts for cyber operations within the DoD?

Comparing the $47.8 million contract value for approximately 18 months of IT support requires benchmarking against similar contracts within the DoD. Contracts for comprehensive IT operations, maintenance, and defensive functions for critical infrastructure like the Global Information Grid can vary significantly based on scope, duration, and specific technological requirements. While this figure represents a substantial investment, it may be within the expected range for specialized cyber support. However, the sole-source nature of this award makes direct price comparison difficult, as competitive bidding often drives down costs. A thorough analysis would involve identifying comparable contracts, adjusting for inflation and scope differences, and evaluating the pricing structure (e.g., cost-plus-fixed-fee) against industry norms for similar services.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with awarding this contract on a sole-source basis include potential overpayment due to a lack of competitive pricing, limited innovation from the incumbent contractor who faces no direct competition, and a reduced incentive for the contractor to maintain the highest levels of efficiency and cost-effectiveness. There's also a risk that the government may not be aware of or have access to potentially superior or more cost-effective solutions available from other vendors in the market. Furthermore, sole-source awards can sometimes raise concerns about fairness and equal opportunity for other qualified businesses. The government must have a strong justification for bypassing the competitive process to mitigate these risks.

How effective are the 'operations, maintenance, and defensive functions' likely to be under this contract?

The effectiveness of the 'operations, maintenance, and defensive functions' under this contract hinges on several factors, including the clarity and specificity of the performance work statement (PWS), the capabilities and experience of STG LLC, and the oversight provided by the Army. Assuming STG LLC is a capable provider and the PWS is well-defined, the contract should ensure the continued availability and security of the Army's portion of the Global Information Grid. However, the sole-source nature means the government is relying on STG LLC's stated capabilities without the validation that a competitive process might provide. Performance metrics and regular reviews will be critical to monitoring and ensuring effectiveness throughout the contract period.

What are the historical spending patterns for IT support at the Army Regional Cyber Center?

To analyze historical spending patterns for IT support at the Army Regional Cyber Center, one would need access to historical contract data for this specific entity or similar cyber command units within the Army. This would involve identifying previous contracts for IT support, cybersecurity, network operations, and maintenance, noting their values, durations, award types (competitive vs. sole-source), and the contractors involved. Understanding these patterns would reveal trends in spending, identify potential increases or decreases in costs over time, and highlight any shifts in procurement strategies. Without specific historical data for this center, it's impossible to provide a detailed analysis of past spending.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications Carriers › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W91RUS17R2018

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: STG Group, Inc. (UEI: 079257316)

Address: 11091 SUNSET HILLS RD STE 200, RESTON, VA, 20190

Business Categories: Category Business, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,213,557

Exercised Options: $49,213,557

Current Obligation: $47,814,030

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline