DoD's $64M Cybersecurity Contract with Empower AI Raises Questions on Competition and Value
Contract Overview
Contract Amount: $64,212,894 ($64.2M)
Contractor: Empower AI, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-07-01
End Date: 2019-12-31
Contract Duration: 548 days
Daily Burn Rate: $117.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: ARMY DEPARTMENT OF DEFENSE INFORMATION NETWORK (DODIN) CYBERSECURITY AND NETWORK OPERATIONS SERVICES SUPPORT (ADCNOSS)
Place of Performance
Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $64.2 million to EMPOWER AI, INC. for work described as: ARMY DEPARTMENT OF DEFENSE INFORMATION NETWORK (DODIN) CYBERSECURITY AND NETWORK OPERATIONS SERVICES SUPPORT (ADCNOSS) Key points: 1. Contract awarded to Empower AI, Inc. for cybersecurity and network operations. 2. Significant value of $64.2 million over its period of performance. 3. Awarded as a definitive contract, indicating a specific, pre-defined scope. 4. The 'NOT COMPETED' status is a key area for scrutiny. 5. The sector is IT services, specifically Computer Systems Design.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar cybersecurity support contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was 'NOT COMPETED,' suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential cybersecurity services.
Public Impact
Ensures critical cybersecurity and network operations for the Army's DODIN. Potential for reduced innovation and higher costs due to non-competitive award. Impacts the ability of other capable vendors to secure government contracts. Raises concerns about the government's procurement strategy for IT services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee structure
- No small business participation noted
Positive Signals
- Provides essential cybersecurity services
- Supports critical DoD network infrastructure
Sector Analysis
This contract falls within the IT services sector, specifically Computer Systems Design. Government spending in this area is substantial, and competitive bidding is typically expected to ensure value for money.
Small Business Impact
The data indicates that small businesses were not involved in this contract, as 'sb' is false. This represents a missed opportunity to support small business growth within the federal contracting landscape.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to understand the justification and ensure proper procedures were followed. Accountability for the pricing and performance rests with the contracting officers and Empower AI.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition raises value concerns.
- Cost Plus Fixed Fee structure may lead to higher costs.
- No small business participation.
- Potential for vendor lock-in.
- Limited transparency on justification for non-competition.
Tags
computer-systems-design-services, department-of-defense, az, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $64.2 million to EMPOWER AI, INC.. ARMY DEPARTMENT OF DEFENSE INFORMATION NETWORK (DODIN) CYBERSECURITY AND NETWORK OPERATIONS SERVICES SUPPORT (ADCNOSS)
Who is the contractor on this award?
The obligated recipient is EMPOWER AI, 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 $64.2 million.
What is the period of performance?
Start: 2018-07-01. End: 2019-12-31.
What was the specific justification for not competing this significant cybersecurity contract, and were alternative procurement strategies considered?
The justification for not competing this contract is crucial for understanding the procurement decision. Agencies typically sole-source when only one vendor possesses the unique capability, or in urgent situations. Without this justification, it's difficult to assess if taxpayer funds were used efficiently or if a competitive process could have yielded better pricing and innovation.
How does the Cost Plus Fixed Fee structure ensure cost control and prevent potential overruns in this cybersecurity support contract?
Cost Plus Fixed Fee contracts aim to control costs by adding a predetermined fixed fee to the allowable costs. However, the 'cost' component can still escalate if the scope of work expands or if efficiencies are not realized. Robust oversight and clear performance metrics are essential to manage this structure effectively and prevent excessive spending.
What is the long-term strategy for ensuring competitive sourcing of cybersecurity and network operations services to maximize value and foster innovation?
The long-term strategy should prioritize competitive sourcing for recurring needs like cybersecurity. This encourages market competition, drives down prices, and spurs innovation. Agencies should regularly review their requirements to identify opportunities for full and open competition, ensuring taxpayers receive the best value and that the cybersecurity landscape benefits from diverse technological advancements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: HIG Capital Management, Inc.
Address: 11730 PLAZA AMERICA DR STE 700, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $64,212,894
Exercised Options: $64,212,894
Current Obligation: $64,212,894
Subaward Activity
Number of Subawards: 18
Total Subaward Amount: $11,002,795
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-07-01
Current End Date: 2019-12-31
Potential End Date: 2020-01-31 00:00:00
Last Modified: 2022-05-19
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