Defense Health Agency awards $26.4M contract for LAN/WLAN modernization to TEKSYNAP CORPORATION

Contract Overview

Contract Amount: $26,411,044 ($26.4M)

Contractor: Teksynap Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-25

End Date: 2026-09-29

Contract Duration: 734 days

Daily Burn Rate: $36.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES.

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to TEKSYNAP CORPORATION for work described as: DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES. Key points: 1. Contract focuses on essential IT infrastructure modernization for healthcare facilities. 2. Procurement, installation, and project management services are key components. 3. The contract duration of 734 days indicates a significant project timeline. 4. Modernizing local area networks is critical for secure and efficient data transfer in healthcare. 5. The chosen contract type (Cost Plus Fixed Fee) suggests potential for cost overruns if not managed carefully. 6. This award represents a substantial investment in the Defense Health Agency's IT backbone.

Value Assessment

Rating: good

The contract value of $26.4 million for LAN/WLAN modernization appears reasonable given the scope of services including procurement, installation, implementation, closeout, and project management. Benchmarking against similar IT infrastructure modernization projects within the federal government, particularly for large healthcare systems, suggests this pricing is within expected ranges. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility, necessitates close monitoring to ensure value for money and prevent cost creep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 bidders suggests a competitive environment, though the specific details of the bidding process and the number of proposals received would provide a clearer picture of the intensity of competition. A competitive award generally leads to better pricing and service offerings for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and encourages a wider pool of contractors to vie for government work, ultimately leading to more efficient use of public funds.

Public Impact

Beneficiaries include military personnel and their families who rely on the Defense Health Agency for medical services. Services delivered will enhance the reliability and security of IT networks within healthcare facilities. The geographic impact is focused on facilities within Arizona, where the contract is being performed. Workforce implications include potential for IT specialists and project managers involved in network modernization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to higher costs if not managed diligently.
The success of the project is heavily reliant on effective project management and oversight.
Potential for scope creep exists given the nature of IT modernization projects.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Modernization of critical IT infrastructure is essential for healthcare operations.
The contract is for a defined period, allowing for structured project execution.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive. This contract falls under computer systems design services, a segment focused on planning and designing computer systems that integrate hardware, software, and communication technologies. The Defense Health Agency's need for robust and secure networks aligns with the broader trend of federal agencies investing in IT modernization to improve efficiency and cybersecurity. Comparable spending benchmarks for similar network modernization projects within large federal agencies can range from tens to hundreds of millions of dollars, depending on scale and complexity.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem appears limited for this particular award. However, TEKSYNAP CORPORATION, as the prime contractor, may engage small businesses as subcontractors depending on their internal procurement strategies and the specific needs of the project.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency will be maintained through contract reporting mechanisms and performance reviews. While specific Inspector General jurisdiction is not detailed, the Department of Defense Office of Inspector General has broad authority over defense contracts.

Related Government Programs

Defense Health Agency IT Modernization Programs
Federal Network Infrastructure Modernization
Computer Systems Design Services Contracts
Department of Defense IT Procurement

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Project success is dependent on effective project management and technical execution.
Potential for scope creep in IT modernization projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to TEKSYNAP CORPORATION. DEFENSE HEALTH AGENCY LOCAL AREA NETWORK/WIRELESS LOCAL AREA NETWORKS MODERNIZATION PROGRAM. PROCUREMENT, INSTALLATION, IMPLEMENTATION, CLOSEOUT, AND PROJECT MANAGEMENT SERVICES.

Who is the contractor on this award?

The obligated recipient is TEKSYNAP CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2024-09-25. End: 2026-09-29.

What is TEKSYNAP CORPORATION's track record with similar federal IT infrastructure contracts?

TEKSYNAP CORPORATION has a history of performing IT services for the federal government. While specific details on past LAN/WLAN modernization projects of this scale are not immediately available in the provided data, their contract history indicates experience in areas such as IT support, system integration, and project management. A deeper dive into their past performance evaluations and contract awards would be necessary to fully assess their capabilities and reliability for this specific type of complex modernization effort. Their ability to successfully manage Cost Plus Fixed Fee contracts and deliver within defined timelines and budgets on previous projects would be key indicators.

How does the $26.4 million cost compare to similar federal LAN/WLAN modernization projects?

The $26.4 million award for the Defense Health Agency's LAN/WLAN modernization appears to be within a reasonable range for a project of this scope and duration (734 days). Federal IT infrastructure projects, especially those involving procurement, installation, and project management for large organizations like the DHA, often incur significant costs. Factors influencing cost include the number of facilities, the complexity of existing infrastructure, cybersecurity requirements, and the specific technologies being implemented. While a precise benchmark requires detailed comparison of project specifics (e.g., square footage, number of users, required bandwidth), this figure is not an outlier for substantial network upgrades within federal agencies.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the cost of all allowable expenses. If the contractor is inefficient or if unforeseen issues arise that increase costs, the total expenditure for the government can exceed initial estimates. Effective oversight, detailed cost tracking, and robust change management processes are crucial to mitigate this risk. Another risk is ensuring the contractor maintains a high level of effort and quality throughout the project lifecycle, as the fixed fee incentive might be less pronounced compared to fixed-price contracts.

How will the success of this network modernization program be measured?

The success of this network modernization program will likely be measured against several key performance indicators (KPIs) established in the contract. These could include network uptime and availability, data transfer speeds, latency, cybersecurity compliance, successful integration of new hardware and software, and timely completion of project milestones. User satisfaction surveys from DHA personnel and reduction in network-related help desk tickets could also serve as qualitative measures. The contractor's adherence to project management best practices and the final closeout documentation will also be critical evaluation points.

What is the historical spending trend for LAN/WLAN modernization within the Defense Health Agency?

Historical spending data for LAN/WLAN modernization within the Defense Health Agency would reveal trends in their investment in network infrastructure. Without specific historical data, it's reasonable to infer that agencies like the DHA continuously invest in upgrading their IT systems to maintain operational readiness and security. Spending can fluctuate based on budget allocations, identified needs, and the lifecycle of existing equipment. A review of previous DHA IT budgets and specific network upgrade contracts would provide insight into whether this $26.4 million award represents a significant increase, a continuation of a steady investment, or a response to a specific modernization initiative.

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 › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1900 ORACLE WAY STE 800, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,052,477

Exercised Options: $33,027,477

Current Obligation: $26,411,044

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $5,592,464

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9128Z22D0005

IDV Type: IDC

Timeline