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August 27, 2008 epipeline's Eye on ... Other Computer Related Services, NAICS 541519
This report takes an in-depth look at the 'Other Computer Related Services' industry, NAICS 541519. To understand the future, one must study the past. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enables you to develop the best positioning and strategy for your company to more effectively compete for government contracts. The following graph illustrates one such perspective: the top Government departments buying these services over the last four fiscal years
To understand this NAICS code better, epipeline has researched the following questions:
· How are these contracts procured? · Where are these contracts performed?
NAICS 541519 represents computer related services, including computer disaster recovery services or software installation services. However, this does not include the following aspects: · Custom programming, · Systems integration design, and · Facilities management services.
This NAICS was previously represented by a single Standard Industrial Classification (SIC) code, 7379.
The size
standard associated with NAICS 541519 is $25.0 Million
(effective August 18, 2008), which means that a company, including its
affiliates, would be considered a "small business" if their average annual gross
receipts does not exceed $25.0 Million for the past three years. If a company
has not been in business for three years, the average weekly revenue for the
number of weeks the company has been in business
is multiplied by 52 to determine the average annual receipts. There is one
exception to this size standard, for "Information
Technology Value Added Resellers." The size standard for NAICS 541519 as it
applies to that function, is 150 employees.
** Note: it is possible that some Defense spending for the more recent fiscal years (FY05 to present) is not as widely reported as earlier years. These numbers will likely increase as more departments and agencies report their contract spending.
The United States Navy was the largest buyer for these services for the last four fiscal years (FY04 through Q2FY08), with over $4.4 Billion in contract spending, comprising over 20% of the market share for NAICS 541519. The United States Army, the United States Air Force, the Defense Information Systems Agency (DISA) all had reported spending over $2 Billion for this period, and GSA's Federal Technology Service (FTS) was just shy of that mark, with $1.99 Billion.
According to the Central Contractor Registry (CCR), there are 16,485 companies registered under NAICS 541519 (source: active registrants, www.ccr.gov as of 08/13/2008). Of this number, 13,927 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category): · 1,901 SBA Certified 8(a) contractors; · 651 SBA Certified HUBZone contractors; and · 1,762 Service Disabled Veteran Owned Small Businesses (SDVOSB).
NOTE, the CCR website states, "As of the July 30, 2008 release (4.08.2), CCR-registered vendors may elect not to display their registration in the CCR/FedReg Public Search." This could mean that there are more active contractors registered with the CCR then the resulting totals above represent.
The two charts below identify the top 10 Companies, by market share, for the period of FY04 through Q2FY08. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the acquisition strategies listed below. The contract dollars represented on this second chart may not include all contract dollars for the individual contractor. · 8(a) Competed · 8(a) Small Disadvantaged (SDB) set-aside · 8(a) sole-source · SDB set-aside · SDB, 8(a) with HUBZone · Combination HUBZone and 8(a) · HUBZone set-aside · HUBZone sole-source · Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside · SDVOSB sole-source · Emerging Small Business set-aside · Very Small Business set-aside · Reserved for Small Businesses ($2501 to $100,000) · Total Small Business set-aside
Electronic Data Systems (EDS) holds the top spot on the unrestricted competition list, with $2.7 Billion in contract dollars for FY04-Q2FY08 and over 17% of the market share. Accenture LLP is a distant second, with 5.49% of the market share, which equates to over $893 Million. All firms in the top ten had reported spending above $250 Million and another 24 companies held contracts with reported spending over $100 Million for the FY04 to Q2FY08 period. PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.
The combined contract spending for contracts awarded under
"restricted competition," as outlined above, totaled over $1.57 Billion for FY04
through Q2FY08. RS Information Systems Inc. (now Wyle Information Systems Group)
had the highest reported spending with over $90 Million, or 5.77% of the market
share. Indus Secure Network Solutions LLC, iGov Technologies Inc., and
Interactive Technology Solutions LLC all reported contract spending above $50
Million for this period. All firms in the top ten were above $20 Million, along
with another four companies outside the top ten.
PLEASE NOTE: as this is a listing by Company name, rather than PARENT
company, some companies may have more than one ranking, which may not reflected
in the chart below.
HOW ARE THESE CONTRACTS PROCURED?
Over 58% of the contract dollars spend during the FY04 through Q2FY08 timeframe were awarded using full and open competition. This represented over $12.6 Billion for NAICS 541519. Over 34% of contracts during this period did not report their acquisition strategy. These contracts could include those awarded using full and open competition, small business set-aside, or any manner of restriction. This accounted for over $7.4 Billion in contract dollars. Contracts sole sourced to 8(a) firms held 4% of the market share (over $892 Million). Competitive 8(a) contracts were valued at about $600 Million less, with approximately $292 Million in contract spending for this period.
All other acquisition strategies combined were only 0.42% of the market share. The strategy with the highest reported contract spending was "Buy Indian," with over $20 Million.
WHERE ARE THESE CONTRACTS PERFORMED?
These contracts are being performed across the continental United States and abroad. The 50 states plus Washington, DC have reported spending of $21.1 Billion and contracts for locations outside the United States total over $841 Million. The map below illustrates the distribution of locations within the United States (only). For example, there are 11 states that are shaded bright yellow. This means that these states have reported contract spending between $260 Million and $8.68 Billion.
The state with the highest total of reported contract spending is Virginia, with $8.67 Billion. Virginia is part of the Washington, DC metropolitan, which also includes Washington, DC ($3.03B ranked 2nd) and Maryland ($2.40B ranked 3rd). Their combined contract values comprise 64% of the market share for NAICS 541519 during the period of FY04 through Q2FY08. This geographical area is home to many federal contractors, who are sometimes called "Beltway Bandits" due to their proximity to the headquarters of the Federal Government. Washington, DC, Maryland, and Virginia are the only three that were above the billion-dollar level.
California and Florida rounded out the top five, with $738 Million and $736 Million, respectively.
To learn more about the NAICS 541519 opportunities or other opportunities that epipeline is tracking today; try the following search in the epipeline application:
Find NAICS 541519, "Other Computer Related Services" Federal Researched Opportunities 1. After logging in, select the Federal tab 2. In the NAICS Code(s) field, type 541519. 3. Click Search
Find NAICS 541519, "Other Computer Related Services" Contract History 1. After logging in, select the Contract History tab (within Contract History, you can use Contract History or Contract History Plus tabs)* 2. Type 541519 3. Click Search
*Please note, the information in this report is pulled from epipeline's Contract History Plus feature, which sourced by the Federal Procurement Data System (FPDS). Contract spending for fiscal years 2005 and later have not been as widely reported, especially by the Department of Defense, a previous years. The total values reflect only reported spending, not necessarily actual spending.
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