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NAICS NewsletterMay 11, 2010

NAICS 518210

Data Processing, Hosting, and
Related Services

Government Contract and Procurement Analysis Report

Report Summary

This report, offered by epipeline, contains a brief analysis of the Federal government's procurement practices with regards to purchasing the services of Data Processing, Hosting, and Related Services.


You will find information on the top federal government agencies that purchase these services, as well as their procurement strategy (i.e. full and open competition, set-asides and more). Finally, there is a review of the top companies that are awarded federal government contracts for Data Processing, Hosting, and Related Services.


To get a more comprehensive analysis and learn more about how epipeline can help you identify current and future bid opportunities, register for a live Demo.

This report takes an in-depth look at the 'Data Processing, Hosting, and Related Services' industry, NAICS 518210. 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/agencies buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY05 through FY09 for NAICS 518210

WHAT IS NAICS 518210?

NAICS 518210 is the primary code for establishments primarily engaged in providing infrastructure for hosting or data processing services.

Typical services include providing specialized hosting activities, such as web hosting, streaming services or application hosting; providing application service provisioning; or providing general time-share mainframe facilities to clients. Data processing contractors provide complete processing and reporting from data supplied by clients. They may also provide automated data processing and data entry services.

The description of NAICS 518210 is further broken out to include these additional specific topics:

  • Application hosting
  • Application service providers (ASPs)
  • ASPs (Application Service Providers)
  • Automated data processing services
  • Computer data storage services
  • Computer input preparation services
  • Computer time leasing
  • Computer time rental
  • Computer time sharing services
  • Data capture imaging services
  • Data entry services
  • Data processing computer services
  • Data processing services (except payroll services, financial transaction processing services)
  • Disk and diskette conversion services
  • Disk and diskette recertification services
  • Electronic data processing services
  • Media streaming services
  • Microfiche recording and imaging services
  • Microfilm recording and imaging services
  • Optical scanning services
  • Scanning services, optical
  • Video and audio streaming services
  • Web hosting

The size standard associated with NAICS 518210 is $25 Million (effective August 22, 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 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.

Total reported spending under NAICS 518210 for the period of Fiscal Year 2005 (FY05) through the Fiscal Year 2009 (FY09) was over $5.7 Billion. FY09 reported spending of $1.4 Billion for services under NAICS 518210. The chart below illustrates the reported** spending by year for FY05 through FY09.

Reported Contract Spending for NAICS 518210 FY05 through FY09

Source: epipeline's Contract History Plus*

** 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 current and historic contract spending.

WHO ISSUES THE CONTRACTS?

The United States Army was the largest buyer for these services for the last five fiscal years (FY05 through FY09), with over $912 million in contract spending, comprising over 15% of the market share for NAICS 518210. The Federal Technology Service took the second spot, with over $470 million in reported spending for this period. The United States Navy and Air Force took third and fourth places, respectively, making up a combined market share of over 27% for all Defense spending in NAICS 518210.

The Department of Education and the Office of Policy, Budget and Administration each spent over $300 million during this time period with the rest of the top ten reporting spending over $800 million for NAICS 518210.

Top 10 Federal Agencies by % of Total Market FY05 through FY09 for NAICS 518210

Source: epipeline's Contract History Plus*

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 9,046 companies registered under NAICS 518210 (source: active registrants, www.ccr.gov as of 04/28/2010). Of this number, 8,129 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category):

  • 966 SBA Certified 8(a) contractors;
  • 279 SBA Certified HUBZone contractors; and
  • 1,064 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 than the resulting totals above represent.

The two charts below identify the top 10 Companies, by market share, for the period of FY05 through FY09. 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 holds the top spot on the unrestricted competition list, with $579 million in contract dollars for FY05-FY09 and over 10% of the market share. Apptis Technology Solutions, LLC, BAE Systems Information Technology, Perot Systems Government Services Inc, and Cherryroad GT Inc round out the top five spots with a combined $1.2 billion in contract dollars. Along with all the companies in the top ten, there are fourteen additional firms that are/were holding contracts with at least $50 million in contract dollars, with another eleven firms having $25 million or more.

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.

Top 10 NAICS 518210 Contractors by % of Total Market for FY05 through FY09 - All Acquisition Strategies

Source: epipeline's Contract History Plus*

The combined contract spending for contracts awarded under "restricted competition," as outlined above, totaled over $777 million for FY05 through FY09. Indyne Inc holds the top spot, with reported spending of $230 million for this period, or 29.63% of market share (they are also listed in the sixth spot on the previous chart). Science and Technology Corporation and Buccaneer Computer Systems Service Inc both reported spending above $50 million for this period. The remaining firms in the top ten, as well as another 69 companies, exceeded $1 million in reported spending for NAICS 518210.

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.

Top 10 NAICS 518210 Contractors by % of Total Market for FY05 through FY09 - Restricted Competition

Source: epipeline's Contract History Plus*

HOW ARE THESE CONTRACTS PROCURED?

Over 71% of contract spending reported for the FY05 through FY09 timeframe under NAICS 518210 used full and open (unrestricted aka "N/A") competition. This equated to over $4 billion. Contracts that did not indicate their acquisition strategy (which means they could represent any acquisition strategy) reported contract spending of over $900 million. Contracts that were small business set-aside reported spending over $477 million. The combined value of contracts awarded to 8a firms (sole source and competitive) was over $278 million; this represents nearly 5% of the market.

Acquisition Breakout under NAICS 518210 for FY05 through FY09

Source: epipeline's Contract History Plus*

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 for the FY05 through FY09 period of $5.3 billion and contracts for locations outside the United States (or unlisted) totaled approximately $10.4 million.

The state with the highest total of reported contract spending is Virginia, with $1.6 billion. DC ($962 million) and Maryland ($770 million) took the second and third spots. Together the top three states represent almost 60% of market under NAICS 518210. Besides those in the top ten, another nineteen states reported at least $10 million for NAICS 518210 during this time period.

Contract Place of Performance under NAICS 518210 for FY05 through January 2009

Source: epipeline's Contract History Plus*

Identify, Qualify & Win More Government Contracts for Data Processing

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