October 17, 2006


epipeline's Eye on Custom Computer Programming Services, NAICS 541511

 

As the Business Development Manager responsible for creating the business plan for your company, it can be very challenging to gain a perspective of opportunities over the several years; and from that, determine the specific opportunities to pursue.

 

This week we are going to look at the opportunities for Custom Computer Programming Services (NAICS 541511). To understand this NAICS code better, epipeline has asked the following questions:

 

         Who issues the contracts?

         Who wins the contracts?

 

NAICS 541511 is the primary code when projects require writing, modifying, testing, and supporting software to meet the needs of a particular customer.

 

It was previously represented by Standard Industrial Classification (SIC) code: 7371. SIC 7371 covered the following topics:

         Applications software programming services, custom computer

         Computer program or software development, custom

         Computer programming services, custom

         Computer software analysis and design services, custom

         Computer software programming services, custom

         Computer software support services, custom

         Programming services, custom computer

         Software analysis and design services, custom computer

         Software programming services, custom computer

         WEB (i.e., internet) page design services, custom

 

The size standard associated with NAICS 541511 is $23 Million, which means that a company, including its affiliates, would be considered a "small business" if their average annual gross revenue does not exceed $23 Million for the past three years.

 

Total reported spending under NAICS 541511 in FY03 was over $3.9 Billion. FY04 saw an increase, to just over $4.1 Billion. (Source: epipeline's FPDS information, covering fiscal years 2003 and 2004).

  

Who issues the contracts?

 

The Department of Defense (DoD) was the largest buyer for these services in FY04, with over $890 Million in contract spending, comprising over 21% of the market share. The Army was a relatively close second, with over $860 Million and over 20% of the market share. Within the top ten, the Department of Defense and its components (Army, Air Force, Navy, and Defense Logistics Agency (DLA)), combined contract dollars topped $2.6 Billion, which equated to almost two-thirds of all spending under NAICS 541511 in FY04. GSA's Federal Technology Service (FTS), which held the top position in FY03 with over $867 Million, dropped to the fourth position in FY04, with approximately $461 Million.

 

Source: epipeline's FPDS information, FY04

 

Who wins the contracts?

 

According to the Central Contractor Registry (CCR), there are 20,194 companies registered under NAICS 541511 (source: active registrants, www.ccr.gov as of 4/13/06).  18,168 of those are small businesses. The two charts below identify the top 10 Companies, by market share, for FY04. 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 following acquisition strategies:
 

         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
 

SAIC holds the top spot on the unrestricted competition list, with almost $280 Million in contract dollars for FY04 and 6.72% of the market share. CSC, TRW and TASC are not too far behind, all with over $150 Million. Northrop Grumman holds two spots in the top ten, with their Northrop Grumman Defense Mission and Northrop Grumman Information Technology divisions. With their contract values combined, they would have jumped to the second spot, with a combined value of over $186 Million. FY04 listed over 400 companies holding contracts with at least $1 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 is not reflected in the chart below.

 

Source: epipeline's FPDS information, FY04

 

The combined contract spending for contracts awarded under "restricted competition" totaled over $266 Million in FY04. Bart & Associates, Inc. tops this list with 8.30% of the restricted contract spending in FY04, which equates to over $22 Million. The next two firms, QSS Group, Inc., and Computech, Inc., also have over $10 Million in contract dollars for FY04, with contracts valued at over $18 Million and $12 Million, respectively. There were over 50 firms hold contracts with at least $1 Million or more in FY04. PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which is not reflected in the chart below.

 

Source: epipeline's FPDS information, FY04

 

Acquisition strategy was reported for only about half the contracts listed under this code, with over 48% of the market share using an unknown competition strategy. These contracts could include all types of competition, from full and open, small business set-aside, HUBZone set-aside, etc. Over $1.8 Billion of contract spending under NAICS 541511 in FY04 were reported as using full and open competition. The breakdown of acquisition strategy for FY04 is illustrated in the pie chart below. Contracts that were set-aside for small businesses comprised over $92 Million of FY04 contract spending. Another $84 Million was set-aside 8(a) firms, and $83 Million sole sourced to 8(a) firms. Competitive procurements for Small Disadvantaged Businesses (SDB), Historically Black Colleges and Universities (HCBU) and Minority Institutions (MI), sole-sourced HUBZone procurements, and those Reserved for Small Businesses ($2,501 - $100K) all had at least $1 Million in contract dollars.

 

 

Source: epipeline's FPDS information, FY04

 

epipeline's application contains a number of opportunities that are identified by this NAICS code. To learn more about the NAICS 541511 opportunities or other opportunities that epipeline is tracking today; try the following search in the epipeline application:

 

Find NAICS 541511, "Custom Computer Programming Services" Opportunities

 

1. After logging in, select Researched Opportunities

2. NAICS Code(s) - Type 541511 (or, try using the SIC field, with 7371);

3. Click Search

 

Find NAICS 541511, "Custom Computer Programming Services" Opportunities

1. After logging in, select FPDS Contract History

2. Type 541511 in the NAICS field

3. Click Search

 

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