SEC's $40.6M contract for IT systems development and enhancement awarded to PYRAMID SYSTEMS, INC

Contract Overview

Contract Amount: $40,574,715 ($40.6M)

Contractor: Pyramid Systems, Inc.

Awarding Agency: Securities and Exchange Commission

Start Date: 2014-06-09

End Date: 2021-12-31

Contract Duration: 2,762 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS THE PURPOSE OF THIS REQUEST IS TO ESTABLISH A CONTRACT TO PROVIDE SERVICES REQUIRED BY OCIE TO CONTINUE TO DEVELOP AND ENHANCE TRENDS AND OTHER NATIONAL EXAM PROGRAM (NEP) SYSTEMS. THIS CONTRACT WILL INCLUDE SEVERAL TASK ORDERS: CLIN 001 - PERFORM APPLICATION DEVELOPMENT, SYSTEM INTEGRATION, REPORTS DEVELOPMENT, SUPPORT AND ENHANCEMENT OF THE NEP SYSTEMS CLIN 002 - IMPLEMENT NEW REPORTING FUNCTIONALITY TO INCLUDE BUT NOT LIMITED TO HAVING DASHBOARD CAPABILITIES, A DATAMART FOR REPORTING, ETC. CLIN 003 - DEVELOP A PILOT ORACLE FUSION MIDDLEWARE (OFMW) APPLICATION THAT DEMONSTRATES THE FUNCTIONALITY OF TRENDS USING OFM CLIN 004 - PERFORM BUSINESS PROCESS RE-ENGINEERING SERVICES WITHIN NEP.

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22031

State: Virginia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $40.6 million to PYRAMID SYSTEMS, INC. for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS THE PURPOSE OF THIS REQUEST IS TO ESTABLISH A CONTRACT TO PROVIDE SERVICES REQUIRED BY OCIE TO CONTINUE TO DEVELOP AND ENHANCE TRENDS AND OTHER NATIONAL EXAM PROGRAM (NEP) SYSTEMS. THIS CONTRACT WILL INCLUDE SEVERAL TASK ORDERS: CLIN 001 - PER… Key points: 1. Contract focuses on developing and enhancing national exam program systems, including reporting and business process re-engineering. 2. The contract's duration of over 2700 days suggests a long-term need for these IT services. 3. Awarded under full and open competition, indicating a broad market solicitation. 4. The primary contractor, PYRAMID SYSTEMS, INC., has a track record with federal agencies. 5. The contract value of $40.6 million is spread across multiple task orders for specific IT functions. 6. The services provided are crucial for the SEC's oversight and examination functions.

Value Assessment

Rating: good

The contract value of $40.6 million over approximately 7.5 years averages to about $5.4 million annually. This appears reasonable for comprehensive IT system development and enhancement services for a regulatory agency. Benchmarking against similar large-scale IT system development contracts for federal agencies suggests this pricing is within expected ranges, especially considering the specialized nature of the work and the duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' which implies that the solicitation was broadly advertised and all responsible sources were permitted to submit offers. The fact that it was competed suggests that the SEC sought to leverage market competition to obtain the best value. The number of bidders is not specified, but the competition type indicates an effort to ensure a competitive landscape.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring that the government receives services from the most capable and cost-effective providers.

Public Impact

The Securities and Exchange Commission (SEC) benefits directly through enhanced IT systems for its national exam program. Services delivered include application development, system integration, reporting enhancements, and business process re-engineering. The geographic impact is primarily national, supporting the SEC's nationwide regulatory functions. The contract supports a workforce of IT professionals and analysts involved in system development and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if task orders are not tightly managed.
Reliance on a single prime contractor for critical IT infrastructure.
Ensuring continued innovation and adaptation to evolving technology over the contract's long duration.

Positive Signals

Clear definition of services across multiple task orders.
Awarded through full and open competition, suggesting a competitive process.
Long-term contract provides stability for system development and enhancement.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. The SEC, as a financial regulatory body, requires robust and secure IT systems to manage its examination programs. Spending in this sector often involves complex software development, integration, and maintenance, with contract values varying widely based on project scope and duration. Comparable spending benchmarks would typically be found within other agencies' IT modernization efforts or specialized system development contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, PYRAMID SYSTEMS, INC., is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data, but large federal IT contracts often include subcontracting goals to engage small businesses. The absence of a small business set-aside means opportunities for direct prime contracting were not limited to small entities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Securities and Exchange Commission's contracting officers and program managers. The contract's structure with multiple task orders allows for phased oversight of specific deliverables. Transparency is generally maintained through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed here, the SEC's Office of the Inspector General would likely have oversight authority over potential fraud, waste, or abuse related to this contract.

Related Government Programs

SEC National Exam Program (NEP) Systems
IT System Development and Modernization
Application Development Services
Computer Systems Design Services
Federal IT Procurement

Risk Flags

Long contract duration may lead to technological obsolescence if not managed proactively.
Potential for cost overruns if scope is not tightly controlled.
Dependence on contractor performance for critical system functionality.

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $40.6 million to PYRAMID SYSTEMS, INC.. IGF::OT::IGF FOR OTHER FUNCTIONS THE PURPOSE OF THIS REQUEST IS TO ESTABLISH A CONTRACT TO PROVIDE SERVICES REQUIRED BY OCIE TO CONTINUE TO DEVELOP AND ENHANCE TRENDS AND OTHER NATIONAL EXAM PROGRAM (NEP) SYSTEMS. THIS CONTRACT WILL INCLUDE SEVERAL TASK ORDERS: CLIN 001 - PERFORM APPLICATION DEVELOPMENT, SYSTEM INTEGRATION, REPORTS DEVELOPMENT, SUPPORT AND ENHANCEMENT OF THE NEP SYSTEMS CLIN 002 - IMPLEMENT NEW REPORTING FUNCTIONALITY TO INCLUDE BUT NOT LIMITED TO HAVING DASHBOARD CAPABILITI

Who is the contractor on this award?

The obligated recipient is PYRAMID SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $40.6 million.

What is the period of performance?

Start: 2014-06-09. End: 2021-12-31.

What is the track record of PYRAMID SYSTEMS, INC. with federal contracts, particularly in IT system development?

PYRAMID SYSTEMS, INC. has a history of performing federal IT contracts. While specific details on all past performance are not provided in this data snippet, their selection for this significant contract with the SEC suggests they have met the agency's requirements and demonstrated capability in areas such as application development, system integration, and enhancement. Federal procurement databases would contain more granular information on their past performance, including contract values, agencies served, and performance ratings, which would be crucial for a comprehensive assessment of their track record.

How does the value of this contract compare to similar IT system development contracts for regulatory agencies?

The $40.6 million contract value over approximately 7.5 years, averaging around $5.4 million annually, appears to be within a reasonable range for comprehensive IT system development and enhancement services for a federal regulatory agency like the SEC. Large-scale IT modernization and system development projects for agencies such as the IRS, GSA, or other financial regulators can often range from tens to hundreds of millions of dollars over their lifecycle. The specific scope, complexity, and duration of the SEC's NEP systems development likely justify this investment compared to other similar federal IT endeavors.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks include potential cost overruns if project scopes are not well-defined or managed, schedule delays due to technical challenges or changing requirements, and performance issues if the contractor fails to deliver quality services. Mitigation strategies likely involve robust contract management by the SEC, including detailed task order specifications, regular performance reviews, and clear acceptance criteria. The use of multiple task orders can also help manage risk by breaking down the project into smaller, more manageable components. The long duration also presents a risk of technological obsolescence, which would need to be managed through agile development practices and planned system updates.

How effective are the IT systems developed under this contract likely to be in supporting the SEC's examination functions?

The effectiveness of the systems will depend heavily on the execution of the contract and the alignment of the developed functionalities with the SEC's evolving needs. The contract explicitly aims to 'develop and enhance trends and other National Exam Program (NEP) systems,' including 'new reporting functionality' and 'dashboard capabilities.' If these enhancements successfully improve data analysis, reporting efficiency, and the overall ability of examiners to identify risks and compliance issues, then the systems will be highly effective. Continuous feedback loops between the SEC program office and PYRAMID SYSTEMS, INC. will be critical to ensure the systems remain relevant and supportive of the SEC's mission.

What are the historical spending patterns for IT services related to the SEC's National Exam Program?

Historical spending data for the SEC's National Exam Program IT systems would provide context for this $40.6 million contract. Without specific historical figures, it's difficult to definitively assess if this award represents an increase, decrease, or stable level of investment. However, federal agencies, including the SEC, have increasingly relied on technology to manage complex regulatory environments. It is plausible that spending on IT systems for examination programs has trended upwards over time due to increasing data volumes, evolving threats, and the need for more sophisticated analytical tools. This contract likely represents a significant, multi-year investment in modernizing or maintaining these critical systems.

What is the significance of the 'Computer Systems Design Services' NAICS code (541512) in the context of this contract?

The North American Industry Classification System (NAICS) code 541512, 'Computer Systems Design Services,' signifies that the primary purpose of this contract is to provide services related to the design, development, integration, and modification of computer systems. This includes custom software development, systems integration, and IT consulting. For the SEC's National Exam Program, this code indicates that the contractor is expected to deliver tailored IT solutions that meet the agency's specific operational needs, rather than simply providing off-the-shelf software or hardware. It encompasses a broad range of activities essential for building and maintaining complex IT infrastructures.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SECHQ114R0011

Offers Received: 4

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 9302 LEE HWY STE 1200, FAIRFAX, VA, 22031

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $40,574,715

Exercised Options: $40,574,715

Current Obligation: $40,574,715

Actual Outlays: $14,769,741

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SECHQ113D0045

IDV Type: IDC

Timeline