USDA renews ServiceNow licenses for $27M, awarding to Advanced Computer Concepts, Inc

Contract Overview

Contract Amount: $26,959,857 ($27.0M)

Contractor: Advanced Computer Concepts, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2023-01-27

End Date: 2026-01-29

Contract Duration: 1,098 days

Daily Burn Rate: $24.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RENEWAL OF SERVICENOW LICENSES-FPAC

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Agriculture obligated $27.0 million to ADVANCED COMPUTER CONCEPTS, INC. for work described as: RENEWAL OF SERVICENOW LICENSES-FPAC Key points: 1. Contract value of $26.96 million over approximately three years suggests a significant investment in IT infrastructure. 2. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 3. Awarded under Full and Open Competition after Exclusion of Sources, indicating a competitive process with specific justifications. 4. The North American Industry Classification System (NAICS) code 541519 (Other Computer Related Services) places this within a broad IT services category. 5. The duration of 1098 days (nearly 3 years) provides a stable period for service delivery. 6. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: good

The contract value of $26.96 million for ServiceNow license renewal over nearly three years appears reasonable for enterprise-level software licensing and support. Benchmarking against similar large-scale government IT renewals would provide more precise value assessment. The Firm Fixed Price contract type is generally favorable for the government, as it caps costs. However, without detailed service level agreements and usage metrics, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition after Exclusion of Sources.' This designation implies that while the competition was open, there were specific reasons for excluding certain sources, possibly related to existing infrastructure, security requirements, or prior performance. The presence of 4 bids suggests a degree of competition, but the 'exclusion of sources' aspect warrants further investigation into the specific criteria that may have limited the bidder pool.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to offer their best pricing and terms. The fact that four bids were received indicates that the government likely secured a competitive price, preventing a sole-source situation which could lead to inflated costs.

Public Impact

Federal employees within the Department of Agriculture will benefit from continued access to ServiceNow's IT service management capabilities. The services delivered include the renewal of licenses for the ServiceNow platform, likely supporting various IT operations, help desk functions, and workflow automation. The geographic impact is primarily within the Department of Agriculture's operations, which are nationwide. Workforce implications include ensuring IT support staff have the necessary tools to perform their duties efficiently.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with enterprise software renewals.
Reliance on a single vendor's platform can create dependencies.
The 'Exclusion of Sources' clause requires scrutiny to ensure it did not unduly limit competition.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Awarded through a competitive process, suggesting potential for good value.
Renewal of essential IT services ensures continuity of operations for the agency.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software licensing and support for enterprise platforms like ServiceNow. The market for IT service management (ITSM) software and related services is substantial within the federal government, with agencies investing heavily in platforms that streamline IT operations, automate workflows, and improve service delivery. Comparable spending benchmarks would involve looking at other large federal ITSM contract renewals or procurements for similar platforms across agencies like GSA, DOD, or HHS.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (sb: false) and the primary contractor, Advanced Computer Concepts, Inc., is not explicitly identified as a small business in this context. Therefore, the direct impact on small business set-asides is minimal. However, the potential for subcontracting opportunities with Advanced Computer Concepts, Inc. exists, which could indirectly benefit small businesses if they possess specialized skills or services required for the implementation or support of the ServiceNow platform.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's contracting officers and program managers. Accountability measures are embedded in the Firm Fixed Price contract terms and Service Level Agreements (SLAs), which define performance expectations. Transparency is generally maintained through contract databases like FPDS, where basic award information is publicly available. The Inspector General's office within the USDA may conduct audits or investigations if specific concerns regarding performance, cost, or compliance arise.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Department of Defense (DoD) Enterprise Software Agreements
National Institutes of Health (NIH) IT Support Contracts
Department of Homeland Security (DHS) Cloud Services Contracts

Risk Flags

Potential for limited competition due to 'Exclusion of Sources' clause.
Risk of vendor lock-in with enterprise software renewals.
Need for detailed performance metrics to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $27.0 million to ADVANCED COMPUTER CONCEPTS, INC.. RENEWAL OF SERVICENOW LICENSES-FPAC

Who is the contractor on this award?

The obligated recipient is ADVANCED COMPUTER CONCEPTS, INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Under Secretary for Farm and Foreign Agricultural Services).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2023-01-27. End: 2026-01-29.

What is the track record of Advanced Computer Concepts, Inc. in fulfilling federal contracts, particularly for IT services and software renewals?

A review of federal procurement data (e.g., FPDS) would be necessary to assess Advanced Computer Concepts, Inc.'s track record. Key metrics to examine would include the number of past awards, contract values, performance ratings (if available), and any history of contract disputes or terminations. For this specific contract, understanding their experience with ServiceNow implementations and renewals, especially within large federal agencies, would be crucial. A history of successful, on-time, and within-budget delivery of similar services would indicate a lower performance risk. Conversely, any past issues could signal potential challenges in meeting the current contract's requirements.

How does the $26.96 million cost compare to similar ServiceNow license renewals or ITSM procurements by other federal agencies?

Benchmarking this $26.96 million renewal against similar federal contracts requires access to detailed pricing data for comparable ServiceNow deployments or other enterprise ITSM solutions. Factors influencing cost include the number of users, modules licensed (e.g., ITOM, HRSD, CSM), support levels, and contract duration. Agencies like the Department of Veterans Affairs (VA) or the General Services Administration (GSA) often procure similar enterprise software. A comparative analysis would involve identifying contracts with similar scope, user counts, and service levels, and then normalizing the pricing to understand if the USDA's renewal represents a fair market value or if there's an opportunity for cost savings through negotiation or exploring alternative solutions.

What specific risks are associated with renewing enterprise software licenses like ServiceNow, and how are they mitigated in this contract?

Key risks in renewing enterprise software licenses include vendor lock-in, escalating costs over time, potential for underutilization of licensed features, and the technical challenges of integration and upgrades. This contract, being a Firm Fixed Price (FFP) award, mitigates cost overrun risks for the government. The 'Full and Open Competition after Exclusion of Sources' suggests an attempt to ensure competitive pricing, though the exclusion aspect needs review. Mitigation of underutilization risk depends on the USDA's internal IT asset management and usage monitoring. The contract's duration (nearly 3 years) provides stability but also extends the period of dependency. Effective mitigation relies on strong contract management, regular performance reviews, and proactive planning for future software needs.

What is the expected program effectiveness or return on investment (ROI) for this ServiceNow license renewal for the Department of Agriculture?

The expected program effectiveness hinges on how well the ServiceNow platform supports the USDA's mission-critical IT service management, workflow automation, and operational efficiency goals. A successful renewal should enable continued or improved service desk operations, faster incident resolution, streamlined IT processes, and better resource allocation. Quantifying ROI can be challenging but might involve measuring reductions in IT support costs, decreased downtime, improved employee productivity through automated workflows, and enhanced compliance. The effectiveness is directly tied to the agency's adoption and utilization of the platform's capabilities beyond basic ticketing.

How has the Department of Agriculture's spending on ServiceNow or similar ITSM solutions evolved over the past several years?

Analyzing historical spending patterns for ServiceNow or comparable ITSM solutions within the USDA would provide context for this $26.96 million renewal. This involves examining prior contract awards for ServiceNow licenses, maintenance, and professional services over the last 3-5 years. Understanding trends in spending—whether increasing, decreasing, or stable—can reveal the agency's strategic commitment to the platform, potential cost-saving initiatives, or shifts in IT strategy. Significant year-over-year increases might warrant closer scrutiny of justification and market pricing, while consistent spending could indicate a stable, ongoing need.

What specific IT services or modules are covered under this ServiceNow renewal, and how do they align with USDA's IT modernization goals?

The provided data only specifies 'RENEWAL OF SERVICENOW LICENSES-FPAC' and identifies the NAICS code as 'Other Computer Related Services.' To assess alignment with USDA's IT modernization goals, a detailed breakdown of the specific ServiceNow modules (e.g., IT Service Management, IT Operations Management, IT Business Management, Customer Service Management, HR Service Delivery) and associated license types (e.g., user licenses, platform capacity) included in this $26.96 million renewal would be necessary. Understanding which functionalities are being procured or renewed allows for an evaluation of their contribution to modernization objectives such as cloud migration, process automation, data analytics, and enhanced user experience.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12FPC223Q0015

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7927 JONES BRANCH DR STE 600N, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $47,315,229

Exercised Options: $26,959,857

Current Obligation: $26,959,857

Actual Outlays: $26,959,857

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD60B

IDV Type: GWAC

Timeline