State Department's $1M IT License Renewal with Four LLC Shows Moderate Value, Full Competition

Contract Overview

Contract Amount: $1,045,793 ($1.0M)

Contractor: Four LLC

Awarding Agency: Department of State

Start Date: 2024-04-09

End Date: 2027-04-08

Contract Duration: 1,094 days

Daily Burn Rate: $956/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PALO ALTO LICENSE RENEWALS

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $1.0 million to FOUR LLC for work described as: PALO ALTO LICENSE RENEWALS Key points: 1. Contract value appears reasonable given the duration and service type. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. No immediate risk indicators are apparent from the contract data. 4. This contract supports essential IT infrastructure for the Department of State. 5. The IT services sector is characterized by rapid technological change and evolving needs. 6. Spending on IT services is a significant component of federal agency budgets.

Value Assessment

Rating: good

The contract's total value of approximately $1.05 million over three years for IT license renewals suggests a moderate annual spend of around $350,000. Benchmarking against similar IT service contracts is challenging without specific details on the licenses and services provided. However, the firm-fixed-price structure indicates predictable costs. The absence of extensive modifications or overruns in the provided data suggests effective cost management for this particular award.

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, indicating that multiple vendors were likely solicited and had the opportunity to bid. The fact that it was competed suggests that the agency sought the best value and pricing available in the market. The specific details of the bidding process, such as the number of proposals received, are not provided, but the method implies a healthy level of competition.

Taxpayer Impact: The use of full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring that government funds are used efficiently. It allows for a wider pool of potential contractors, increasing the likelihood of finding cost-effective solutions.

Public Impact

Federal employees within the Department of State will benefit from continued access to necessary software licenses and IT services. Essential IT infrastructure and operational capabilities for the agency will be maintained. The contract's impact is primarily national, supporting the operational needs of a federal agency. Workforce implications are likely internal to the contractor, Four LLC, and potentially IT support staff within the Department of State.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific proprietary licenses are involved.
Reliance on a single vendor for critical IT renewals could pose a risk if the vendor experiences financial or operational difficulties.

Positive Signals

The contract was awarded through full and open competition, indicating a competitive process.
The firm-fixed-price contract type provides cost certainty for the government.
The contract duration is clearly defined, allowing for future planning and re-competition.

Sector Analysis

The Information Technology (IT) services sector is a vast and dynamic market, encompassing a wide range of services from software development and maintenance to cloud computing and cybersecurity. Federal spending in this sector is substantial, driven by the increasing digitization of government operations and the need for modern, secure IT infrastructure. This contract for license renewals fits within the broader category of IT support services, which are crucial for maintaining the operational continuity of federal agencies. Comparable spending benchmarks for IT license renewals vary widely based on the specific software and scale of the agency.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The contractor, Four LLC, is not identified by size. Therefore, the direct impact on the small business ecosystem appears minimal based on the available data, unless Four LLC itself is a small business and utilizes other small businesses for support.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and program managers within the Department of State. The firm-fixed-price nature of the contract simplifies oversight by focusing on delivery and adherence to terms rather than cost justification. Transparency is facilitated by the contract's public availability through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State IT Modernization Efforts
Federal Software License Management
IT Services for Diplomatic Operations
General Services Administration (GSA) Schedule Contracts

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical IT renewals

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $1.0 million to FOUR LLC. PALO ALTO LICENSE RENEWALS

Who is the contractor on this award?

The obligated recipient is FOUR LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $1.0 million.

What is the period of performance?

Start: 2024-04-09. End: 2027-04-08.

What specific software licenses are being renewed under this contract, and what is their criticality to the Department of State's operations?

The provided data does not specify the exact software licenses covered by this contract. However, given the contractor's designation under NAICS code 541519 (Other Computer Related Services) and the agency being the Department of State, these licenses likely pertain to essential operating systems, productivity software, or specialized applications critical for diplomatic communications, data management, and internal operations. The criticality can be inferred from the contract's duration and value, suggesting ongoing, necessary support rather than a one-time or non-essential purchase. Further investigation into the contract's statement of work would be required for precise details.

How does the per-unit cost of these licenses compare to commercial off-the-shelf (COTS) pricing or other federal agency agreements?

Without knowing the specific licenses, a direct per-unit cost comparison is not feasible. However, the contract's firm-fixed-price structure and full and open competition suggest that the pricing was determined through a competitive process aimed at achieving value. Federal agencies often negotiate volume discounts or leverage government-wide purchasing agreements, which can lead to lower per-unit costs than commercial purchases. To benchmark effectively, one would need to identify the specific software vendor and compare the negotiated rates against GSA schedules, other agency task orders for the same software, or published COTS pricing, factoring in any enterprise-level agreements or support included.

What is the track record of Four LLC in delivering IT services to the federal government, particularly the Department of State?

The provided data identifies Four LLC as the contractor but does not offer details on their past performance or track record. To assess their history, one would typically consult federal procurement databases like SAM.gov for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any publicly available information about the company's experience. A positive track record with the Department of State or similar agencies would indicate reliability and competence, while a history of issues might raise concerns about future performance and value delivery.

What are the potential risks associated with relying on Four LLC for these IT license renewals over the next three years?

Potential risks include vendor viability (financial stability or operational disruptions affecting Four LLC), the possibility of price increases upon contract renewal if competition is less robust in the future, and the risk of obsolescence if the software licenses are not updated or if the Department of State's needs evolve beyond the scope of the current agreement. Dependence on a single vendor for critical licenses also presents a risk if the vendor's support or product development falters. However, the firm-fixed-price nature mitigates cost overrun risks, and the initial full competition suggests a degree of market validation.

How does this contract's spending compare to historical federal IT spending on similar services or with the Department of State?

This contract represents a $1.05 million expenditure over three years for IT license renewals. To compare this historically, one would need to analyze the Department of State's IT budget trends, specifically allocations for software licensing and maintenance, over previous fiscal years. Additionally, comparing this award to other federal agencies' spending on comparable IT services, adjusted for agency size and mission, would provide context. Without broader data on the Department of State's IT procurement history or sector-wide benchmarks, it's difficult to definitively state whether this spending level is high, low, or average.

Industry Classification

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

Product/Service Code: IT AND TELECOM - DATA CENTER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2303 DULLES STATION BLVD STE 105, HERNDON, VA, 20171

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,591,586

Exercised Options: $1,591,586

Current Obligation: $1,045,793

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC73B

IDV Type: GWAC

Timeline