Treasury's $7M IT Services Contract with Priority Fulfillment Services Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $6,987,693 ($7.0M)
Contractor: Priority Fulfillment Services, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2019-11-18
End Date: 2025-12-30
Contract Duration: 2,234 days
Daily Burn Rate: $3.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: OMS II SERVICES FUNDING (IT SYSTEMS)
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20220
Plain-Language Summary
Department of the Treasury obligated $7.0 million to PRIORITY FULFILLMENT SERVICES, INC. for work described as: OMS II SERVICES FUNDING (IT SYSTEMS) Key points: 1. The contract's value of $6.99M for IT systems support raises questions about cost-effectiveness. 2. While awarded under full and open competition, the specific impact on price discovery needs further analysis. 3. The duration of the contract (ending Dec 2025) and its fixed-price nature present potential risks if scope changes. 4. The sector is IT, specifically Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services.
Value Assessment
Rating: fair
The contract value of $6.99M for IT systems support appears moderate for the services described. Benchmarking against similar contracts for computing infrastructure and web hosting is necessary to determine if the pricing is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically promotes competitive pricing. However, the specific details of the bidding process and the number of bids received are not provided, limiting a full assessment of price discovery effectiveness.
Taxpayer Impact: The use of full and open competition suggests an effort to secure fair pricing for taxpayers. However, without detailed cost analysis, the ultimate taxpayer benefit remains to be fully determined.
Public Impact
Taxpayers may be impacted by the cost of IT infrastructure and hosting services for the U.S. Mint. The contract supports essential IT functions, ensuring the operational continuity of critical government systems. The duration of the contract could mean long-term reliance on a single vendor for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown
- Potential for vendor lock-in
- Limited insight into specific performance metrics
Positive Signals
- Awarded through full and open competition
- Firm fixed-price contract type
- Supports critical government IT infrastructure
Sector Analysis
This contract falls within the IT sector, specifically focusing on computing infrastructure, data processing, and web hosting. Spending in this area is crucial for government operations, but often subject to rapid technological change and competitive pricing pressures.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. Further investigation would be needed to determine the extent of small business participation in this contract's performance.
Oversight & Accountability
Oversight of this contract would involve monitoring performance against the delivery order requirements and ensuring compliance with the firm fixed-price terms. The U.S. Mint's contracting office is responsible for this oversight.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Potential for overpayment due to fixed-price nature
- Risk of service quality degradation if vendor faces cost pressures
- Limited visibility into specific service performance metrics
- Technology obsolescence risk over contract duration
Tags
computing-infrastructure-providers-data-, department-of-the-treasury, dc, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $7.0 million to PRIORITY FULFILLMENT SERVICES, INC.. OMS II SERVICES FUNDING (IT SYSTEMS)
Who is the contractor on this award?
The obligated recipient is PRIORITY FULFILLMENT SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of the Treasury (United States Mint).
What is the total obligated amount?
The obligated amount is $7.0 million.
What is the period of performance?
Start: 2019-11-18. End: 2025-12-30.
What specific IT services are included under this delivery order, and how do they align with the stated NAICS code?
The NAICS code 518210 covers data processing, hosting, and related services. The delivery order likely encompasses services such as server hosting, cloud computing, data storage, network management, and potentially web development or maintenance, all crucial for the U.S. Mint's IT infrastructure.
How did the 'full and open competition' process ensure the best possible price for these IT services?
Full and open competition theoretically allows any interested vendor to bid, fostering a competitive environment that drives down prices. However, the effectiveness depends on the number of bids received, the clarity of the solicitation, and the evaluation criteria used. Without these details, it's hard to definitively say if the best price was achieved.
What are the potential risks associated with a firm fixed-price contract for IT services that extends to late 2025?
A firm fixed-price contract can lead to the government overpaying if costs decrease or if the vendor's efficiency increases significantly. Conversely, if unforeseen technical challenges or scope creep occur, the vendor might struggle to deliver within the fixed price, potentially impacting service quality or leading to disputes. The long duration also increases the risk of technology obsolescence.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 505 MILLENIUM DR, ALLEN, TX, 75013
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $6,987,693
Exercised Options: $6,987,693
Current Obligation: $6,987,693
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TMHQ13C0073
IDV Type: IDC
Timeline
Start Date: 2019-11-18
Current End Date: 2025-12-30
Potential End Date: 2025-12-30 00:00:00
Last Modified: 2026-02-10
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